Summary
Table of contents
This week we prepared 5 most important stories from international trade. We will cover such topics as GMO corn import to Mexico, new European restrictions, increased milk imports to China, global food imports, as well as new UK’s programs. Have a nice lecture!
In December 2020, the Mexican government announced the plan to phase out GMO corn importation and ban the use of glyphosate herbicide by 2024. The initiative is part of the strategy to protect native corn farming, Mexican gastronomic heritage and to enhance food security and independence. Even though the import ban is going into effect in 2024, it seems that the government is already delaying permits for GMO corn imports. Agricultural leaders are frustrated with the new regulation and declare to fight against the ban with the possible battle ending up in the Supreme Court.
The European Commission has been working on a new set of rules regarding the importation of certain dairy foods into the EU and has published the outcome of these works last year. The new regulation comes into force in October 2021 and introduces more rigorous requirements for the import of dairy, eggs, meat, seafood, and composite foods such as pizza, cookies, and baked goods. The US is deeply concerned that the new rules may critically jeopardize the dairy export to the EU. The US industry officials claim that dairy shipments are already subjected to elevated tariffs and restrictions on licensing. Further requirements introduced by the European Commission such as increased inspections on foot and mouth disease and new record-tracking systems will put too much pressure on the producers.
Between January and April 2021, Australia shipped a total of 86,000 metric tonnes of bulk and packaged milk – an increase of 26.7% from the same period last year. At the same time, New Zealand exported 94,000 metric tonnes of the same products – a growth of 25.4% compared to January – April 2020. The orders for dairy goods produced in Australia and New Zealand mostly came from China, which increased purchases of most dairy products. In the first four months of 2021, the country increased the shipments from Australia for butter by 703% and for SMP by 157% compared to the same period last year. At the same time, New Zealand increased its deliveries to China by 95.69% for cheese and by 75.11% for whey protein isolate. However, experts predict that dairy shipments to China are expected to slow down in the second half of 2021.
The recent FAO publication on food outlook reports that the global imports of food products and their shipping costs will amount to $1.715 trillion in 2021 – an increase from $1.530 trillion recorded in 2020. Last year, the agricultural trade expanded as food consumption and the international market remained resilient during the pandemic. The price increases hit mostly the poorer countries and those most reliant on imported food products. According to FAO, the food import value index peaked in March 2021 as freight costs continue to rise. Experts predict that the demand from China will be determinant to shaping the prices of internationally traded commodities in the next year.
The new UK governmental program was launched to support the local food and beverage manufacturers with boosting their global export strategy. The initiative will partner together the companies having extensive knowledge and experience in international trade with business owners entering the export market. The program developed by the UK Department for International Trade aims to enhance agriculture shipments and explore new markets. In 2020, the country’s food and drink exports amounted to £21.3 billion worth of products so in the post-Brexit reality the UK is forced to seek opportunities to reduce export tariffs and support jobs in the industry.
Permits for GMO corn import to Mexico delayed again
In December 2020, the Mexican government announced the plan to phase out GMO corn importation and ban the use of glyphosate herbicide by 2024. The initiative is part of the strategy to protect native corn farming, Mexican gastronomic heritage and to enhance food security and independence. Even though the import ban is going into effect in 2024, it seems that the government is already delaying permits for GMO corn imports. Agricultural leaders are frustrated with the new regulation and declare to fight against the ban with the possible battle ending up in the Supreme Court.
New EU restrictions may jeopardize dairy trade with the US
The European Commission has been working on a new set of rules regarding the importation of certain dairy foods into the EU and has published the outcome of these works last year. The new regulation comes into force in October 2021 and introduces more rigorous requirements for the import of dairy, eggs, meat, seafood, and composite foods such as pizza, cookies, and baked goods. The US is deeply concerned that the new rules may critically jeopardize the dairy export to the EU. The US industry officials claim that dairy shipments are already subjected to elevated tariffs and restrictions on licensing. Further requirements introduced by the European Commission such as increased inspections on foot and mouth disease and new record-tracking systems will put too much pressure on the producers.
Increased milk exports from Australia and New Zealand due to Chinese demand
Between January and April 2021, Australia shipped a total of 86,000 metric tonnes of bulk and packaged milk – an increase of 26.7% from the same period last year. At the same time, New Zealand exported 94,000 metric tonnes of the same products – a growth of 25.4% compared to January – April 2020. The orders for dairy goods produced in Australia and New Zealand mostly came from China, which increased purchases of most dairy products. In the first four months of 2021, the country increased the shipments from Australia for butter by 703% and for SMP by 157% compared to the same period last year. At the same time, New Zealand increased its deliveries to China by 95.69% for cheese and by 75.11% for whey protein isolate. However, experts predict that dairy shipments to China are expected to slow down in the second half of 2021.
Global food imports may grow by 12% this year
The recent FAO publication on food outlook reports that the global imports of food products and their shipping costs will amount to $1.715 trillion in 2021 – an increase from $1.530 trillion recorded in 2020. Last year, the agricultural trade expanded as food consumption and the international market remained resilient during the pandemic. The price increases hit mostly the poorer countries and those most reliant on imported food products. According to FAO, the food import value index peaked in March 2021 as freight costs continue to rise. Experts predict that the demand from China will be determinant to shaping the prices of internationally traded commodities in the next year.
The UK supports local food producers to increase exports
The new UK governmental program was launched to support the local food and beverage manufacturers with boosting their global export strategy. The initiative will partner together the companies having extensive knowledge and experience in international trade with business owners entering the export market. The program developed by the UK Department for International Trade aims to enhance agriculture shipments and explore new markets. In 2020, the country’s food and drink exports amounted to £21.3 billion worth of products so in the post-Brexit reality the UK is forced to seek opportunities to reduce export tariffs and support jobs in the industry.
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