New Articles

European Fresh Cheese Market – Italy’s Output Doubled Over the Last Five Years

cheese

European Fresh Cheese Market – Italy’s Output Doubled Over the Last Five Years

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

The revenue of the fresh cheese market in the European Union amounted to $12.6B in 2018, remaining stable 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, fresh cheese consumption continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 with an increase of 15% against the previous year. Over the period under review, the fresh cheese market attained its maximum level at $14B in 2008; however, from 2009 to 2018, consumption remained at a lower figure.

Consumption By Country in the EU

The countries with the highest volumes of fresh cheese consumption in 2018 were Italy (967K tonnes), France (585K tonnes) and Germany (548K tonnes), together accounting for 52% of total consumption. These countries were followed by the UK, Poland, Spain, Belgium, the Netherlands, the Czech Republic and Sweden, which together accounted for a further 37%.

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

In value terms, Italy ($3.8B) led the market, alone. The second position in the ranking was occupied by the UK ($1.7B). It was followed by France.

The countries with the highest levels of fresh cheese per capita consumption in 2018 were Italy (16,290 kg per 1000 persons), Belgium (13,307 kg per 1000 persons) and Poland (10,450 kg per 1000 persons).

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

Market Forecast 2019-2025 in the EU

Driven by increasing demand for fresh cheese in the European Union, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +0.7% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 4.3M tonnes by the end of 2025.

Production in the EU

In 2018, approx. 4.4M tonnes of fresh cheese were produced in the European Union; going up by 1.6% against the previous year. The total output volume increased at an average annual rate of +2.1% over the period from 2007 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2017 when production volume increased by 11% y-o-y. Over the period under review, fresh cheese production attained its peak figure volume in 2018 and is likely to see steady growth in the immediate term.

In value terms, fresh cheese production amounted to $11.2B in 2018 estimated in export prices. Over the period under review, fresh cheese production continues to indicate a mild shrinkage. The pace of growth was the most pronounced in 2014 with an increase of 15% y-o-y. Over the period under review, fresh cheese production attained its peak figure level at $14.3B in 2008; however, from 2009 to 2018, production remained at a lower figure.

Production By Country in the EU

The countries with the highest volumes of fresh cheese production in 2018 were Germany (928K tonnes), Italy (927K tonnes) and France (688K tonnes), with a combined 58% share of total production. Poland, the UK, Denmark, Belgium, Spain and Lithuania lagged somewhat behind, together accounting for a further 32%.

From 2007 to 2018, the most notable rate of growth in terms of fresh cheese production, amongst the main producing countries, was attained by Belgium, while the other leaders experienced more modest paces of growth.

Exports in the EU

In 2018, the fresh cheese exports in the European Union totaled 1.6M tonnes, growing by 2.1% against the previous year. The total exports indicated resilient growth from 2007 to 2018: its volume increased at an average annual rate of +6.1% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fresh cheese exports increased by +91.0% against 2007 indices. The most prominent rate of growth was recorded in 2011 with an increase of 11% against the previous year. Over the period under review, fresh cheese exports attained their maximum in 2018 and are expected to retain its growth in the immediate term.

In value terms, fresh cheese exports amounted to $5.6B (IndexBox estimates) in 2018. The total exports indicated remarkable growth from 2007 to 2018: its value increased at an average annual rate of +6.1% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fresh cheese exports increased by +30.3% against 2015 indices. The most prominent rate of growth was recorded in 2011 when exports increased by 23% y-o-y. Over the period under review, fresh cheese exports reached their peak figure in 2018 and are likely to see steady growth in the immediate term.

Exports by Country

Germany was the largest exporting country with an export of about 516K tonnes, which resulted at 32% of total exports. It was distantly followed by France (221K tonnes), Denmark (183K tonnes), Italy (181K tonnes), Poland (96K tonnes) and Belgium (86K tonnes), together achieving a 48% share of total exports. The UK (67K tonnes) followed a long way behind the leaders.

Exports from Germany increased at an average annual rate of +5.5% from 2007 to 2018. At the same time, Belgium (+15.3%), Poland (+7.9%), Italy (+6.9%), Denmark (+6.4%), the UK (+5.9%) and France (+2.2%) displayed positive paces of growth. Moreover, Belgium emerged as the fastest-growing exporter in the European Union, with a CAGR of +15.3% from 2007-2018. From 2007 to 2018, the share of Germany, Italy, Denmark, Belgium, Poland, France and the UK increased by +14%, +5.9%, +5.7%, +4.3%, +3.4%, +3% and +2% percentage points, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the largest fresh cheese markets in the European Union were Germany ($1.6B), Italy ($964M) and Denmark ($638M), with a combined 58% share of total exports. France, Belgium, Poland and the UK lagged somewhat behind, together comprising a further 25%.

