Tag Archives: Exports

Ecuadorian Banana Industry Poised To Double China Exports as FTA Nears Ratification

Reversing the decline observed during the COVID-19 years.

The free trade agreement between China and Ecuador, signed in May of last year with the aim of eliminating import tariffs for Ecuadorian fruit, particularly bananas, is still awaiting national approval in Ecuador. Following a political crisis that stalled the ratification of the agreement, the Constitutional Court eventually validated the document, and it is now being debated in the National Assembly. Disagreement among the assembly members resulted in a temporary suspension of the debate on Jan. 11, and the process has not yet been resumed as of the time of writing.

Meanwhile, the Ecuadorian banana industry remains optimistic about the approval of the FTA and is placing its expectations on the deadline of June 2024 set for ratification of the agreement.

Jose Antonio Hidalgo, executive director of the Ecuadorian Banana Exporters Association, has claimed that the agreement will enable the sector to double its shipments to China and reverse the decline observed during the COVID-19 years. According to Hidalgo, Ecuador exported $156.62 million worth of bananas to China in 2020, a 29% decrease from 2019. He added that the industry had been unable to grow its presence in the Chinese market owing to the high tariffs that remain in place.

At the same time, Ecuadorian banana exports to China appear to be picking up. Statistics released by Ecuador’s Banana Marketing and Export Association for the first 11 months of last year show an increase in shipments to the Chinese market. The reported growth in export volume stands at a remarkable 45% compared with the same period of 2022. From January to November 2023, China received nearly 256,510 metric tons of Ecuadorian bananas, making it Ecuador’s largest market in East Asia, followed by Japan with 87,247 metric tons. In total, Ecuador exported 5.9 million metric tons of bananas over the data period.

China traditionally relies on the Philippines, Vietnam and Cambodia as its major banana suppliers. One of the main advantages of all three is their geographical proximity to China, which results in a relatively short transit time. In terms of production, however, these countries have recently encountered a number of difficulties. The Philippines is struggling to deal with outbreaks of the fungal disease Fusarium wilt, which have severely impacted yields and exports. Meanwhile, Cambodia is suffering from the effects of climate change, including water shortages at banana plantations and pest problems. Vietnam’s banana exports to China were on the rise in 2023, but in July the sector received a warning from Chinese regulators for failing to comply with phytosanitary standards, which it had to address.

Source: ProduceReport.com

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BTOM Bombshell: Government’s Risk Reclassification ‘Severe Blow to Industry,’ Warns Jenney

The undisclosed costs linked to these measures are feared to threaten the survival of many small and medium-sized enterprises.

Nigel Jenney, FPC’s Chief Executive, voiced his alarm, asserting, “This verdict delivers a severe blow to the industry and will have widespread ramifications.”

His words underscore the profound impact of this unexpected policy shift, set to be implemented on 31 October 2024.
 

The industry is now bracing for the fallout of this decision.

The government’s proposed solutions, including the establishment of a Border Control Point (BCP) at Sevington and the introduction of additional Common User Charge fees, are seen as inadequate for the specialised needs of the perishable sector, known for its just-in-time operations.
 
The undisclosed costs linked to these measures are feared to threaten the survival of many small and medium-sized enterprises (SMEs).
 

The opacity surrounding the reasons for the reclassification of these products has heightened the urgency for the industry to receive timely information and to seek avenues for improvement.

Given that 65% of all EU imports depend on groupage, the implications of this decision are expected to be extensive. Vehicles transporting consignments that do not require inspection could still face significant delays at BCPs.
 
“For years, we have proposed viable solutions that are only now receiving government consideration,” Jenney lamented. “It is imperative to establish cost-effective inspection solutions for SMEs, groupage consignments, and fast-track approval for responsible companies to conduct their own official inspections.”
 

The industry is calling for the simultaneous implementation of industry-managed control points with approval for official inspections – Authorised Operator Status (AOS) – on the designated “go live” date. This strategy is vital for simplifying and reducing the complexity and cost of trade with the UK, which is key to averting food inflation and the risk of empty shelves.

This development represents a significant setback for the UK’s fresh produce industry, as it confronts the challenges posed by the new EU risk categorisation and strives to maintain its operational efficiency and economic viability in the face of these daunting changes.
 

Source: FPC FreshTalk Daily

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CNOOC uses cold energy for aquaculture

Being the first to start aquatic cultivation through LNG cold energy instead of discharging it into the ocean
China National Offshore Corp, the country’s largest liquefied natural gas importer, has spearheaded an innovative project — harnessing cold energy for the aquaculture industry — at its largest LNG receiving terminal.
 

Instead of discharging the huge amount of cold energy — which is produced during LNG vaporization and distribution — into the ocean, the company has decided to utilize it for aquaculture within the terminal, turning what was once considered waste into a valuable resource.

Similar to a marine aquarium, a total of 1,000 kilograms of red snappers and lobsters, among others, are raised in the cold water within the terminal, one of the largest LNG receiving stations in China.

Tests have shown that the fishes meet the requirements of various physiological indicators, said the company.

