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Italy’s Exports of Composition Leather Declined for the Fourth Consecutive Year

leather

Italy’s Exports of Composition Leather Declined for the Fourth Consecutive Year

IndexBox has just published a new report: ‘Italy – Composition Leather – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the composition leather market in Italy amounted to $17M in 2018, reducing by -2.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Overall, composition leather consumption continues to indicate a deep drop.

Production in Italy

In 2018, approx. 9.8K tonnes of composition leather were produced in Italy; reducing by -5.9% against the previous year. In general, composition leather production continues to indicate an abrupt setback. The growth pace was the most rapid in 2011 when production volume increased by 3.4% year-to-year. Over the period under review, composition leather production attained its peak figure volume at 16K tonnes in 2007; however, from 2008 to 2018, production remained at a lower figure.

In value terms, composition leather production totaled $11M in 2018 estimated in export prices. Overall, composition leather production continues to indicate a deep reduction. The most prominent rate of growth was recorded in 2011 with an increase of 99% against the previous year. In that year, composition leather production reached its peak level of $96M. From 2012 to 2018, composition leather production growth remained at a somewhat lower figure.

Exports from Italy

In 2018, the exports of composition leather from Italy totaled 6.9K tonnes, falling by -7.2% against the previous year. Over the period under review, composition leather exports continue to indicate a measured decline. The growth pace was the most rapid in 2010 with an increase of 43% y-o-y. Exports peaked at 10K tonnes in 2011; however, from 2012 to 2018, exports stood at a somewhat lower figure.

In value terms, composition leather exports totaled $21M (IndexBox estimates) in 2018. In general, composition leather exports continue to indicate a perceptible descent. The pace of growth was the most pronounced in 2011 when exports increased by 31% year-to-year. In that year, composition leather exports reached their peak of $34M. From 2012 to 2018, the growth of composition leather exports remained at a somewhat lower figure.

Exports by Country

China, Hong Kong SAR (1.6K tonnes) was the main destination for composition leather exports from Italy, accounting for a 23% share of total exports. Moreover, composition leather exports to China, Hong Kong SAR exceeded the volume sent to the second major destination, China (673 tonnes), twofold. Portugal (500 tonnes) ranked third in terms of total exports with a 7.2% share.

From 2007 to 2018, the average annual growth rate of volume to China, Hong Kong SAR amounted to -2.4%. Exports to the other major destinations recorded the following average annual rates of exports growth: China (+4.2% per year) and Portugal (+1.9% per year).

In value terms, Cambodia ($3.6M), China ($2.4M) and China, Hong Kong SAR ($2.4M) appeared to be the largest markets for composition leather exported from Italy worldwide, together comprising 41% of total exports.

Cambodia experienced the highest rates of growth with regard to exports, among the main countries of destination over the last eleven-year period, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average composition leather export price stood at $2,972 per tonne in 2018, rising by 3.8% against the previous year. Overall, the composition leather export price, however, continues to indicate a slight decline. The most prominent rate of growth was recorded in 2008 when the average export price increased by 11% against the previous year. In that year, the average export prices for composition leather attained their peak level of $3,767 per tonne. From 2009 to 2018, the growth in terms of the average export prices for composition leather failed to regain its momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Cambodia ($12,765 per tonne), while the average price for exports to Poland ($885 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Cambodia, while the prices for the other major destinations experienced more modest paces of growth.

Imports into Italy

Composition leather imports into Italy stood at 3.4K tonnes in 2018, stabilizing at the previous year. Overall, composition leather imports continue to indicate a perceptible downturn. The growth pace was the most rapid in 2010 with an increase of 54% against the previous year. Over the period under review, composition leather imports attained their maximum at 5.1K tonnes in 2007; however, from 2008 to 2018, imports stood at a somewhat lower figure.

In value terms, composition leather imports amounted to $12M (IndexBox estimates) in 2018. Over the period under review, composition leather imports continue to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2010 when imports increased by 46% y-o-y. Over the period under review, composition leather imports attained their maximum at $12M in 2011; however, from 2012 to 2018, imports remained at a lower figure.

Imports by Country

In 2018, Germany (2.3K tonnes) constituted the largest supplier of composition leather to Italy, accounting for a 67% share of total imports. Moreover, composition leather imports from Germany exceeded the figures recorded by the second-largest supplier, Slovenia (499 tonnes), fivefold. China (261 tonnes) ranked third in terms of total imports with a 7.6% share.

From 2007 to 2018, the average annual growth rate of volume from Germany stood at -3.7%. The remaining supplying countries recorded the following average annual rates of imports growth: Slovenia (-8.0% per year) and China (+42.8% per year).

In value terms, Germany ($7.6M) constituted the largest supplier of composition leather to Italy, comprising 63% of total composition leather imports. The second position in the ranking was occupied by the UK ($1M), with a 8.3% share of total imports. It was followed by Slovenia, with a 8.1% share.

From 2007 to 2018, the average annual growth rate of value from Germany stood at -1.2%. The remaining supplying countries recorded the following average annual rates of imports growth: the UK (+10.9% per year) and Slovenia (-4.3% per year).

Import Prices by Country

In 2018, the average composition leather import price amounted to $3,545 per tonne, increasing by 11% against the previous year. Over the last eleven-year period, it increased at an average annual rate of +3.7%. The most prominent rate of growth was recorded in 2011 when the average import price increased by 17% y-o-y. Over the period under review, the average import prices for composition leather attained their maximum in 2018 and is likely to see steady growth in the near future.

Prices varied noticeably by the country of origin; the country with the highest price was the UK ($8,990 per tonne), while the price for Slovenia ($1,985 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Hungary, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

beeswax

Asia’s Beeswax Market Is Estimated at $206M in 2018, an Increase of 3.4%

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

The revenue of the beeswax market in Asia amounted to $206M in 2018, increasing by 3.4% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The total market indicated a moderate increase from 2007 to 2018: its value increased at an average annual rate of +0.7% over the last eleven years.

Consumption By Country in Asia

The country with the largest volume of beeswax consumption was India (26K tonnes), accounting for 64% of total consumption. Moreover, beeswax consumption in India exceeded the figures recorded by the region’s second-largest consumer, Turkey (4.9K tonnes), fivefold. The third position in this ranking was occupied by South Korea (3.7K tonnes), with a 9.1% share.

In India, beeswax consumption expanded at an average annual rate of +2.6% over the period from 2007-2018. In the other countries, the average annual rates were as follows: Turkey (+1.9% per year) and South Korea (-1.1% per year).

In value terms, India ($127M) led the market, alone. The second position in the ranking was occupied by Turkey ($42M). It was followed by South Korea.

The countries with the highest levels of beeswax per capita consumption in 2018 were South Korea (73 kg per 1000 persons), Turkey (59 kg per 1000 persons) and Malaysia (39 kg per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of beeswax per capita consumption, amongst the main consuming countries, was attained by Japan, while the other leaders experienced more modest paces of growth.

Market Forecast 2019-2025 in Asia

Driven by increasing demand for beeswax in Asia, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +0.2% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 42K tonnes by the end of 2025.

Production in Asia

In 2018, approx. 50K tonnes of beeswax were produced in Asia; remaining stable against the previous year. The total output volume increased at an average annual rate of +1.3% from 2007 to 2018; the trend pattern remained consistent, with only minor fluctuations being recorded in certain years. The pace of growth appeared the most rapid in 2008 when production volume increased by 5.6% against the previous year. Over the period under review, beeswax production reached its peak figure volume in 2018 and is likely to continue its growth in the immediate term.