In terms of the main exporting countries, Belgium experienced 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 fresh cheese export price in the European Union stood at $3,504 per tonne in 2018, picking up by 2.4% against the previous year. In general, the fresh cheese export price, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2008 an increase of 18% y-o-y. In that year, the export prices for fresh cheese reached their peak level of $4,179 per tonne. From 2009 to 2018, the growth in terms of the export prices for fresh cheese failed to regain its momentum.

There were significant differences in the average prices amongst the major exporting countries. In 2018, the country with the highest price was Italy ($5,330 per tonne), while France ($2,660 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Poland, while the other leaders experienced mixed trends in the export price figures.

Imports in the EU

In 2018, the amount of fresh cheese imported in the European Union stood at 1.3M tonnes, increasing by 5.4% against the previous year. The total imports indicated remarkable growth from 2007 to 2018: its volume increased at an average annual rate of +5.3% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fresh cheese imports increased by +76.1% against 2007 indices. The growth pace was the most rapid in 2011 with an increase of 10% against the previous year. The volume of imports peaked in 2018 and are likely to see steady growth in the immediate term.

In value terms, fresh cheese imports amounted to $4.4B (IndexBox estimates) in 2018. The total imports indicated a strong increase from 2007 to 2018: its value increased at an average annual rate of +5.3% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fresh cheese imports increased by +29.3% against 2016 indices. The pace of growth appeared the most rapid in 2011 with an increase of 21% year-to-year. The level of imports peaked in 2018 and are likely to see steady growth in the near future.

Imports by Country

The countries with the highest levels of fresh cheese imports in 2018 were Italy (221K tonnes), the UK (189K tonnes), Germany (137K tonnes), the Netherlands (127K tonnes), France (118K tonnes), Spain (95K tonnes) and Belgium (77K tonnes), together resulting at 74% of total import. Austria (39K tonnes), Poland (33K tonnes), Romania (33K tonnes), the Czech Republic (26K tonnes) and Ireland (25K 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 Ireland, while the other leaders experienced more modest paces of growth.

In value terms, the largest fresh cheese importing markets in the European Union were Italy ($778M), the UK ($573M) and Germany ($507M), with a combined 42% share of total imports. France, the Netherlands, Spain, Belgium, Austria, Poland, Romania, Ireland and the Czech Republic lagged somewhat behind, together comprising a further 44%.

In terms of the main importing countries, Poland experienced the highest rates of growth with regard to imports, over the last eleven years, while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the fresh cheese import price in the European Union amounted to $3,409 per tonne, rising by 3.7% against the previous year. Overall, the fresh cheese import price continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2008 an increase of 17% against the previous year. In that year, the import prices for fresh cheese attained their peak level of $3,996 per tonne. From 2009 to 2018, the growth in terms of the import prices for fresh cheese failed to regain its momentum.

Average prices varied somewhat amongst the major importing countries. In 2018, major importing countries recorded the following prices: in France ($3,885 per tonne) and Austria ($3,750 per tonne), while the Netherlands ($2,750 per tonne) and the UK ($3,029 per tonne) were amongst the lowest.

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

Source: IndexBox AI Platform

pulp

U.S. Pulp Market – Exports to China Fell 9.4% in 2018, U.S Companies Lost $78M

IndexBox has just published a new report: ‘U.S. Pulp Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The revenue of the pulp market in the U.S. amounted to $4.8B in 2018, going up by 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 +2.5% from 2013 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations throughout the analyzed period. The pace of growth was the most pronounced in 2014 with an increase of 19% against the previous year. In that year, the pulp market attained its peak level of $5.1B. From 2015 to 2018, the growth of the pulp market remained at a lower figure.

Pulp Production in the U.S.

In value terms, pulp production totaled $7.2B in 2018. Overall, pulp production, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2014 with an increase of 8.9% year-to-year. In that year, pulp production reached its peak level of $7.7B. From 2015 to 2018, pulp production growth failed to regain its momentum.

Exports from the U.S.

