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Lower Supply in South America to Raise Soybean Price Forecast in 2022


Lower Supply in South America to Raise Soybean Price Forecast in 2022

IndexBox has just published a new report: ‘World – Soya Beans – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

In 2021, the average annual soybean price soared by 43% y/y to $583 per tonne. This year, soybean prices were expected to remain relatively stable, but shortages in supply are likely to spur their growth.

Soybean prices are challenged with supply risks. According to World Bank and USDA data, the average annual soybean price (U.S Gulf Yellow Soybean #2, CIF Rotterdam) amounted to $583 per tonne in 2021, increasing by 43% compared to the previous year’s figure. Despite World Bank predicts the price to pick up 1% y/y to $588 per tonne this year, lower stocks due to poor weather in Brazil, Argentina and other countries may drive price growth.

Global soybean production is expected to reduce slightly by 0.6% y/y to 364M tonnes in 2022 due to expected lower outputs in Brazil, Argentina, Paraguay, China, Canada, Indonesia, Viet Nam and South Africa. Anticipated production increases in the U.S., the EU, Uruguay, India, Russia, Ukraine, and Mexico will not fully offset the drops in other countries.

Despite the harvested area in Brazil, the leading soybean producing country, expanded by 4% over the last year, drought reduced yields sharply. Brazil’s soybean production is expected to fall by 3% y/y to 134M tonnes.

Global Soybean Exports

In 2020, global soya bean exports rose significantly to 173M tonnes, picking up by 11% against 2019. In value terms, supplies soared to $64.1B (IndexBox estimates).

Brazil (83M tonnes) and the U.S. (65M tonnes) dominates the soya bean exports structure, together making up 85% of total exports. Paraguay (6.6M tonnes), Argentina (6.4M tonnes), and Canada (4.4M tonnes) followed a long way behind the leaders.

In value terms, the largest soya bean supplying countries worldwide were Brazil ($28.6B), the U.S. ($25.9B) and Argentina ($2.2B), with a combined 88% share of global exports.

In terms of the main exporting countries, the U.S. (+38% y/y) recorded the highest growth rate concerning the value of exports in 2020, while shipments for the other global leaders experienced more modest paces of growth.

Source: IndexBox Platform

olive oil

EU Olive Oil Production to Gain 13% Through 2030 on High Export Demand

IndexBox has just published a new report: ‘EU – Olive Oil (Virgin) – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.

High prices and growing demand in the olive oil market have spurred investments to expand and mechanize plantations that will automate the production process. This will enable increased production in the EU from a projected 2.2M tonnes in 2021 to 2.3M tonnes by 2025. Thanks to rising demand from Asia, top European exporters – Spain, Italy and Portugal – will be able to boost shipments.

Key Trends and Insights

High prices for olive oil in 2020-2021 have prompted an influx of investments to expand plantation sizes in Spain, Italy and Portugal. Olive oil production is becoming completely mechanized from planting trees to harvesting the product. This facilitates minimizing waste and achieving high quality and that improves profitability. Based on projections from the EU Agricultural Outlook 2021-31, IndexBox calculates that in 2021 EU olive oil production will total 2.2M tonnes, then by 2025 increase to 2.3M tonnes and in the following years, it will steadfastly grow to reach 2.5M tonnes by 2031. In Greece, land allocated for plantations will be reduced, however, the country will retain its status as one of the leading exporters.

Climate change, drought and water scarcity will be the key negative factors hindering production growth. To mitigate that, new olive tree varieties that are more resistant to extreme weather conditions will be introduced for new plantations and to replace current ones.

Consumption per capita of olive oil in EU countries, excluding Italy, Spain, Portugal and Greece, will rise about 4% annually, but remain relatively low (1.3 kg/person by 2025). At the same time, the arithmetic mean of per capita consumption in Italy, Spain, Portugal and Greece will decline from 9.3 kg/person in 2021 to 8.9 kg/person in 2025.

Demand from non-European countries is growing and thus driving a projected increase in the total EU olive oil shipments to outside the union from an estimated 860K tonnes in 2021 to 949K tonnes in 2025. The main gains in exports come from those countries without domestic production. In these cases, the main focus is on shipments of high-quality bottled and organic olive oil.