While cold energy has in the past been applied to low-temperature power generation and refrigerated storage, CNOOC has been the first to start aquatic cultivation through LNG cold energy, marking a new step in the construction of modern “ocean ranches” in the domestic LNG industry, said Li Ziyue, an analyst with BloombergNEF.

“During the re-gasification process of LNG, a substantial amount of cold energy is often wasted. If harnessed properly, it can greatly enhance energy efficiency and reduce emissions,” she said. “CNOOC’s innovative approach can both utilize LNG cold energy and revolutionize the aquaculture industry.”

According to CNOOC, the aquaculture experiment focuses on high-value fish species such as grouper and snapper, as well as seafood such as shrimp, crab, and sea cucumber. Its projected annual output is expected to reach 100,000 kilograms.

The use of cold energy in aquaculture is expected to reduce overall costs by 30 percent compared with traditional aquaculture.

With temperature control in aquaculture being a major cost factor, the project will help reduce expenses significantly along with considerable economic benefits, said Cao Yueming, secretary-general of the seed branch of the Shenzhen Fisheries Industry Association.

Lobster is considered a primary focus for cultivation due to its high value and strict environmental requirements.

Currently, lobsters are mainly imported, and the project will help replace high-end seafood imports through local breeding, he said.

Source: ChinaDaily

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Kingdom’s largest cold storage warehouse opens

Greatly boosting the ability to store and export temperature-sensitive agricultural products, thereby minimising food loss and waste

Cambodia’s first cross-docking warehouse – Kandal Cold Storage Project – has opened for operations along the banks of the Mekong River in Kandal province.

It was designed to prevent food waste and agricultural products that are sensitive to temperature.

Cross-docking is a logistics technique that aims to accelerate goods delivery and increase supply chain efficiency. It involves unloading goods from vehicles making incoming shipments at a logistics facility and transferring them to vehicles handling outgoing shipments, requiring little or no storage time in between. It has been hailed as a game changer for logistics in Cambodia.

The new cross-docking facility was officially opened on Wednesday morning at the Phnom Penh Autonomous Port by Bridgette L. Walker, the US Embassy’s Deputy Chief of Mission in Cambodia.

The opening ceremony was attended by representatives from the Cambodian government, the governments of the United Kingdom, Australia, Switzerland, and Singapore, as well as InfraCo Asia and Khmer Cold Chain.

The Kandal Cold Storage Project is an initiative by InfraCo Asia through Khmer Cold Chain (KCC).

Speaking at the opening ceremony, Walker said: “USAID’s co-investment with Khmer Cold Chain is an important step forward for Cambodia.”

“This facility will boost regional and international trade, prevent food spoilage, and provide economic benefits for businesses and customers alike.

“The facility is the first of its kind in Cambodia and will provide valuable services to dozens of import and export customers, directly and indirectly benefiting thousands of Cambodian farmers and consumers,” she added.

The 6,046-cubic-metre cross-docking facility in Kandal province’s Kien Svay district would greatly boost Cambodia’s ability to store and export temperature-sensitive agricultural products, thereby minimising food loss and waste.

USAID supports KCC through the “Feed the Future” Market Systems and Partnerships (MSP) Activity, which is one of several USAID initiatives in Cambodia that are increasing cold storage and logistical capability for agricultural uses.

This first-of-its-kind facility was made possible in part through a $2 million partnership between USAID and KCC, with $999,604 from USAID and $1,017,605 in co-investment from KCC.

It targets market system impediments to import-export prospects for major corporations, small and medium-sized businesses, and agricultural cooperatives, with an emphasis on enhancing access for smallholder farmers as well as women and youth-owned firms.

The facility will include a 50-foot cross-dock to serve Cambodian and regional farmers, agribusinesses, food processors, pharmaceutical enterprises, food merchants, and hotel and restaurant catering businesses.

According to the feasibility assessment, Cambodia’s present cold storage capacity must be increased by 140,000 cubic metres by 2030 to suit its supply chain demands.

The space would include facilities such as pre-cooling, co-packing and labelling, sanitary and phytosanitary services (SPS), picking, and direct store delivery.

These services will help increase Cambodia-based small-and-medium enterprises (SME) ability to access higher-value domestic markets.

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Red Sea issues prove we must find future-proof solutions

Many food companies' cargo flows are still very much based on old concepts with limited scenarios in case of a problem.

Incidents around the Red Sea persist, and while multiple parties are currently seeking short-term alternatives, the problems seem to be dragging on longer than expected. “We’ll have to find future-proof solutions for the logistics chain,” begins Steve Alaerts of Foodcareplus in Belgium. He joined the board of the International Fresh Produce Association (IFPA) last year. There, he will focus on building a fresh produce supply chain for the future. Steve sees synchromodality playing a significant role in this ‘Fresh Supply Chain of the Future’.

When the attacks began, the primary focus was on the immediate consequences and how to find solutions as quickly as possible. “Now, a few weeks later, people are beginning to realize this isn’t ending soon. They’re considering their business processes schedules. The urgent time has given way to reflection. During the pandemic, there was plenty of talk in the logistics chain about decreasing dependency.”