In 2018, approx. 6M tonnes of pulp were exported from the U.S.; going down by -4.7% against the previous year. Over the period under review, pulp exports continue to indicate a mild shrinkage. The growth pace was the most rapid in 2015 with an increase of 3.1% against the previous year. Exports peaked at 6.4M tonnes in 2013; however, from 2014 to 2018, exports remained at a lower figure.

In value terms, pulp exports amounted to $4.5B (IndexBox estimates) in 2018. The total export value increased at an average annual rate of +1.7% from 2013 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being observed over the period under review. The growth pace was the most rapid in 2018 when exports increased by 11% against the previous year. In that year, pulp exports reached their peak and are likely to continue its growth in the immediate term.

Exports by Country

China (1.6M tonnes) was the main destination for pulp exports from the U.S., with a 26% share of total exports. Moreover, pulp exports to China exceeded the volume sent to the second major destination, Japan (479K tonnes), threefold. The third position in this ranking was occupied by Italy (391K tonnes), with a 6.6% share.

From 2013 to 2018, the average annual rate of growth in terms of volume to China stood at -3.2%. Exports to the other major destinations recorded the following average annual rates of exports growth: Japan (+3.1% per year) and Italy (-3.4% per year).

In value terms, China ($1.2B) remains the key foreign market for pulp exports from the U.S., comprising 26% of total pulp exports. The second position in the ranking was occupied by Japan ($410M), with a 9.1% share of total exports. It was followed by Italy, with a 6.3% share.

From 2013 to 2018, the average annual growth rate of value to China amounted to +1.0%. Exports to the other major destinations recorded the following average annual rates of exports growth: Japan (+6.9% per year) and Italy (-1.5% per year).

Export Prices by Country

In 2018, the average pulp export price amounted to $759 per tonne, going up by 16% against the previous year. Over the period from 2013 to 2018, it increased at an average annual rate of +3.1%. The growth pace was the most rapid in 2018 an increase of 16% against the previous year. In that year, the average export prices for pulp reached their peak level and is likely to continue its growth in the immediate term.

Prices varied noticeably by the country of destination; the country with the highest price was Japan ($855 per tonne), while the average price for exports to Germany ($554 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to South Korea, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the amount of pulp imported into the U.S. totaled 2.5M tonnes, increasing by 4.2% against the previous year. The total import volume increased at an average annual rate of +3.5% from 2013 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded in certain years. The pace of growth appeared the most rapid in 2018 when imports increased by 4.2% year-to-year. In that year, pulp imports reached their peak and are likely to continue its growth in the immediate term.

In value terms, pulp imports totaled $1.5B (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +4.8% over the period from 2013 to 2018; the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2018 with an increase of 23% year-to-year. In that year, pulp imports attained their peak and are likely to continue its growth in the immediate term.

Imports by Country

In 2018, Brazil (2.1M tonnes) constituted the largest pulp supplier to the U.S., accounting for a 85% share of total imports. Moreover, pulp imports from Brazil exceeded the figures recorded by the second-largest supplier, Chile (248K tonnes), ninefold.

From 2013 to 2018, the average annual rate of growth in terms of volume from Brazil amounted to +1.7%. The remaining supplying countries recorded the following average annual rates of imports growth: Chile (+20.8% per year) and Sweden (+19.7% per year).

In value terms, Brazil ($1.4B) constituted the largest supplier of pulp to the U.S., comprising 90% of total pulp imports. The second position in the ranking was occupied by Chile ($75M), with a 4.8% share of total imports.

From 2013 to 2018, the average annual growth rate of value from Brazil totaled +4.0%. The remaining supplying countries recorded the following average annual rates of imports growth: Chile (+16.9% per year) and Sweden (+14.9% per year).

Import Prices by Country

The average pulp import price stood at $619 per tonne in 2018, growing by 18% against the previous year. Over the period from 2013 to 2018, it increased at an average annual rate of +1.2%. The pace of growth appeared the most rapid in 2018 an increase of 18% y-o-y. In that year, the average import prices for pulp reached their peak level and is likely to continue its growth in the immediate term.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Brazil ($655 per tonne), while the price for Chile ($300 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Brazil, while the prices for the other major suppliers experienced a decline.