In value terms, beeswax production stood at $292M in 2018 estimated in export prices. Over the period under review, beeswax production continues to indicate prominent growth. The growth pace was the most rapid in 2011 with an increase of 25% against the previous year. Over the period under review, beeswax production attained its peak figure level at $392M in 2014; however, from 2015 to 2018, production failed to regain its momentum.

Production By Country in Asia

India (24K tonnes) remains the largest beeswax producing country in Asia, comprising approx. 49% of total production. Moreover, beeswax production in India exceeded the figures recorded by the region’s second-largest producer, China (11K tonnes), twofold. Turkey (4.5K tonnes) ranked third in terms of total production with a 9% share.

In India, beeswax production increased at an average annual rate of +2.0% over the period from 2007-2018. In the other countries, the average annual rates were as follows: China (+0.5% per year) and Turkey (+1.4% per year).

Exports in Asia

The exports totaled 14K tonnes in 2018, surging by 8.1% against the previous year. The total exports indicated a strong increase from 2007 to 2018: its volume increased at an average annual rate of +6.7% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, beeswax exports increased by +9.1% against 2016 indices. The pace of growth appeared the most rapid in 2010 when exports increased by 26% year-to-year. The volume of exports peaked in 2018 and are expected to retain its growth in the near future.

In value terms, beeswax exports amounted to $79M (IndexBox estimates) in 2018. In general, beeswax exports continue to indicate a resilient expansion. The growth pace was the most rapid in 2010 with an increase of 34% y-o-y. The level of exports peaked at $80M in 2015; however, from 2016 to 2018, exports stood at a somewhat lower figure.

Exports by Country

In 2018, China (9.7K tonnes) represented the major exporter of beeswax, committing 69% of total exports. It was distantly followed by Malaysia (1,970 tonnes) and Viet Nam (1,494 tonnes), together committing a 25% share of total exports. India (339 tonnes) held a little share of total exports.

Exports from China increased at an average annual rate of +5.3% from 2007 to 2018. At the same time, Viet Nam (+19.6%), India (+15.2%) and Malaysia (+8.8%) displayed positive paces of growth. Moreover, Viet Nam emerged as the fastest-growing exporter in Asia, with a CAGR of +19.6% from 2007-2018. China (+30 p.p.), Viet Nam (+9.2 p.p.), Malaysia (+8.5 p.p.) and India (+1.9 p.p.) significantly strengthened its position in terms of the total exports, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, China ($61M) remains the largest beeswax supplier in Asia, comprising 77% of total beeswax exports. The second position in the ranking was occupied by Viet Nam ($12M), with a 15% share of total exports. It was followed by India, with a 2% share.

From 2007 to 2018, the average annual rate of growth in terms of value in China stood at +10.9%. In the other countries, the average annual rates were as follows: Viet Nam (+24.8% per year) and India (+15.5% per year).

Export Prices by Country

The beeswax export price in Asia stood at $5,595 per tonne in 2018, going up by 1.8% against the previous year. The export price indicated a buoyant increase from 2007 to 2018: its price increased at an average annual rate of +4.4% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, beeswax export price decreased by -5.3% against 2015 indices. The growth pace was the most rapid in 2012 when the export price increased by 20% y-o-y. Over the period under review, the export prices for beeswax reached their maximum at $5,910 per tonne in 2015; however, from 2016 to 2018, export prices failed to regain their momentum.

Prices varied noticeably by the country of origin; the country with the highest price was Viet Nam ($7,731 per tonne), while Malaysia ($670 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by China, while the other leaders experienced more modest paces of growth.

Imports in Asia

In 2018, approx. 5.5K tonnes of beeswax were imported in Asia; stabilizing at the previous year. Overall, beeswax imports continue to indicate remarkable growth. The most prominent rate of growth was recorded in 2010 when imports increased by 40% against the previous year. The volume of imports peaked in 2018 and are likely to see steady growth in the near future.

In value terms, beeswax imports totaled $28M (IndexBox estimates) in 2018. In general, beeswax imports continue to indicate a prominent increase. The most prominent rate of growth was recorded in 2010 when imports increased by 47% year-to-year. Over the period under review, beeswax imports reached their maximum in 2018 and are expected to retain its growth in the immediate term.

Imports by Country

India represented the major importing country with an import of around 2.2K tonnes, which resulted at 40% of total imports. Japan (889 tonnes) took the second position in the ranking, followed by China (557 tonnes), Turkey (405 tonnes) and South Korea (357 tonnes). All these countries together took approx. 40% share of total imports. Pakistan (186 tonnes), Thailand (181 tonnes) and Taiwan, Chinese (93 tonnes) followed a long way behind the leaders.

India was also the fastest-growing in terms of the beeswax imports, with a CAGR of +23.1% from 2007 to 2018. At the same time, China (+20.6%), Pakistan (+14.2%), Turkey (+9.8%), Thailand (+5.9%) and Taiwan, Chinese (+1.8%) displayed positive paces of growth. Japan experienced a relatively flat trend pattern. By contrast, South Korea (-2.4%) illustrated a downward trend over the same period. India (+36 p.p.), China (+8.9 p.p.), Turkey (+4.7 p.p.), Pakistan (+2.6 p.p.), Japan (+1.6 p.p.) and Thailand (+1.5 p.p.) significantly strengthened its position in terms of the total imports, while South Korea saw its share reduced by -2% from 2007 to 2018, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the largest beeswax importing markets in Asia were Japan ($8.2M), China ($5.5M) and South Korea ($2.9M), with a combined 60% share of total imports.

China recorded the highest growth rate of imports, among the main importing countries over the last eleven years, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The beeswax import price in Asia stood at $5,033 per tonne in 2018, remaining stable against the previous year. Over the last eleven years, it increased at an average annual rate of +1.5%. The growth pace was the most rapid in 2014 when the import price increased by 35% y-o-y. In that year, the import prices for beeswax attained their peak level of $5,431 per tonne. From 2015 to 2018, the growth in terms of the import prices for beeswax remained at a lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2018, the country with the highest price was China ($9,919 per tonne), while India ($1,098 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by South Korea, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

quotas

Are Quotas Worse Than Tariffs?

Quotas Return

With all the focus on tariffs these days, it is easy to overlook the return of another tool used to limit imports: quotas.

Over a year ago, the Trump Administration used Section 232 of the Trade Expansion Act of 1962 to impose 25 percent tariffs on specified steel imports and 10 percent tariffs on specified aluminum imports. Three countries – South Korea, Brazil and Argentina – made agreements with the United States to apply quotas to their steel exports in lieu of the Section 232 tariffs. Argentina also agreed to quotas on its aluminum exports.

According to numerous reports, U.S. negotiators were seeking similar agreements with Canada, Mexico, Japan and the European Union (EU). In May 2019, however, the governments of the United States, Canada and Mexico announced that they had reached a deal to lift steel and aluminum tariffs without imposing quotas, choosing instead to adopt a monitoring system with the right to re-impose tariffs on these products if surges are detected in the future. This deal could be a template for agreements with Japan and the EU to address their steel and aluminum tariffs.

In ongoing Section 232 investigations, the administration is keeping quotas on the table in other sectors including autos and auto parts, uranium ore and titanium sponges.

The Difference between Quotas and Tariffs

Quotas and tariffs are both used to protect domestic industries by artificially raising prices in the domestic market. Their administration and effects, however, differ in specific ways. Quotas restrict the quantity of a good imported from another country. Tariffs are a charge levied on the value of goods imported from another country.

While tariffs generate revenue that is paid to the importing country’s treasury, the value of a quota, also called “quota rents,” generally goes to the foreign exporters who are able to sell goods subject to the quota at higher prices and collect higher per unit revenue. In both cases, domestic consumers in the importing country pay the costs of tariffs and quota rents. But with quotas, the government of the importing country receives no revenue.