Portugal and Spain should significantly solidify their leadership positions in global exports thanks to heightened demand in Asia-Pacific as well as potentially increased shipments to Brazil. Spain is the largest olive oil supplier with a market share of 43% of global exports. Growing competition from producers in the southern hemisphere is forecast to not significantly influence the EU’s position on the international market.

Virgin Olive Oil Exports in the EU

In 2020, the amount of virgin olive oil exported in the EU expanded to 1.5M tonnes, growing by 11% against 2019 figures. In value terms, supplies reached $5.2B (IndexBox estimates).

Spain represented the major exporting country with an export of about 852K tonnes, which accounted for 56% of total exports. It was distantly followed by Italy (311K tonnes), Portugal (177K tonnes) and Greece (165K tonnes), together creating a 43% share of total supplies.

In value terms, Spain ($2.5B), Italy ($1.4B) and Portugal ($569M) appeared to be the countries with the highest levels of exports in 2020, together comprising 87% of total exports. Greece lagged somewhat behind, accounting for a further 10%.

In 2020, the virgin olive oil export price in the EU amounted to $3,371 per tonne, falling by -6.2% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was Italy ($4,481 per tonne), while Spain ($2,960 per tonne) was amongst the lowest.

Source: IndexBox Platform

section 232

U.S. Court of International Trade Stays Department of Commerce’s Motion for Voluntary Remand Setting Course for Court-Annexed Mediation in Section 232 Exclusions Dispute

On September 30, 2021, the Department of Commerce (“Commerce”) filed a motion requesting a voluntary remand to review 502 Section 232 exclusion request denials it issued to Voestalpine High Performance Metals Corporation and Ergo Specialty Steels, Incorporated (collectively “Voestalpine, et al.”) beginning in 2018. Specifically, Commerce in its motion acknowledges that it lacks documentation explaining why it rejected all 502 requests. This motion for voluntary remand comes only a couple months after Commerce requested the same type of voluntary remand in six separate Section 232 appeals.

In its September 15, 2021, order, the court rejected Commerce’s motions for voluntary remand and instead consolidated the six separate cases concerning similar denials of Section 232 exclusion requests and collectively referred the cases to court-annexed mediation. Specifically, the court ordered that (1) all cases are stayed for a maximum of 90 days beginning September 15th in which time mediation should be conducted and concluded, and (2) all cases be returned to the active calendar unless settlement is reached during the mediation process.

The court seems set to follow the same course in Voestalpine et al.’s appeal. On October 1, 2021, the CIT issued an order (1) staying Plaintiffs time to respond to Commerce’s September 30th motion until further notice and (2) requiring both parties to file statements on whether this case should be referred to court-annexed mediation.

Commerce in its statement filed on October 6, 2021, opposes the court-annexed mediation. In its statement, Commerce argues that the differences in the products that are the subject of the exclusion requests do not allow for a speedy resolution through mediation. Commerce also points out that in Voestalpine et al.’s initial complaint, the relief sought was a remand to Commerce.

Voestalpine et al., in its statement filed on October 8, 2021, rebuts both of Commerce’s arguments and supports court-annexed mediation. In its statement, Voestalpine et al. points out that the issue is not that Commerce denied the exclusion requests, but rather that it did not include the reasoning behind any denials at issue. Voestalpine et al. also argues that it did not seek relief through remand to Commerce merely for reconsideration of the exclusion requests. Rather, it sought a remand to Commerce with a requirement “to refund the Section 232 tariffs previously paid by Plaintiffs.”

It appears there may be a trend developing. The court seems reluctant to allow these actions to fully go back to Commerce while, at the same time, it is reluctant to provide plaintiffs the relief sought: a declaration that Commerce’s denials were unlawful.

It may also be that the court is waiting to see whether global politics will impact the status of Section 232 tariffs in the near future. Either way, it seems likely that this case will be referred to the same mediation process as the cases earlier this year and that a trend of court-annexed mediation is developing where Section 232 exclusion request denials are concerned.