Companies Mentioned in the Report

Profile Products, Domtar Industries, Georgia-Pacific Brewton, Woodland Pulp, Cascade Pacific Pulp, Northwest Capital Appreciation, Forest Resolute Products, American Paper Recycling, Cascades Tissue Group-Oregon, A Division of Cascades Holding US, Parsons & Whittemore, St Paper, Alabama River Cellulose, Buckeye Technologies, Brunswick Cellulose, Parsons & Whittemore Enterprises, Fibrek Inc., Port Townsend Holdings Company, Buckeye Mt. Holly, Lest Distributors, Southern Cellulose Products, DOMTAR A.W., Alabama River Group, GP Cellulose, Buckeye Florida Limited Partnership, Pratt Paper (ny), Fibrek Recycling U.S. , Cosmo Specialty Fibers, Ox Paperboard

Source: IndexBox AI Platform

global pepper

Global Pepper Market Is Expected to Reach 840K Tonnes by 2025

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

The global pepper market revenue in 2018 is estimated at $4.1B, a decrease of -1.7% y-o-y. 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, pepper consumption continues to indicate a strong expansion. The most prominent rate of growth was recorded in 2011 when the market value increased by 26% against the previous year. The global pepper consumption peaked at $4.2B in 2017, and then declined slightly in the following year.

Consumption By Country

The countries with the highest volumes of pepper consumption in 2018 were Viet Nam (166K tonnes), India (86K tonnes) and the U.S. (68K tonnes), with a combined 41% share of global consumption. These countries were followed by Bulgaria, Indonesia, China, Singapore, Malaysia, Sri Lanka, Germany, the United Arab Emirates and the UK, which together accounted for a further 33%.

In value terms, Viet Nam ($904M), India ($506M) and the U.S. ($374M) constituted the countries with the highest levels of market value in 2018, with a combined 43% share of the global market. These countries were followed by Indonesia, Singapore, China, Malaysia, Bulgaria, Sri Lanka, the United Arab Emirates, Germany and the UK, which together accounted for a further 33%.

The countries with the highest levels of pepper per capita consumption in 2018 were Bulgaria (7,641 kg per 1000 persons), Singapore (5,288 kg per 1000 persons) and Viet Nam (1,724 kg per 1000 persons).

Market Forecast 2019-2025

Driven by increasing demand for pepper worldwide, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +1.2% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 840K tonnes by the end of 2025.

Production 2007-2018

In 2018, the amount of pepper produced worldwide stood at 752K tonnes, jumping by 5.1% against the previous year. In general, the total output indicated a conspicuous expansion from 2007 to 2018: its volume increased at an average annual rate of +3.2% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, pepper production increased by +55.4% against 2012 indices. The pace of growth was the most pronounced in 2016 with an increase of 11% against the previous year. Over the period under review, global pepper production reached its maximum volume in 2018 and is likely to continue its growth in the immediate term. The general positive trend in terms of pepper output was largely conditioned by a tangible increase of the harvested area and a resilient expansion in yield figures.

In value terms, pepper production totaled $3.8B in 2018 estimated in export prices. Over the period under review, pepper production continues to indicate a remarkable increase. The pace of growth appeared the most rapid in 2011 when production volume increased by 47% against the previous year. The global pepper production peaked at $4.6B in 2016; however, from 2017 to 2018, production remained at a lower figure.

Production By Country

The country with the largest volume of pepper production was Viet Nam (273K tonnes), comprising approx. 36% of total production. Moreover, pepper production in Viet Nam exceeded the figures recorded by the world’s second-largest producer, Indonesia (88K tonnes), threefold. The third position in this ranking was occupied by Brazil (80K tonnes), with a 11% share.

In Viet Nam, pepper production expanded at an average annual rate of +8.1% over the period from 2007-2018. In the other countries, the average annual rates were as follows: Indonesia (+0.8% per year) and Brazil (+0.2% per year).

Harvested Area 2007-2018

In 2018, approx. 570K ha of pepper were harvested worldwide; stabilizing at the previous year. Overall, the pepper harvested area, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2009 when harvested area increased by 8% against the previous year. The global pepper harvested area peaked at 622K ha in 2007; however, from 2008 to 2018, harvested area failed to regain its momentum.

Yield 2007-2018

Global average pepper yield amounted to 1.3 tonne per ha in 2018, surging by 4.8% against the previous year. In general, the yield indicated prominent growth from 2007 to 2018: its figure increased at an average annual rate of +4.0% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, pepper yield increased by +53.3% against 2012 indices. The pace of growth appeared the most rapid in 2013 with an increase of 22% y-o-y. Over the period under review, the average pepper yield attained its maximum level in 2018 and is likely to continue its growth in the immediate term.