Quotas can be much more complicated to administer than tariffs. Tariffs are collected by a customs authority as goods enter a country. With quotas, customs authorities must either monitor imports directly to ensure that no goods above the quota amount are imported, or can award licenses to specific companies, giving them the right to import the amount allowed under the quota. Quotas can also take the form of a voluntary export restraint (VER), where the exporting country administers the quota.

The Cost of Quotas

Costs and pricing under a tariff regime are more transparent and predictable compared to quotas. For example, if a good is subject to a 10 percent tariff, then the good should cost about 10 percent more than it did before the tariff was imposed. With a quota, the price of that same good can increase as long as demand for the good continues and the supply remains constrained. This can mean that quota rents are ultimately more costly to domestic consumers than a tariff. In this way, quota regimes may incentivize foreign producers to upgrade the quality of their exports, leading to more direct competition with domestic producers and a higher-price product mix for consumers.

On the other hand, if foreign producers export low-quality goods under a quota regime, prices and profits for both foreign and domestic producers of low-quality goods will rise because of quotas, while domestic consumers were forced to pay more for lower quality goods.

The General Agreement on Tariffs and Trade (GATT) prohibits quotas and other quantitative restrictions under Article XI (with specific exceptions including for “security reasons”) as the GATT parties agreed that quantitative restrictions were overly restrictive and distortive compared to duties or taxes, where are permitted.

Tricky to Administer

In the case of South Korea, Brazil, and Argentina and Section 232 quotas, each country agreed to product-specific absolute quotas on 54 separate steel articles based on each country’s average annual import volumes of steel from 2015 through 2017. Argentina also accepted product specific absolute quotas on two aluminum product categories.

Steel quotas under Section 232- South Korea, Brazil and Argentina

These quotas are administered by the United States to give exporters the least possible flexibility and demonstrate how complicated quota regimes can be. Some of the quotas are absolute – once the quota is reached, no additional amount can enter the United States for any price, unless an exclusion is granted. Some quotas apply to the full calendar year (but in practice may fill the minute the quota takes effect), and others are subject to quarterly limitations. Once a quota is filled in a given quarter, importers must wait until the next quarter until they can bring the product into the United States.

The True Cost in Practice

For South Korea, Brazil, and Argentina, quotas have reduced export volumes and revenue. According to U.S. Department of Commerce data, the overall quantity of steel South Korea, Brazil, and Argentina exported to the United States in 2018 dropped significantly compared to 2017, by 26.2 percent, 14.6 percent, and 20.1 percent, respectively.

In terms of value, South Korea and Argentina’s steel exports subject to quotas dropped by $430 million and $1 million, respectively, from 2017 to 2018, while the value of Brazil’s steel exports under the quota increased by nearly $145 million in 2018. Argentina’s aluminum exports subject to the quota dropped by approximately 86.8 million kilograms from 2017 to 2018, by 32.8 percent, with a decrease in value of approximately $101 million, according to data from the U.S. International Trade Commission.

Although South Korea, Brazil, and Argentina have benefitted from generally higher prices in the United States for steel and aluminum, so far, the quotas are effectively reducing U.S. imports from these countries.

US imports of steel mill products- South Korea, Brazil and Argentina

Upsides for U.S. Steel Producers

For U.S. steel and primary aluminum producers, Section 232 tariffs, and to a limited extent, quotas, are accomplishing their goal of bolstering U.S. manufacturing capacity and allowing their firms to become profitable again — at least in the short run.

Though some proponents of the Section 232 protections do not advocate for quotas specifically, and recognize their downsides, others argue that quotas are a necessary component of the Section 232 program. Here’s why.

First, for industries seeking protection, quotas arguably provide greater certainty than tariffs that imports will be limited. Under tariffs, if importers can bear the costs, or exporters can reduce their prices, imports will continue to flow in and competition will remain high. For example, Vietnam’s 2018 exports of flat steel products, which are covered by Section 232 tariffs, increased by 79 percent compared to 2017. If strict quotas were applied instead of tariffs, Vietnam’s 2018 exports likely would have decreased.

Second, steel and aluminum manufacturers argue that without quotas, “countries that have exemptions [to the Section 232 tariffs] would likely redirect their metals exports to the United States to take advantage of higher prices there, undermining the purpose of the tariffs.”

Finally, the Trump Administration perceives that Section 232 quota agreements with U.S. trading partners and security allies, in combination with tariffs, are helping to pressure and incentivize allies to take seriously the problem of global excess capacity. U.S. unilateral tariffs may also have the opposite effect, though, – making allies less willing to work cooperatively with the United States to address fundamental global problems.

Downsides for Downstream Industries

It’s a different story for U.S. downstream manufacturers, who say quotas have entailed “severe supply constraints” and “created even more business uncertainty than tariffs”.

Importers may no longer be able to guarantee that their goods can enter under the quota, or at all. They may encounter unanticipated costs in the form of storage charges and shipping fees if the quota is filled while goods are in transit. They may face unpredictably higher prices for goods subject to a quota. They may have to find new suppliers and bear all the costs of negotiating new contracts, building new relationships, and shipping from a new location. The exclusion process implemented in August 2018 may provide some relief for importers under supply pressure, though its application may also introduce more uncertainty.

More generally, downstream manufacturers argue that Section 232 quotas and tariffs raise prices inhibiting their competitiveness, and have a chilling effect on growth, employment and investment. Although many businesses have been buoyed by the strong U.S. economy, they say that employment and sales in their industries would have increased even more were it not for tariffs and quotas raising prices. Moreover, downstream industries using steel and aluminum products employ more Americans than steel and primary aluminum manufacturers, so many jobs are vulnerable if supply contracts too much.

North America Alternative to Metal Quotas

In order to move forward with passage of the United States-Mexico-Canada Agreement (USMCA), the United States, Canada and Mexico first had to address the steel, aluminum and retaliatory tariffs in place since 2018. Although all parties considered quotas as a possible way forward, in the end, they agreed to lift all steel, aluminum, and related retaliatory tariffs, as well as withdraw pending WTO litigation, without imposing quotas.

The three countries agreed to prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices; prevent the transshipment of aluminum and steel made outside of Canada, Mexico, or the United States to the other country; and establish a monitoring process to detect surges of aluminum and steel imports among them.

This agreement is a positive development for two key reasons: the parties removed tariffs while avoiding quotas, and agreed to address the underlying cause of U.S. industry distress – global excess capacity.

Addressing Global Excess Capacity is Key

Though tariffs and quotas may provide short-term relief, solving underlying global excess capacity problems is critical to addressing U.S. industries’ long-term challenges, and any long-term solution will require more than the mere application of protectionist measures. The United States will have to work closely and creatively with its trading partners to address this challenge directly and to persuade the world’s largest producers — including China — to reduce global excess capacity.

__________________________________________________________

This article is a shortened version of an original report published by the Hinrich Foundation.

Feature Image Credit: Jason Welker, from “Protectionist Quotas” video on Youtube.

Holly Smith

Holly Smith is a lawyer and consultant based in Hong Kong. From 2009 to 2015, she served in the Office of the United States Trade Representative as a Director for Intellectual Property and Innovation, a Director for China Affairs, and a senior policy advisor to the Deputy U.S. Trade Representative.

This article originally appeared on TradeVistas.org. Republished with permission.

Global Lard Market to Grow 1.6% a Year through 2025, Fuelled by Rising Demand in China

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

The global lard market revenue amounted to $15.7B in 2018, jumping by 2.9% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +2.1% from 2012 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations throughout the analyzed period. The most prominent rate of growth was recorded in 2017 when the market value increased by 6.6% against the previous year. Over the period under review, the global lard market attained its peak figure level in 2018 and is expected to retain its growth in the near future.