As a reminder, the Trump Administration instituted Section 232 national security tariffs on steel and aluminum in 2018 and also set up an exclusion process for importers if they met certain qualifications and were able to demonstrate that the product was not available from any other source and did not harm national security interests. The exclusions were granted on a product-specific and importer-specific basis.


Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

rice exports

Crowding Competitors Out with Lower Prices, Indian Exports Dominate the Global Rice Market

IndexBox has just published a new report: ‘World – Rice – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Over 2020-2021 period, the global rice market displayed robust production indicators. Despite a pronounced shortage of shipping containers threatening to disrupt supplies to Africa, the global rice export market continues to expand. India maintains its status as the largest exporter, boasting the most competitive rice export prices.

Key Trends and Insights

Over 2020, rice production worldwide increased by 2.0 million tonnes against previous year figures, surging to a record 503.2 million tonnes (according to USDA data).

Africa, a key rice importer, may encounter a shortage in rice supplies, following a global lack of shipping containers in 2021. Despite the fact that rice production in Africa has increased by 10% over the past 5-year period, the continent continues to rely heavily on imports.

Over the 2019-2020 period, India exported a record 14.5K tonnes of rice, maintaining its dominant export position worldwide. The bumper crop yield seen over the past two years has enabled India to maintain competitively low prices, thereby displacing Pakistan’s and Myanmar’s exports from the African market. In 2021, it is projected that increased supplies to Bangladesh will further boost Indian exports. China is now redirecting its national rice stores for domestic consumption and has reduced the volume of rice exports to Africa.

Over the 2020-2021 period, India boasted the most competitively low prices ($370 per ton of nonparboiled white rice), while prices for Vietnamese rice surged, following a stocks shortage until the beginning of the rice crop yield ($515 per ton of 5-percent broken kernel long-grain milled rice), becoming comparable with Thai rice prices. The price for rice from the USA, Uruguay and Argentina now exceeds $600 per ton.

India to Feature Increasing Consumption and Export Volumes

The global rice market reached $363.8B in 2019, flattening at the previous year. The figures in this article relate to all types of rice (paddy, milled, etc.) in total.

The countries with the highest volumes of rice consumption in 2019 were China (211M tonnes), India (168M tonnes) and Indonesia (57M tonnes), together comprising 57% of global consumption. These countries were followed by Bangladesh, Viet Nam, Myanmar, Thailand and the Philippines, which together accounted for a further 21% (IndexBox estimates).

From 2012 to 2019, the biggest increases were in the Philippines, while rice consumption for the other global leaders experienced more modest paces of growth.

In value terms, China ($114.7B) led the market, alone. The second position in the ranking was occupied by Bangladesh ($57.1B). It was followed by the Philippines.

The countries with the highest levels of rice per capita consumption in 2019 were Myanmar (472 kg per person), Viet Nam (390 kg per person) and Bangladesh (330 kg per person).

From 2012 to 2019, the biggest increases were in India, while rice per capita consumption for the other global leaders experienced mixed trends in the per capita consumption figures.

After two years of growth, overseas shipments of rice decreased by -9.8% to 39M tonnes in 2019. The total export volume increased at an average annual rate of +1.5% over the period from 2012 to 2019.

In value terms, rice exports dropped to $23.1B (IndexBox estimates) in 2019. In general, exports, however, continue to indicate a relatively flat trend pattern.

In 2019, India (9.8M tonnes), distantly followed by Thailand (5.8M tonnes), Viet Nam (5.5M tonnes), Pakistan (4.6M tonnes), the U.S. (3.6M tonnes) and China (2.1M tonnes) represented the largest exporters of rice, together creating 80% of total exports. Brazil (1,063K tonnes), Paraguay (738K tonnes), Myanmar (733K tonnes) and Italy (679K tonnes) followed a long way behind the leaders.

From 2012 to 2019, the most notable rate of growth in terms of shipments, amongst the main exporting countries, was attained by China, while exports for the other global leaders experienced more modest paces of growth.

In value terms, the largest rice supplying countries worldwide were India ($6.8B), Thailand ($4.2B) and Viet Nam ($2.4B), together comprising 58% of global exports. Pakistan, the U.S., China, Italy, Brazil, Myanmar and Paraguay lagged somewhat behind, together comprising a further 28%.