Exports 2007-2018

Global exports totaled 392K tonnes in 2018, picking up by 6.5% against the previous year. The total export volume increased at an average annual rate of +2.1% from 2007 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2015 with an increase of 7.9% y-o-y. Over the period under review, global pepper exports attained their maximum at 398K tonnes in 2016; however, from 2017 to 2018, exports stood at a somewhat lower figure.

In value terms, pepper exports stood at $2B (IndexBox estimates) in 2018. Over the period under review, pepper exports continue to indicate strong growth. The growth pace was the most rapid in 2011 with an increase of 43% against the previous year. Over the period under review, global pepper exports reached their peak figure at $3.4B in 2015; however, from 2016 to 2018, exports failed to regain their momentum.

Exports by Country

Viet Nam represented the largest exporter of pepper in the world, with the volume of exports finishing at 142K tonnes, which was approx. 36% of total exports in 2018. It was distantly followed by Brazil (73K tonnes) and Indonesia (36K tonnes), together achieving a 28% share of total exports. India (17K tonnes), Germany (16K tonnes), Sri Lanka (15K tonnes), Malaysia (12K tonnes), Mexico (8.4K tonnes), the Netherlands (7.5K tonnes), France (6.8K tonnes) and the U.S. (6.8K tonnes) took a minor share of total exports.

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

In value terms, Viet Nam ($743M) remains the largest pepper supplier worldwide, comprising 36% of global exports. The second position in the ranking was occupied by Brazil ($243M), with a 12% share of global exports. It was followed by Indonesia, with a 9.9% share.

In Viet Nam, pepper exports increased at an average annual rate of +9.6% over the period from 2007-2018. In the other countries, the average annual rates were as follows: Brazil (+7.3% per year) and Indonesia (+2.9% per year).

Export Prices by Country

In 2018, the average pepper export price amounted to $5,214 per tonne, going down by -14.2% against the previous year. Over the period under review, the pepper export price, however, continues to indicate remarkable growth. The most prominent rate of growth was recorded in 2011 an increase of 51% y-o-y. The global export price peaked at $8,660 per tonne in 2015; however, from 2016 to 2018, export prices remained at a lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was the Netherlands ($8,605 per tonne), while Mexico ($2,602 per tonne) was amongst the lowest.

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

Imports 2007-2018

Global imports totaled 414K tonnes in 2018, picking up by 8.6% against the previous year. The total import volume increased at an average annual rate of +2.9% over the period from 2007 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2013 when imports increased by 9.8% y-o-y. Over the period under review, global pepper imports attained their maximum in 2018 and are likely to see steady growth in the near future.

In value terms, pepper imports amounted to $2.1B (IndexBox estimates) in 2018. Overall, pepper imports continue to indicate a strong expansion. The pace of growth was the most pronounced in 2011 when imports increased by 41% year-to-year. The global imports peaked at $3.3B in 2015; however, from 2016 to 2018, imports stood at a somewhat lower figure.

Imports by Country

In 2018, the U.S. (75K tonnes), distantly followed by Viet Nam (35K tonnes), Germany (32K tonnes) and India (31K tonnes) were the major importers of pepper, together creating 42% of total imports. The following importers – the United Arab Emirates (16K tonnes), the UK (13K tonnes), France (11K tonnes), the Netherlands (11K tonnes), Spain (10K tonnes), Japan (9.5K tonnes), Pakistan (8.2K tonnes) and Russia (8K tonnes) – together made up 21% of total imports.

Imports into the U.S. increased at an average annual rate of +1.5% from 2007 to 2018. At the same time, Viet Nam (+21.5%), India (+8.8%), the UK (+5.4%), the United Arab Emirates (+3.9%), Spain (+2.9%), Russia (+2.6%) and France (+2.0%) displayed positive paces of growth. Moreover, Viet Nam emerged as the fastest-growing importer in the world, with a CAGR of +21.5% from 2007-2018. Pakistan, Japan and Germany experienced a relatively flat trend pattern. By contrast, the Netherlands (-2.7%) illustrated a downward trend over the same period. From 2007 to 2018, the share of Viet Nam, India and the U.S. increased by +7.5%, +4.5% and +2.7% percentage points, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the U.S. ($391M) constitutes the largest market for imported pepper worldwide, comprising 18% of global imports. The second position in the ranking was occupied by Germany ($188M), with a 8.9% share of global imports. It was followed by India, with a 7.8% share.