Consumption By Country

The country with the largest volume of lard consumption was China (2.6M tonnes), accounting for 40% of total consumption. Moreover, lard consumption in China exceeded the figures recorded by the world’s second-largest consumer, Germany (615K tonnes), fourfold. Brazil (478K tonnes) ranked third in terms of total consumption with a 7.3% share.

From 2012 to 2018, the average annual growth rate of volume in China totaled +2.2%. In the other countries, the average annual rates were as follows: Germany (+0.7% per year) and Brazil (+1.3% per year).

In value terms, China ($11.1B) led the market, alone. The second position in the ranking was occupied by Russia ($1B). It was followed by Brazil.

The countries with the highest levels of lard per capita consumption in 2018 were Belgium (12,397 kg per 1000 persons), Germany (7,481 kg per 1000 persons) and Canada (4,662 kg per 1000 persons).

From 2012 to 2018, the most notable rate of growth in terms of lard per capita consumption, amongst the main consuming countries, was attained by Russia, while the other global leaders experienced more modest paces of growth.

Market Forecast 2019-2025

Driven by increasing demand for lard in China, the world market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.6% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 7.3M tonnes by the end of 2025.

Production 2007-2018

Global lard production totaled 6.5M tonnes in 2018, increasing by 2% against the previous year. The total output volume increased at an average annual rate of +1.6% over the period from 2012 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2017 with an increase of 2.5% against the previous year. The global lard production peaked in 2018 and is expected to retain its growth in the immediate term.

In value terms, lard production stood at $15.6B in 2018 estimated in export prices. The total output value increased at an average annual rate of +2.0% over the period from 2012 to 2018; the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The most prominent rate of growth was recorded in 2017 with an increase of 11% against the previous year. The global lard production peaked in 2018 and is likely to continue its growth in the near future.

Production By Country

The country with the largest volume of lard production was China (2.6M tonnes), accounting for 39% of total production. Moreover, lard production in China exceeded the figures recorded by the world’s second-largest producer, Germany (653K tonnes), fourfold. The third position in this ranking was occupied by Brazil (481K tonnes), with a 7.4% share.

In China, lard production expanded at an average annual rate of +2.3% over the period from 2012-2018. In the other countries, the average annual rates were as follows: Germany (+0.6% per year) and Brazil (+1.3% per year).

Exports 2007-2018

In 2018, approx. 243K tonnes of lard were exported worldwide; jumping by 9.2% against the previous year. Over the period under review, lard exports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2015 with an increase of 11% y-o-y. The global exports peaked in 2018 and are likely to continue its growth in the near future.

In value terms, lard exports amounted to $220M (IndexBox estimates) in 2018. In general, lard exports continue to indicate a slight setback. The most prominent rate of growth was recorded in 2017 when exports increased by 26% y-o-y. The global exports peaked at $241M in 2012; however, from 2013 to 2018, exports failed to regain their momentum.

Exports by Country

Germany (46K tonnes), Spain (45K tonnes) and Belgium (35K tonnes) represented roughly 52% of total exports of lard in 2018. The U.S. (17K tonnes) ranks next in terms of the total exports with a 6.9% share, followed by the Netherlands (5.7%), Italy (5.3%) and Austria (5%). France (10,645 tonnes), Canada (9,206 tonnes), Denmark (7,849 tonnes), Poland (7,002 tonnes) and Portugal (4,028 tonnes) took a minor share of total exports.

From 2012 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Portugal, while the other global leaders experienced more modest paces of growth.

In value terms, Spain ($57M), Germany ($31M) and Belgium ($23M) appeared to be the countries with the highest levels of exports in 2018, together comprising 50% of global exports. The U.S., Italy, the Netherlands, Canada, Poland, France, Austria, Denmark and Portugal lagged somewhat behind, together accounting for a further 41%.

In terms of the main exporting countries, Portugal experienced the highest rates of growth with regard to exports, over the last six years, while the other global leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average lard export price amounted to $902 per tonne, falling by -4.1% against the previous year. Over the period under review, the lard export price continues to indicate a temperate slump. The most prominent rate of growth was recorded in 2017 when the average export price increased by 15% against the previous year. The global export price peaked at $1,027 per tonne in 2012; however, from 2013 to 2018, export prices failed to regain their momentum.

Prices varied noticeably by the country of origin; the country with the highest price was Poland ($1,359 per tonne), while Austria ($452 per tonne) was amongst the lowest.

From 2012 to 2018, the most notable rate of growth in terms of prices was attained by the U.S., while the other global leaders experienced mixed trends in the export price figures.

Imports 2007-2018

Global imports stood at 223K tonnes in 2018, increasing by 8.2% against the previous year. The total import volume increased at an average annual rate of +1.3% from 2012 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded in certain years. The growth pace was the most rapid in 2015 with an increase of 11% y-o-y. In that year, global lard imports attained their peak of 236K tonnes. From 2016 to 2018, the growth of global lard imports remained at a somewhat lower figure.

In value terms, lard imports totaled $194M (IndexBox estimates) in 2018. In general, lard imports continue to indicate a moderate drop. The pace of growth appeared the most rapid in 2017 with an increase of 11% y-o-y. Over the period under review, global lard imports attained their peak figure at $227M in 2012; however, from 2013 to 2018, imports remained at a lower figure.

Imports by Country

In 2018, Spain (50K tonnes), distantly followed by the Netherlands (26K tonnes), Mexico (20K tonnes), Slovakia (18K tonnes), Denmark (16K tonnes) and France (11K tonnes) were the key importers of lard, together achieving 63% of total imports. Belgium (9,105 tonnes), the UK (7,294 tonnes), Germany (7,042 tonnes), the U.S. (6,910 tonnes), Portugal (6,763 tonnes) and the Philippines (5,311 tonnes) followed a long way behind the leaders.

From 2012 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by the Philippines, while the other global leaders experienced more modest paces of growth.

In value terms, Spain ($41M), Mexico ($22M) and the Netherlands ($18M) were the countries with the highest levels of imports in 2018, with a combined 42% share of global imports. Denmark, Belgium, France, the U.S., the UK, Germany, Slovakia, Portugal and the Philippines lagged somewhat behind, together accounting for a further 35%.

Slovakia experienced the highest growth rate of imports, in terms of the main importing countries over the last six-year period, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average lard import price amounted to $870 per tonne, standing approx. at the previous year. In general, the lard import price continues to indicate a perceptible reduction. The pace of growth appeared the most rapid in 2017 when the average import price increased by 13% y-o-y. Over the period under review, the average import prices for lard attained their peak figure at $1,100 per tonne in 2012; however, from 2013 to 2018, import prices failed to regain their momentum.

Prices varied noticeably by the country of destination; the country with the highest price was the U.S. ($1,157 per tonne), while the Philippines ($131 per tonne) was amongst the lowest.

From 2012 to 2018, the most notable rate of growth in terms of prices was attained by Denmark, while the other global leaders experienced mixed trends in the import price figures.

Source: IndexBox AI Platform

China market

Success in China: Market Opportunities & How to Get Started

Are you an ambitious entrepreneur from the west seeking to expand to China? Or are you interested in opening a new business in China? If yes, this article is for you. We will explain the 5 most viable business openings in China today and the 5 most reliable tips on how to get started in this highly-competitive market. Please be our guest.

Which Viable Market Opportunities Can You Pursue in China?

As the affluent middle class continues to expand in China, solid economic transformations in the country are being realized day by day. The biggest beneficiaries of these transformations are multinational companies who have set up or are planning to open a shop in China. There are now bigger and better market opportunities to pursue, more advanced industries to invest in, and more tech-intensive manufacturing opportunities to consider. As a matter of fact, China now boasts of a 50% bigger manufacturing economy as compared to the USA.