The average rice export price stood at $584 per tonne in 2019, increasing by 5.3% against the previous year. In general, the export price, however, recorded a relatively flat trend pattern. Over the period under review, average export prices attained the maximum at $621 per tonne in 2012; however, from 2013 to 2019, export prices remained at a lower figure.

Source: IndexBox AI Platform



Disappearing Red Pistachios

If you’re an American over a certain age, you might recall the experience of staining your fingers while prying open red pistachios. They were a somewhat exotic treat, put out on occasion in a special bowl. That might seem strange to younger Americans who are only familiar with the natural tan pistachios that are ubiquitous as a post-workout food and snack.

The different associations are the result of a dramatic shift in where pistachios were produced and shipped after 1979 when the United States imposed sanctions against Iran in response to the Iran Hostage Crisis involving the taking of more than 50 American diplomats.

Mr. Whitehouse Leaves Washington

Pistachios are a biblical fruit, renowned as a court favorite of the Persian Queen of Sheba, a frequent traveler on the Silk Road and Mediterranean maritime routes. Iran has cultivated them for thousands of years, though large scale commercial production in Iran began just over one hundred years ago. American production is a much more recent phenomenon.

In 1929, American botanist William Whitehouse explored Persia on behalf of the U.S. Department of Agriculture, scooping up pistachio samples from farms located in modern day Iran. He returned in 1930 and planted test plots. When the trees matured a decade later, only one proved fruitful – Whitehouse named it Kerman after a city in Iran’s Rafsanjan central plateau. Pistachio trees can live hundreds of years and take their time to reach peak production – around twenty years.

Ironically, the U.S. pistachio industry – born from a single Iranian seed – matured in the 1970s precisely at the moment Iran’s trade with the United States, including of pistachios in dyed-red shells, came to a crashing halt.

The tale of U.S.-Iran pistachio trade has four plotlines that dramatize the broader quirks of global agricultural trade.

Plotline 1:

Extreme Quantitative Restrictions – A Trade Embargo

For most of history, Iran has been the world’s biggest source of pistachios. They are Iran’s most significant agricultural export by volume and value. Iran was the biggest supplier to the United States, but damaged relations following the Islamic Revolution of 1979 changed that. U.S. sanctions imposed since that time have a complex and layered history but have almost always involved a complete embargo on Iranian exports to the United States.

Following the lifting of the initial embargo in 1981, Iran’s food exports to the United States rebounded somewhat before the embargo was reintroduced in 1987. In an easing of sanctions in 2000, very modest amounts of foods from Iran were imported through Treasury Department-issued licenses. By 2010, imports of foods from Iran were again fully prohibited. The 2015 Iran Nuclear Deal would have enabled Iran to export pistachios and other agricultural products and lifted restrictions on financing, which Iran hoped would inject much needed capital investment in the agricultural sector. U.S. withdrawal of the Nuclear Deal in May 2018 saw a return to strict U.S. sanctions on imports from Iran.

Milestones in US-Iran competition in global pistachio trade

Plot Line 2:

Classic Farm Subsidies

When sanctions were first imposed in 1979, U.S. pistachio production was 7,700 metric tons, up quite substantially from the first U.S. commercial crop in 1976 of just 680 metric tons. In comparison, Iran had averaged 19,504 metric tons per year in the decade leading up to sanctions, but peaked in 1978 at nearly 59,874 metric tons. At the time, Iran accounted for nearly 100 percent of U.S. imported pistachio nuts. After falling off during the embargo, Iran renewed exports when the embargo was lifted in the early 1980s.

In March 1986, the Commerce Department found in favor of a U.S. industry petition that complained the Iranian government was subsidizing pistachio production. Iran (as many developing countries do) was providing supports to its agricultural producers by subsidizing the cost of key inputs such as fertilizer, chemicals, seeds, water and energy and by guaranteeing a minimum price for their output. The investigation resulted in a 99.5 percent countervailing duty on in-shell pistachios and a 318 percent duty on roasted pistachios.