“That’s on certain regions, infrastructure, or business partners. But people are falling back into old habits. Many food companies’ cargo flows are still very much based on old concepts with limited scenarios in case of a problem. But what if something happens? Who has a plan for that? How will we solve that issue strategically? How will our stakeholders keep making money?” Steve wonders.

The logistics service provider’s director sees that the shelling by the Houthi rebels in the Red Sea is having several effects. “There’s the direct impact due to the current events. Consider, for instance, avocados or mangoes. These East African products must come to Europe within a few weeks. East Africa’s quality isn’t always on par with what other parts of the world bring to market.”

“If shipping companies don’t find a solution quickly, there may be no alternative service to get the fruit to Europe in good time. The same goes for the grape flows from India. These have to be shipped to Europe now, and they’re at their wits’ end there. Those delays can have catastrophic outcomes for the fruit,” Steve admits.

Extra costs, mainly within the chain
“That means we’re seeing the first price shocks due to the sensitive increases in transport and additional costs shipping companies want to make back. Also, if products no longer arrive from a particular region or the fruit suffers long delays, other supply regions will come under more pressure. Though, if there are losers, there are always winners. Countries that can supply the fruit can ask for more. That will ultimately also increase price pressure.

Steve explains that there is an additional cost factor in this case. “Don’t forget that during the pandemic, delays meant insurers had to pay absurd amounts to insured companies. That resulted in all those contracts being rejected after that and many delay clauses being scrapped. Importers and exporters can, thus, no longer claim compensation. That’s a crucial difference from the pandemic,” he says.

Alaerts adds that consumers will not notice these costs right away. “Short-term price shocks are generally not immediately passed on to them. Prices are agreed in the long term, so such volatility is managed within the chain. Eventually, if it remains an issue, it trickles down to retail prices and, thus, the general public. But, for now, those costs weigh somewhat extra on companies in the chain. They’ve realized that alternative solutions have become a must. Not just in the short term, but for a long-lasting, sustainable logistics chain.”

Synchromodality
Steve’s goal is synchromodality, for which he sees a crucial role. “People often see a modality that’s best for them, cost and speed-wise, thus pushing aside every other option. Air freight has been pushed into a corner lately, but even there, people are constantly working on sustainable solutions,” he explains.

“Think of sustainable aviation fuel. I don’t think we should write off such transport possibilities too quickly. It can offer a solution for disruptions in the logistics chain. Not switching entirely, but you could transport certain flows over two or three sectors: via sea, air, and rail. Then you can switch quickly if one falls away.”

“Rail is still difficult for the fresh sector because, unlike maritime transport, that’s not set up for major changes. Also, you travel through regions, both on the northern and southern routes, which isn’t entirely risk-free,” Steve points out. “Yet, now’s the chance to think carefully about how to deal with that by combining the different modalities.”

“You can already smartly combine sea and air transport to the benefit of the fruit and vegetable sector. That may cost something initially, but over time, increasingly competitive prices will emerge, and you’ll be able to switch quickly where there are problems. This is the moment for a broad call to participate in the conversation”, Steve concludes.

For more information:
Steve Alaerts
Foodcareplus Logistics
25 Oudeleeuwenrui
2000, Antwerp, Belgium
Tel: +32 (0) 324 29 150
sales@foodcareplus.com
www.foodcareplus.com

Source: Fresh Plaza

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Red Sea crisis presents challenge for Indian grape suppliers

Disruption to shipping services creates a major headache in terms of export shipments and imports of punnets.
 

India’s table grape shipments into Europe face a major challenge in order to overcome a sudden lack of logistical access via the Red Sea.

The disruption, which is the result of shipping lines diverting services away from the region in response to attacks on vessels by Houthi rebels, means exporters in the country are having to think on their feet and adjust their plans accordingly in the face of longer transit times around the southern tip of Africa.

That’s a potentially big problem for Europe’s grape buyers, who traditionally rely on India to fill a gap in supply between the Southern and Northern Hemispheres.

“The situation is scary and terrible, and the entire trade will be effected badly,” says Nitin Agrawal, managing director of India’s largest grape exporter, Euro Fruits. “We ship our first grapes this week. Now we face uncertain and longer transit times, a shortage of containers, fewer sailings. And our imported punnets from Italy are delayed by 30-40 days. Overall it is a complete mess.”

According to Agrawal, container freight rates were hovering around US$1,200 before the current crisis, but now they are “close to US$5,000”.

One table grape importer based in the UK told Fruitnet he agreed the next couple of months would be especially difficult for the entire industry.

“In terms of India, definitely challenging, although in theory it shouldn’t be a problem with vessels diverting around the Cape of Good Hope. “You just need to plan the extra cost of doing this and an additional two weeks transit time.”

However, with shipping lines are changing their plans and diverting ships to other ports at a moment’s notice, the situation in the Port of Mumbai remains uncertain. “It’s not clear what will arrive and depart Mumbai on time,” the importer added.

Source: Eurofruit
 

Photo by Maja Petric on Unsplash

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