If you are looking to tap into the continued increase in high value-added production, increased globalization of the service sector, as well as the increased outbound investment in China, these 5 market opportunities would be lucrative enough for you:

Healthcare

Rising wealth often comes with an increase in lifestyle diseases. An increase in manufacturing, on the other hand, brings forth many environmental concerns. These two factors have made the healthcare industry very lucrative in China. You will create a reliable cash cow if you could invest in a business that deals with herbal supplements or small health products- or a mainstream pharmaceutical company, so to speak. Also, the use of skincare products is on the rise in China. It’s best to set up a wholly foreign-owned enterprise for such operations.

Import and export trade

China is currently the largest exporter of tech goods and importer of processed foods globally. That means you can build a profitable importing and exporting business here in a heartbeat. 

Supplementary education

Many middle-class Chinese are keen on improving their English and expanding their knowledge of different aspects of business and politics. If you can offer them after-school private tutoring services, you will be making impressive annual returns on a consistent basis. Moreover, online tutorage is on the rise in China, which enables you to tutor more people in a more cost-effective way.Food production

This goes without saying: Everyone needs food, everyone loves good food. And now that the middle-class in China is welcoming new entrants in huge numbers, there is a significant supply gap within this class for as long as the food is concerned. A rise in class obviously comes with a change in lifestyle, and food is at the center of every lifestyle. 

Mobile phones and accessories

The whole world has in the recent past turned to China for all its tech needs. The nation is the largest producer and importer of affordable mobile phones and accessories, meaning that a business in this industry would be extremely profitable.

How to Get Started In China

As lucrative as China could be, many investors from the west talk about it with fear. Some of these foreign entrants tried and failed, or struggled to find their footing in this Asian economic giant. But what would render you unable to compete and survive here? For starters, the business environment here is too unforgiving and the competition too stiff for the faint-hearted. Also, cases of language barriers, cultural differences, and bureaucratic government regulations have led to the peril of many. 

In the middle of all these, how do you defy the odds and succeed in China? Here are 5 actionable tips on how to get started in China:

Don’t just translate your content for China; ensure that everything about your business is localized for China. 

It is important to understand and comply with all business regulations in China. The hiring process can be tricky to a new entrant, which necessitates the services of a Chinese recruitment agency. Such an agency will help you with all employment laws, privileges, and remuneration. 

Ensure that you understand and respect the cultural differences that exist between the west and the east. 

Never underestimate the power of customer opinion in China. Let the customer tell what their experience with your product is, respect their opinion, learn from your mistakes, and ensure that you find lasting solutions to all their concerns. 

As much as possible, try to work with a local partner in order to benefit from the many favors local entrepreneurs get from the government. 

fruits nuts

U.S. – Fruits, Nuts And Peel (Sugar Preserved) – Market Analysis, Forecast, Size, Trends and Insights

IndexBox has just published a new report: ‘U.S. – Fruits, Nuts And Peel (Sugar Preserved) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Exports from the U.S.

In 2018, the amount of fruits, nuts and peel (sugar preserved) exported from the U.S. stood at 5.2K tonnes, shrinking by -7.3% against the previous year. Overall, exports of fruits, nuts and peel (sugar preserved) continue to indicate a slight reduction. The growth pace was the most rapid in 2009 with an increase of 42% y-o-y. Exports peaked at 9.3K tonnes in 2015; however, from 2016 to 2018, exports failed to regain their momentum.

In value terms, exports of fruits, nuts and peel (sugar preserved) totaled $11M (IndexBox estimates) in 2018. Over the period under review, exports of fruits, nuts and peel (sugar preserved) continue to indicate a slight contraction. The most prominent rate of growth was recorded in 2009 with an increase of 76% against the previous year. In that year, exports of fruits, nuts and peel (sugar preserved) reached their peak of $21M. From 2010 to 2018, the growth of exports of fruits, nuts and peel (sugar preserved) failed to regain its momentum.

Exports by Country

Canada (1.8K tonnes) was the main destination for exports of fruits, nuts and peel (sugar preserved) from the U.S., with a 35% share of total exports. Moreover, exports of fruits, nuts and peel (sugar preserved) to Canada exceeded the volume sent to the second major destination, Saudi Arabia (385 tonnes), fivefold. The third position in this ranking was occupied by China (352 tonnes), with a 6.8% share.

From 2007 to 2018, the average annual rate of growth in terms of volume to Canada stood at +16.1%. Exports to the other major destinations recorded the following average annual rates of exports growth: Saudi Arabia (+11.9% per year) and China (+9.2% per year).

In value terms, Canada ($2.7M), China ($1.6M) and Turkey ($888K) constituted the largest markets for sweetened dried fruit and nut exported from the U.S. worldwide, together accounting for 46% of total exports.

Turkey recorded the highest growth rate of exports, among the main countries of destination over the last eleven-year period, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average export price for fruits, nuts and peel (sugar preserved) stood at $2,198 per tonne in 2018, coming down by -1.5% against the previous year. Over the period under review, the export price for fruits, nuts and peel (sugar preserved), however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2009 an increase of 25% year-to-year. In that year, the average export prices for fruits, nuts and peel (sugar preserved) attained their peak level of $2,776 per tonne. From 2010 to 2018, the growth in terms of the average export prices for fruits, nuts and peel (sugar preserved) failed to regain its momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Turkey ($4,656 per tonne), while the average price for exports to Australia ($983 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Taiwan, Chinese, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the imports of fruits, nuts and peel (sugar preserved) into the U.S. totaled 9.4K tonnes, picking up by 22% against the previous year. In general, imports of fruits, nuts and peel (sugar preserved), however, continue to indicate a slight downturn. The pace of growth was the most pronounced in 2018 with an increase of 22% y-o-y. Imports peaked at 12K tonnes in 2010; however, from 2011 to 2018, imports failed to regain their momentum.

In value terms, imports of fruits, nuts and peel (sugar preserved) stood at $32M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +2.3% from 2007 to 2018; however, the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded in certain years. The pace of growth appeared the most rapid in 2010 with an increase of 18% year-to-year. Over the period under review, imports of fruits, nuts and peel (sugar preserved) reached their peak figure in 2018 and are likely to continue its growth in the near future.

Imports by Country

In 2018, Thailand (4.5K tonnes) constituted the largest supplier of sweetened dried fruit and nut to the U.S., with a 48% share of total imports. Moreover, imports of fruits, nuts and peel (sugar preserved) from Thailand exceeded the figures recorded by the second-largest supplier, China (827 tonnes), fivefold. The third position in this ranking was occupied by Fiji (722 tonnes), with a 7.7% share.

From 2007 to 2018, the average annual growth rate of volume from Thailand totaled -1.1%. The remaining supplying countries recorded the following average annual rates of imports growth: China (-1.9% per year) and Fiji (+20.1% per year).

In value terms, Thailand ($14.2M) constituted the largest supplier of sweetened dried fruit and nut to the U.S., comprising 45% of total imports of fruits, nuts and peel (sugar preserved). The second position in the ranking was occupied by Fiji ($3.5M), with a 11% share of total imports. It was followed by China, with a 11% share.

From 2007 to 2018, the average annual growth rate of value from Thailand totaled +3.4%. The remaining supplying countries recorded the following average annual rates of imports growth: Fiji (+23.8% per year) and China (+0.5% per year).