Because Iran was not a signatory to the General Agreement on Tariffs and Trade (GATT) and is not a WTO member (the United States has repeatedly blocked its application for accession), no injury determination was required.

US tariffs on pistachios

Plot Line 3:

“Less Than Fair Value”

In a parallel 1986 investigation, the U.S. International Trade Commission (USITC) found that the volume of raw in-shell pistachios imported from Iran had increased significantly after the embargo was lifted in 1981. U.S. producers had secured 93.2 percent of the U.S. market in 1980, which was about 12.5 million pounds. By 1985, the overall size of the U.S. market had swelled to 61 million pounds, and Iran’s share had grown to 42.3 percent, accounting for almost 100 percent of all imports.

At the same time, the unit value of imports from Iran (import price) fell by around half. The USITC determined that raw in-shell pistachios imported from Iran were being sold at “less than fair market value” (or, being “dumped”) in the U.S. market, causing material injury to the U.S. industry. The Commerce Department calculated an offset in the form of a 241 percent antidumping duty, which would be applied in additional to the 99.5 percent countervailing duty.

In years of embargo, the duties were irrelevant and thus only two reviews have since been conducted to determine whether the duties should remain in place. In both 2005 and more recently in 2017, the USITC determined they should.

Plot Line 4:

Developed v. Developing Country Producers

According to the Iran Pistachio Association (IPA), Iran has around 150,000 farmers, but more than 70 percent of the production is small-scale on orchards of 2 hectares or less. In a “good” year, annual pistachio production capacity reaches 280,000 metric tons in Iran, but harvesting is inefficient. Pistachios are picked by hand from fallen clusters, their hulls removed by hand, and the nuts graded manually. Inadequate water management undercuts Iranian production, but when Iran’s yield is strong, the country’s pistachio exporters hold a price and geographic advantage. And IPA says they are competitive globally based on strong demand for the wide variety of Iranian pistachio cultivars with different flavor profiles and a higher kernel to in-shell ratio.

In contrast, the United States has some 950 growers, mainly in California, whose mechanized production is highly efficient, yielding a whopping 487,500 metric tons over the 2018-19 season (though output is cyclical and weather-dependent so yields may be down over 30 percent this year). Achievements in increased outputs made during a period when the U.S. market was closed to Iran, its only major competitor, enabled the U.S. industry to reach a position where it could both serve the domestic market and challenge Iran for market share all over the world. Iran has barely exported any pistachios to the United States since 1986 but it remains a contender in key third markets.

US leads pistachio production

Combined, the United States and Iran account for more than 70 percent of global exports of pistachios. Iran tends to hold the top spot in the Middle East, India, and Eastern Europe and holds an edge in developing country markets. The key battlegrounds in the U.S.-Iran pistachio wars are Western Europe and China where demand is strong and growing.

American pistachio growers fretted when the Trump administration raised tariffs on products from China. When China retaliated, raising the tariff on U.S. pistachios from five to as high as 55 percent, that created an opportunity for China to substitute Iranian pistachios. However, Iran ultimately suffered a bad crop year and it’s not clear whether China collected the tariffs, so sales of U.S. pistachios in China actually increased.

Not a Happy or Tragic Ending

The U.S. pistachio industry was concerned about the potential for renewed competition from Iran under the 2015 nuclear deal that eased sanctions. Their fears were allayed when the USITC voted to maintain the 1986 legacy of prohibitive tariffs. No matter, the Trump administration has strengthened sanctions and the embargo remains.

In the end, global demand for pistachios is higher than production, leaving room for both American and Iranian producers to find a market for all they can grow.

In an NPR interview four years ago, Brian Blackwell, a grower from Tulare County, CA wasn’t concerned about the reentry of Iranian pistachios in the U.S. market and explained the nature of global commodity markets this way: “This is a global marketplace nowadays. So, if Iran brought a million pounds of pistachios into the United States, that just means there’s a million pounds that didn’t get sold in China or Europe. U.S. pistachios could fill that market.”


Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on Republished with permission.

Containerized Shipping of U.S. Soybeans Spikes in Asian Countries

A recent report from the Illinois Soybean Association and the Federal Grain Inspection Service reveal containers shipping soybeans to Asian regions has spiked by 40 percent since 2014-2015.

Primarily led by Indonesian purchases, containerized shipping is experiencing an overall increase in demand for shipping U.S. soybeans to the specified region and shows no signs of slowing down. Additional information noted that container shipments of soybeans are expected to increase by 18 percent through August 31.

“Wider use of containers, thanks to the huge supply of empties in the Chicago area, has resulted in industry investments to increase the visibility and viability of this option,” said Eric Woodie, a trade analyst with the ISA checkoff program.

“There’s a major opportunity to take advantage of empty containers sitting idly in the U.S. and return them to export markets with soybeans. Not only does this help alleviate a significant problem in global trade, but it offers great value to international buyers, soybean exporters and Illinois farmers.”

Countries listed with the highest containerized soybean shipping include Indonesia, Thailand, Vietnam, and Malaysia. Indonesia is reported as the top buyer with a total of 1.4 million tons of soybean shipments. This method of shipping provides smaller companies the ability to minimize inventory investments while preventing lengthy delivery times, ultimately supporting added preservation.

Chiquita: Goodbye, Fyffes; Hello, Cutrale-Safra

Charlotte, NC – Shareholders of Chiquita Brands International have done an about-face in rejecting the global fruit producer’s proposed acquisition of Ireland-based rival Fyffes PLC.

The company has said it will, instead, enter into negotiations with Cutrale-Safra, a consortium made up of The Cutrale Group, a little-known Brazilian fruit wholesaler, and the Safra Group, a private investment company.

Since March, Chiquita remained focused on pursuing its planned acquisition of Fyffes for $526 million.

Chiquita-Fyffes merger would have expanded Chiquita’s reach deep into Europe, creating the largest banana-producer-distributor in the world with generating an estimated $4.6 billion in revenue annually.

In addition, the North Carolina-headquartered company would have had the opportunity to reincorporate in Ireland and gain significant tax considerations in a so-called ‘inversion’ transaction.

Now, instead of remaining a public company and reincorporating abroad, Chiquita will reportedly pay Fyffes a multimillion-dollar termination fee and be taken private.

The Cutrale-Safra group appeared relatively late after Chiquita had made its bid for Fyffes, offering an all-cash deal with no financing conditions, and closure of the deal within the calendar year.

Until now, Chiquita’s board had consistently rejected Cutrale-Safra’s bids as too low, including a recent bid of $14.50 a share, up from the previous $14.00 bid. The most recent bid by the Brazilians values Chiquita at around $680 million.

Based in Sao Paulo, Brazil, The Safra Group, with $200 billion in assets, operates the Safra National Bank of New York; Banco Safra in Brazil; Bank Jacob Safra in Switzerland; real estate and farmland on several continents; and a variety of other holdings.


Senator Slams US-Korea Free Trade Agreement

Washington, DC –The two-year-old US-Korea Free Trade Agreement hasn’t done enough to open the Asian country further to US exports, particularly American-made cars and trucks and agricultural products, according to Sen. Debbie Stabenow (D-Michigan).

Stabenow is the new Chair of the US Senate Finance Committee’s sub-committee on international trade.

Criticizing a trade deal that the Obama administration heralded in 2012, Stabenow cited the treaty as a reason for “caution” in negotiating the proposed Trans-Pacific Partnership that, she said, stands no chance of being ratified this year as there are “some very sticky issues” involving Japan and other nations in the talks.

“We’re continuing to push and the reason for this hearing was to talk about Korea but also to send a message about Japan and what comes next,” Stabenow told the media at a press conference following her first sub-committee meeting.

The free trade pact, she said, “has fallen short of our hopes” while the US trade deficit with Korea “has increased by nearly 50 percent,” Stabenow said.

The agreement, she added, “aimed to open Korea’s markets to American automakers. But agreeing to phase-out tariffs on US-made automobiles hasn’t been enough. Due to non-tariff barriers, Korea remains one of the most closed auto markets in the world.”