Import Prices by Country

In 2018, the average import price for fruits, nuts and peel (sugar preserved) amounted to $3,379 per tonne, falling by -9.4% against the previous year. Overall, the import price indicated a noticeable increase from 2007 to 2018: its price increased at an average annual rate of +3.5% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, import price for fruits, nuts and peel (sugar preserved) increased by +54.7% against 2009 indices. The pace of growth was the most pronounced in 2013 an increase of 27% year-to-year. Over the period under review, the average import prices for fruits, nuts and peel (sugar preserved) reached their peak figure at $3,729 per tonne in 2017, and then declined slightly in the following year.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Fiji ($4,917 per tonne), while the price for India ($1,887 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Mexico, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

Vietnam

Why Washington Shouldn’t see Vietnam as the Next China

In a recent Senate Finance Committee report, U.S. Trade Czar Robert Lighthizer opined that Vietnam must take action to curb its growing trade surplus with the U.S., including removing barriers to market access for U.S. companies.

While it is true that Vietnam’s trade surplus has grown significantly in 2019, much of it is the result of the trade war between the U.S. and China that has prompted importers to source from Vietnam as an alternative to China.

Rather than attempt to stunt Vietnam’s trade surplus through tariffs or other trade actions, Washington should be establishing alliances with countries in Southeast Asia as part of its quest to ensure balanced trade and market stability.

Lighthizer’scomments were in response to queries from the Committee and echoed previous statements made by White House administration officials who have identified Vietnam as one of several countries to watch with respect to trade activity. And while there hasn’t been a direct threat of imposing tariffs on Vietnamese imports, the recent implementation of a 400% duty on Vietnamese steel imports and the recent rhetoric in Washington regarding transshipment has many businesses nervous that their new safe haven may be the President’s next target for trade action.

Troublesome to United State Trade Representative (USTR) is that the surplus thus far in 2019 is already more than 30% higher than it was at this time last year, making Vietnam the leading nation in terms of percentage increase of import value in 2019.

Hastening trade imbalance

Washington has been at least somewhat complicit in hastening Vietnam’s growing trade surplus. Since the U.S. began imposing tariffs on China-origin goods, many U.S. companies (and some Chinese companies) have been looking to shift production to neighboring markets in Asia. A recent poll of U.S. companies by the U.S. Chamber of Commerce in China showed that more than 40% of American companies with production in China were looking to move to a neighboring country if they hadn’t already done so. These include the likes of Dell, HP, Steve Madden, Brooks and others. Even non-U.S. companies, like Japan’s Nintendo and China’s own electronics giant TCL are looking to shift production out of China and into Vietnam.

Vietnam was an obvious choice for many of these manufacturers looking to circumvent Washington’s onerous tariffs. For years, Vietnam has been investing heavily in improving its roadway and port infrastructure, as well as augmenting its pool of high-skilled laborers so that it can attract large hi-tech giants. The advancements were well-timed to coincide with increasing wages and regulatory restrictions in China that were driving up costs and forcing foreign producers to look elsewhere for low-cost manufacturing alternatives. This was taking place well before the current administration in Washington began cracking down on China’s questionable trade practices.

To be fair, Washington does have some cause for complaint. It’s one of Asia’s worst kept secrets that Vietnam, Malaysia and Thailand have become convenient transshipment hubs for Chinese companies looking to circumvent quotas and, more recently, tariffs by making minor tweaks in neighboring countries to products almost wholly manufactured in China and sending them along to the U.S. as “Vietnamese” or “Malaysian” exports. In the end, there is little monetary gain for Vietnam and much opportunity for reputational damage. Hanoi’s incentive for playing along is purely political; it wants to placate China, its much larger neighbor and regional hegemon.

Hanoi has already said it will crackdown on Chinese transshipments labeled as being of Vietnamese origin. Nikkei Asian Review is reporting the Vietnamese government is considering new rules that would require 30% of a good’s price to be comprised of Vietnamese manufacturing for it to be considered as being of Vietnamese origin. Whether or not this will pacify the USTR remains to be seen.

Yet while Chinese transshipments may have been a catalyst to Vietnam’s soaring trade surplus, the ongoing U.S-China trade war has unquestionably accelerated the development of a trend that was only in its infancy a few short years ago.

If Washington is looking to penalize Vietnam for a trade surplus born out of Washington’s trade war with Beijing, where will the cycle of tariffs end?

Options for low-cost sourcing plentiful

Let’s assume Washington succeeds in quelling the growth of Vietnam’s trade surplus by imposing tariffs in the same manner it has with China, the EU and other entities. The likely outcome will be that U.S. companies then look to Thailand, Myanmar, Bangladesh or Cambodia (as many have already) to replace or supplement their production in China.

Let’s assume that Washington then imposes similar tariffs on imports from those countries. The likely outcome will be that U.S. companies then shift their attention to India, Mexico or any other country that offer lower cost labor and limited regulatory burden. And on and on it goes.

Washington wants to see production repatriated back to the United States, but only six percent of American companies moving production out of China are looking at reshoring their manufacturing facilities. One of the key reasons is that the facilities currently in China are intended to support regional exports and reshoring production to the U.S. would result in unnecessary transport costs and time in transit. In other cases, the cost of moving production to the U.S. could be too onerous to allow companies to compete globally.

A battle worth waging – along with friends and allies

This is not to suggest Washington’s war on China’s unsavory trade practices is unjust or futile. On the contrary, China’s history of misappropriating intellectual property through technology transfer, cybersecurity incidents and other trade violations requires America to act. But tariffs only punish American companies that will continue to shift their production as necessary to reduce their landed costs.

Instead of reprimanding and punishing countries like Vietnam with tariffs in response to growing trade surpluses, Washington should be working with them to forge alliances that will ensure China is forced to play by the rules.

If the U.S. truly wants to stave off bad actors such as China from continuing to abuse the global trade’s rule-based system, it will need the support of friends and allies in the eastern and western hemispheres. Acting alone and imposing unilateral restrictions only throws Washington into a battle of wills for which collateral damage is certain, but the outcome remains unknown.

_________________________________________________________________

Cora Di Pietro is vice president of Global Trade Consulting at trade-services firm Livingston International. She is a frequent speaker and lecturer at industry and academic events and is an active member of numerous industry groups and associations. She can be reached at cdipietro@livingstonintl.com.

grapefruit

Grapefruit Market in Asia – Japan Halved Grapefruit Imports Over the Last Decade

IndexBox has just published a new report: ‘Asia – Grapefruits (Inc. Pomelos) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the grapefruit market in Asia amounted to $6.4B in 2018, picking up by 6.1% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). In general, grapefruit consumption continues to indicate strong growth. The pace of growth appeared the most rapid in 2015 when the market value increased by 18% y-o-y. Over the period under review, the grapefruit market reached its maximum level in 2018 and is expected to retain its growth in the near future.

Consumption By Country in Asia

China (4.8M tonnes) remains the largest grapefruit consuming country in Asia, comprising approx. 72% of total consumption. Moreover, grapefruit consumption in China exceeded the figures recorded by the region’s second-largest consumer, Viet Nam (611K tonnes), eightfold. India (377K tonnes) ranked third in terms of total consumption with a 5.6% share.

In China, grapefruit consumption increased at an average annual rate of +7.5% over the period from 2007-2018. In the other countries, the average annual rates were as follows: Viet Nam (+5.5% per year) and India (+7.1% per year).

In value terms, China ($4.5B) led the market, alone. The second position in the ranking was occupied by Viet Nam ($707M). It was followed by Thailand.

The countries with the highest levels of grapefruit per capita consumption in 2018 were Viet Nam (6,331 kg per 1000 persons), China (3,340 kg per 1000 persons) and Thailand (3,267 kg per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of grapefruit per capita consumption, amongst the main consuming countries, was attained by China, while the other leaders experienced more modest paces of growth.

Market Forecast 2019-2025 in Asia

Driven by increasing demand for grapefruit in Asia, the market is expected to continue an upward consumption trend over the next seven years. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +3.7% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 8.7M tonnes by the end of 2025.

Production in Asia

The grapefruit production stood at 7M tonnes in 2018, growing by 6.4% against the previous year. The total output indicated a remarkable increase from 2007 to 2018: its volume increased at an average annual rate of +5.6% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, grapefruit production increased by +81.9% against 2007 indices. The pace of growth appeared the most rapid in 2015 when production volume increased by 12% y-o-y. Over the period under review, grapefruit production reached its maximum volume in 2018 and is expected to retain its growth in the immediate term. The general positive trend in terms of grapefruit output was largely conditioned by a resilient increase of the harvested area and temperate growth in yield figures.

In value terms, grapefruit production stood at $6.9B in 2018 estimated in export prices. Overall, grapefruit production continues to indicate a strong increase. The growth pace was the most rapid in 2015 when production volume increased by 18% against the previous year. The level of grapefruit production peaked in 2018 and is expected to retain its growth in the immediate term.

Production By Country in Asia

The country with the largest volume of grapefruit production was China (5M tonnes), accounting for 71% of total production. Moreover, grapefruit production in China exceeded the figures recorded by the region’s second-largest producer, Viet Nam (598K tonnes), eightfold. The third position in this ranking was occupied by India (377K tonnes), with a 5.4% share.

From 2007 to 2018, the average annual rate of growth in terms of volume in China amounted to +7.5%. In the other countries, the average annual rates were as follows: Viet Nam (+5.3% per year) and India (+7.1% per year).

Harvested Area in Asia

In 2018, the total area harvested in terms of grapefruits production in Asia stood at 220K ha, going up by 3.7% against the previous year. The harvested area increased at an average annual rate of +2.8% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2015 with an increase of 18% year-to-year. The level of grapefruit harvested area peaked at 226K ha in 2016; however, from 2017 to 2018, harvested area stood at a somewhat lower figure.

Yield in Asia

The average grapefruit yield amounted to 32 tonne per ha in 2018, jumping by 2.6% against the previous year. The yield figure increased at an average annual rate of +2.7% over the period from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations in certain years. The most prominent rate of growth was recorded in 2017 when yield increased by 9.6% against the previous year. The level of grapefruit yield peaked in 2018 and is expected to retain its growth in the immediate term.

Exports in Asia

In 2018, the amount of grapefruits exported in Asia amounted to 525K tonnes, jumping by 21% against the previous year. The total export volume increased at an average annual rate of +5.6% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2008 when exports increased by 23% year-to-year. Over the period under review, grapefruit exports reached their maximum in 2018 and are likely to see steady growth in the near future.

In value terms, grapefruit exports totaled $449M (IndexBox estimates) in 2018. The total exports indicated a strong expansion from 2007 to 2018: its value increased at an average annual rate of +5.6% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, grapefruit exports increased by +15.7% against 2014 indices. The pace of growth was the most pronounced in 2008 with an increase of 21% y-o-y. Over the period under review, grapefruit exports reached their maximum in 2018 and are likely to continue its growth in the immediate term.

Exports by Country

In 2018, China (211K tonnes) and Turkey (182K tonnes) were the major exporters of grapefruits in Asia, together recording near 75% of total exports. It was distantly followed by Israel (88K tonnes), achieving a 17% share of total exports. China, Hong Kong SAR (16K tonnes) and Cyprus (8.3K tonnes) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by China, Hong Kong SAR, while the other leaders experienced more modest paces of growth.

In value terms, the largest grapefruit markets in Asia were China ($200M), Turkey ($119M) and Israel ($87M), with a combined 91% share of total exports. These countries were followed by China, Hong Kong SAR and Cyprus, which together accounted for a further 4%.

Among the main exporting countries, China, Hong Kong SAR recorded the highest rates of growth with regard to exports, over the last eleven years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The grapefruit export price in Asia stood at $855 per tonne in 2018, waning by -3.7% against the previous year. Over the last eleven years, it increased at an average annual rate of +1.2%. The most prominent rate of growth was recorded in 2017 when the export price increased by 10% y-o-y. In that year, the export prices for grapefruits attained their peak level of $888 per tonne, and then declined slightly in the following year.

Prices varied noticeably by the country of origin; the country with the highest price was Israel ($995 per tonne), while Cyprus ($585 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by China, Hong Kong SAR, while the other leaders experienced more modest paces of growth.

Imports in Asia

In 2018, the amount of grapefruits imported in Asia totaled 272K tonnes, surging by 24% against the previous year. In general, grapefruit imports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 when imports increased by 24% y-o-y. Over the period under review, grapefruit imports reached their maximum at 280K tonnes in 2010; however, from 2011 to 2018, imports failed to regain their momentum.

In value terms, grapefruit imports amounted to $232M (IndexBox estimates) in 2018. Over the period under review, grapefruit imports, however, continue to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2014 when imports increased by 15% y-o-y. The level of imports peaked at $236M in 2007; however, from 2008 to 2018, imports remained at a lower figure.

Imports by Country

In 2018, Japan (85K tonnes), distantly followed by China (45K tonnes), Saudi Arabia (34K tonnes), South Korea (23K tonnes), China, Hong Kong SAR (23K tonnes) and Viet Nam (15K tonnes) were the largest importers of grapefruits, together comprising 83% of total imports. Iraq (11K tonnes) followed a long way behind the leaders.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Viet Nam (+115.4% per year), while the other leaders experienced more modest paces of growth.

In value terms, Japan ($64M), China ($60M) and South Korea ($32M) were the countries with the highest levels of imports in 2018, with a combined 67% share of total imports. China, Hong Kong SAR, Saudi Arabia, Viet Nam and Iraq lagged somewhat behind, together accounting for a further 21%.

Viet Nam (+99.6% per year) experienced the highest rates of growth with regard to imports, in terms of the main importing countries over the last eleven-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The grapefruit import price in Asia stood at $853 per tonne in 2018, dropping by -8.6% against the previous year. Overall, the grapefruit import price, however, continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2017 when the import price increased by 12% against the previous year. In that year, the import prices for grapefruits reached their peak level of $933 per tonne, and then declined slightly in the following year.

Prices varied noticeably by the country of destination; the country with the highest price was South Korea ($1,420 per tonne), while Iraq ($323 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by China, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

ocean

A Tough Year on the Water Hasn’t Dampened Innovation for these Ocean Carriers

To say that 2019 has been challenging for ocean carriers would be an understatement. The year began with the National Retail Federation forecasting a decline in year-over-year growth, echoing World Bank chatter of a slowing global economy.

And don’t forget the tariff wars between the U.S. and China (heck, the U.S. and just about anyone). Managing capacity on ships has also been an issue, and then there is the potential biggest bogeyman of all: the International Maritime Organization’s low-sulfur fuel mandate taking effect Jan. 1, 2020.

Sure, we could dwell on the gloom and doom, but that would not be very Global Trade magazine of us, now would it? We here in our silky ivory tower like to spotlight the positive, which we reveal with these ocean shippers we love.

MSC

Mediterranean Shipping Co. this year watched the world’s largest container ship, the MSC Gülsün, complete its maiden voyage from northern China to Europe. With a width of 197 feet and a length of 1,312 feet (!), the Gülsün was built by Samsung Heavy Industries at the Geoje shipyard in South Korea. It can carry up to 23,756 TEUs shipping containers on one haul. That capacity can include 2,000 refrigerated containers for shipping food, beverages, pharmaceuticals or any other chilled and frozen cargoes. That’s a lot of snow cones!