Stabenow’s evaluation of the US-Korea trade pact were countered by the Office of the US Trade Representative which released a statement saying that through May, sales of ‘Big Three’-made autos to Korea are up by more than 20 percent and key agriculture products like dairy have seen a more than 40 percent increase in exports.

“These are real results that benefit farmers, workers, and small business owners across the US. We also fully expect that as further tariff elimination takes place and Korea’s economy improves, we will reap greater benefits from KORUS,” the statement said.

Since the Korea agreement took effect, tariffs have been reduced on US-made autos by 50 percent and the value of US auto exports to Korea have increased by 80 percent.

The Association of Global Automakers (AGA), the association representing major foreign automakers including Korean automakers Hyundai Motor Co. and Kia Motors, noted that after the deal foreign automakers have started “exporting thousands of US-made vehicles to Korea” that are “supporting thousands of American jobs.”

Five years ago, 23 import brands together held just 6 percent of Korea’s automotive market, the group noted.

The AGA has released figures showing that Toyota Motor Corp., Honda Motor Co, Volkswagen and Nissan Motor Co. exported to Korea a total of 14,637 vehicles produced in the US in 2013. The group acknowledged that implementation “has not been seamless, and it is unrealistic to expect that an agreement of this magnitude and complexity could be implemented without encountering some challenges.”


‘Chlorine Chicken’ Stall US, EU Free Trade Talks

Washington, DC – The prospects of a free trade agreement that would generate $100 billion a year in economic growth for both the US and the European Union have stalled over Germany’s vocal concerns about the proposed pact’s perceived threats to food and the environment.

A transatlantic pact would open the European market to a broad range of US exports including agricultural products and create a market of 800 million people and allow EU members, particularly Germany, sell more of their luxury cars, precision machinery, transportation equipment and chemicals in the US.

Germany’s concerns focus on the standard US technique of disinfecting poultry with chlorine, which a majority of Germans recently surveyed believe is a danger to human health despite its successful use in the US to kill bacteria.

In the European Union, antibiotics are used with Brussels asserting that there will be no change in policy on the issue even should a Transatlantic Trade and Investment Partnership, or TTIP, become a reality.

Despite a flood of negative press, there are some in Germany who support the TTIP and counter the ‘conventional wisdom’ on the “chlorine chicken” issue.

“It is easier to win an argument with fear than with facts,” said one German businessman in the chemical industry, who supports the TTIP. “Chlorine chicken…genetically modified foods…these are out of the agreement, but it is hard to get the message across.”



US, Korea Sign ‘Organic’ Product Labeling Deal

Washington, DC – “Organic processed” products certified in the US or Korea can now be labeled as “organic” in either country, according to the US Department of Agriculture’s Foreign Agricultural Service (FAS).

The move, the FAS said, takes effect immediately and will allow American organic farmers, processors, and businesses greater access to Korea’s growing market for organic products.

Without the equivalency arrangement in place, organic farmers and businesses wanting to sell organic processed products in either country would have to obtain separate certifications to meet each country’s organic standards, the agency said.

This typically has meant two sets of fees, inspections, and paperwork, and delays for US farmers and businesses trying to export a variety of products including organic condiments, cereal, baby food, frozen meals, milk, and other processed products.

Similar to previous US equivalency arrangements with Canada, the European Union, and Japan, this arrangement with Korea eliminates significant barriers, especially for small and medium-sized organic businesses.

This arrangement is Korea’s first organic equivalency arrangement with any trading partner and serves as an example of how closely the US is working with Korea to address emerging issues and strengthen the trade relationship.

Prior to the announcement of the new arrangement, US and Korean technical experts reportedly conducted several on-site audits to ensure that their programs’ regulations, quality control measures, certification requirements, and labeling practices were compatible.

According to US industry estimates, exports of organic processed products from the United States are valued at approximately $35 million annually.

Korea’s National Agricultural Products Quality Management Service and the US Department of Agriculture’s (USDA) National Organic Program—which oversee organic products in their respective countries—will oversee implementation of the new arrangement.

Both countries, the FAS said, “will continue to have regular discussions and will review each other’s programs periodically to ensure that the terms of the arrangement are being met.”