MOL

Mitsui O.S.K. Lines sees MSC Gülsün and raises you the MOL Triumph, which achieved a new world load record this year. Departing Singapore for Northern Europe on THE Alliance’s FE2 service with a cargo of 19,190 TEU. That surpassed the previous load record achieved in August 2018, when Mumbai Maersk sailed from Tanjung Pelepas to Rotterdam with 19,038 TEU onboard. Yes, you are correct, that’s a pretty slim margin of victory, and analysts suspect the MOL Triumph record won’t last long given the 23,000 TEU ships being introduced.

HYUNDAI MERCHANT MARINE 

Speaking of THE Alliance, current members Hapag-Lloyd, ONE and Yang Ming will be joined in April 2020 by Hyundai Merchant Marine (HMM). The South Korean carrier recently signed an agreement to join THE Alliance and then passed the pen to the founding members, who extended the duration of their collaboration until 2030. “HMM is a great fit for THE Alliance as it will provide a number of new and modern vessels, which will help us to deliver better quality and be more efficient,” said Rolf Habben Jansen, Hapag-Lloyd’s chief executive. 

HAPAG-LLOYD

Oh, speaking of the fifth-largest container shipping company in the world, Hapag-Lloyd is piloting an online insurance product as part of a digital offering to try to overcome the widespread practice of shippers relying on the limited cover provided under the terms of carriers’ bills of lading. While Hapag-Lloyd says it takes the utmost care in transporting cargo, company officials acknowledge things can and have gone wrong. Thus, the introduction of Quick Cargo Insurance, which is underwritten by industrial insurer Chubb in Germany and is limited to containerized exports from that country, France and the Netherlands. However, the carrier says it plans to expand the offer.  

MAERSK

To navigate new environmental regulations, A.P. Moller-Maersk A/S is considering going old school. We mean really old school by using a modern version of the old-fashioned sail to help power its ships. Currently being tested on one of Maersk’s giant tankers, the sails look less like the flapping silk you know from Johnny Depp movies and Jerry Seinfeld’s puffy shirt and more like huge marble columns. But they are nothing to laugh at as two 10-story-tall cylinders can harness enough wind to replace 20 percent of the ship’s fossil fuels, according to their maker, Norsepower Oy Ltd. 

MOL, THE SEQUEL

While we’re getting all green up in here, it’s worth also pointing out that Mitsui O.S.K. Lines Ltd. This year joined three other Japanese companies— Asahi Tanker Co., Exeno Yamamizu Corp., and Mitsubishi Corp.—in teaming up to build the world’s first zero-emission tanker by mid-2021. Their joint venture e5 Lab Inc. will power the vessel with large-capacity batteries and operate in Tokyo Bay, according to a statement the foursome released on Aug. 6. Thanks to the onslaught of legislation to improve environmental performance, other companies are also looking to battery power. Norway’s Kongsberg Gruppen is developing an electric container vessel, and Rolls-Royce Holdings last year that started offering battery-powered ship engines.

AMAZON

No, this is not a leftover strand from a different story in this magazine about moving packages on the ground. “Quietly and below the radar,” USA Today recently reported, “Amazon has been ramping up its ocean shipping service, sending close to 4.7 million cartons of consumers goods from China to the United States over the past year, records show.” While other ocean carrier leaders prepare for the bald head of Jeff Bezos, his move really should be no surprise given Amazon’s attempt to control as much of its transportation network as possible. (See my September-October issue story “Air War: Fast, Free Shipping has UPS, FedEx and Amazon Scrambling in the Air”). Of Amazon now floating into the sea, Steve Ferreira, CEO of Ocean Audit, a company that utilizes data and machine learning to find ocean freight refunds for the Fortune 500, told USA Today: “This makes them the only e-commerce company that is able to do the whole transaction from end-to-end. Amazon now has a closed ecosystem.” 

Goods

Is Your Supply Chain Prepared for Potential U.S. Tariffs on EU Goods?

Transatlantic tariffs came closer to reality in recent months after the United States Trade Representative (USTR) proposed tariffs on a list of products from the European Union (EU). 

Unfortunately, even if you’ve already gone through something similar with goods imported from China, the same strategy may not be effective for the tariffs on EU goods. This is due in large part to the types of proposed commodities from the EU.

The good news is there are things you can do today to adjust your import strategy to maintain compliance while insulating your company from the proposed tariffs.

Up to $25 billion worth of EU goods at stake

The USTR announcements in April and July proposed tariffs targeting up to $25 billion worth of goods. This includes items such as new aircraft and aircraft parts, foods ranging from seafood and meat to cheese and pasta, wine and whiskey, and even ceramics and cleaning chemicals. 

To date, the USTR has only provided a preliminary commodity list for the proposed U.S. tariffs on EU goods. No percentages have been announced, leaving many to wonder if the tariffs will be manageable—in the 5-10% range—or more substantial, like the 25% tariffs applied to China imports. 

On top of the tariffs, when the French Senate announced a 3% tax on revenue from digital services earned in France, President Trump threatened a counter-tax on French wine. But it’s unclear if this tax will come to fruition or fizzle out—especially since the USTR’s tariff list already includes many types of wine. 

5 key questions to insulate your supply chain

Looking for the best way to prepare your business from the potential tariff increases? Answering these key questions may help you adapt and insulate your company. 

-Do you have a plan to cover the costs? 

You may not be able to avoid paying the tariffs, but there are various strategies you may consider to help cover their costs. 

While not ideal, you could increase prices to end consumers. It may not be feasible to recover the entire cost of an added tariff, but you can at least offset a small portion of the tariff this way.

You can also adjust the cost of the goods with suppliers and manufacturers to cover a portion of the tariff. Just remember: pricing changes still need to meet the valuation regulations with U.S. Customs and Border Protection (CBP). 

-Will you need to increase your customs bond? 

The smallest customs bond an importer can hold is $50,000. That used to be enough for many importers to cover generally 10% of the duties and taxes you expect to pay CBP. 

Unfortunately, as many importers from China are learning, a 25% tariff on products can quickly exceed your bond amount. And bond insufficiency can shut down all your imports while resulting in delays and added expenses. 

To help avoid bond insufficiency, consider any increased duty amounts in advance of your next bond renewal period. And don’t wait to do this until the last minute, because raising your customs bond with your surety company can take up to four weeks. 

-Do you re-export goods brought into the U.S.? 

Duty drawback programs can’t be used by every importer. But if you can take advantage of them, they can result in big savings for your company.

In fact, you can get back 99% of certain import duties, taxes, and fees on imported goods that you re-export out of the U.S. Just be aware that you still need to pay the duties up front. And you might need to wait up to two years to get your refund. 

-Are your product classifications current and accurate?

With potential tariffs looming, consider reviewing your product classifications and make sure they’re accurate. If you find an issue, discuss it with your broker or customs counsel to discuss how you can properly rectify the issue, and avoid penalties from doing it incorrectly.

And while we’re on the topic of product classifications, never change them to evade tariffs. CBP will be on the lookout for this kind of activity, and the penalties for noncompliance can be steep.

-Do you have the support you need?

Changing your customs brokers may not sound appealing, but ensuring they provide all the services you need to stay compliant should be your top priority when working with them.

Your provider should help make sure you pay the appropriate duty rates for your products. And they should have people and services available globally to support your freight wherever it is located throughout the world. 

Also, consider simplifying your support by working with one provider that offers not only customs brokerage and trade compliance services but also global ocean and air freight logistics services. 

If you only employ one strategy…

Discuss your import strategy with your customs attorney or customs compliance expert. Bringing in specialized expertise is the most effective way to analyze how these tariffs could affect your products, your supply chain, and your business. 

If you don’t yet have a customs broker who can meet all your needs in today’s changing environment, consider C.H. Robinson’s customs compliance services. With over 100 licensed customs brokers in North America, and a Trusted Advisor® approach, our experts are ready to help.

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Ben Bidwell serves as the Director of U.S. Customs at  C.H. Robinson