In the U.S., pepper imports increased at an average annual rate of +5.5% over the period from 2007-2018. In the other countries, the average annual rates were as follows: Germany (+4.8% per year) and India (+14.1% per year).

Import Prices by Country

In 2018, the average pepper import price amounted to $5,122 per tonne, shrinking by -18.3% against the previous year. In general, the pepper import price, however, continues to indicate noticeable growth. The growth pace was the most rapid in 2011 an increase of 45% against the previous year. Over the period under review, the average import prices for pepper attained their peak figure at $8,550 per tonne in 2015; however, from 2016 to 2018, import prices remained at a lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was the United Arab Emirates ($8,027 per tonne), while Viet Nam ($2,485 per tonne) was amongst the lowest.

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

Source: IndexBox AI Platform

trade

Trade and the Impact on Imports and Exports in 2020

Significant and sustained increases in the world trade index (an index measuring the number of times the word uncertainty or its variants are mentioned in Economist Intelligence Unit (EIU) reports at a country level) should be a worry for many as “the increase in trade uncertainty observed in the first quarter could be enough to reduce global growth by up to 0.75 percentage points in 2019”[1]

In August, the US Institute for supply management[2] latest report shows a contraction in production, purchasing, and employment indices.

Ahir, H, N Bloom, and D Furceri (2019), “The global economy hit by higher uncertainty”, VoxEU.org. https://voxeu.org/article/trade-uncertainty-rising-and-can-harm-global-economy

 

Uncertainty generated from Brexit, the US-China trade war, Japan – South Korea trade wars, and general discontentment with global trend towards widening income inequality is creating a toxic mix for politicians to deal with. The irony is the conventional approach of blaming your trading partners for your problems is only likely to exacerbate a general lack of confidence and increase further uncertainty.

The current round of the G7 summit in Biarritz concluded with support “to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices.” In essence, it’s signaling a need to strengthen the capabilities of the WTO to act faster and more decisively in resolving disputes that are even more political than structural in nature, requiring a more multi-faceted engagement approach. Whilst this may help in the long-run, in reality, companies will have to contend with uncertainty in global trade for some time to come as well as the impacts on the real economy from these disputes.

And all of this is happening as IMO 2020 approaches, the January 1, 2020, date by which the International Maritime Organization mandates a switch to lower sulfur fuels in order to achieve an 80% reduction in sulfur emissions leading to significant cost increases in the shipping goods via ocean freight (initial estimates between 180USD – 420 USD per TEU dependent on routing, base fuel costs, carrier).

So given the significant uncertainty around global trade agreements, the increasing use of trade as a political football, the increasing costs to trade and the shortening of product lifecycles as customers want faster, newer more differentiated offerings. Is it still worth it?

Of course this is very much dependent on what industry you are in. Whether you’re a global manufacturer or a wholesaler sourcing goods, your perspectives may be different based on investments made, sensitivity to current trade/tariff measures, customer demands, your markets, and the degree to which you are exposed to political debate and targeting.

However, I would offer that the benefits of specialization, economies of scale and unique factors of production that have underpinned global trade still exist as Adam Smith put it in 1776:

“By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”[1]

Today this simple analogy still holds true in skills, competences, capabilities, and access to markets and insights so that over time the expectation is that trade will prevail.

While the recent outlook has been gloomy, opportunities for 2020 include a resolution to a number of ongoing disputes and a final settlement on Brexit (we hope). Additionally, the maturation in technologies such as blockchain, process automation, forecasting and demand management solutions can also offset costs associated with IMO and support greater agility in the uncertain supply-chain world that we currently live in.

Indeed, if 2019 was the year of trade uncertainty, 2020 could be a restorative year in our ability to execute global trade.

Partnering with an experienced supply chain leader will be essential to minimizing cost increases while ensuring the efficient flow of your company’s goods and services.

_____________________________________________________

[1] World Economic Forum:https://www.weforum.org/agenda/2019/07/how-trade-uncertainty-is-impacting-the-global-economy/

[2]https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1

[3]Adam Smith: Wealth of nations 1776

Neil Wheeldon is the Vice Presidents Solutions, BDP International.

China

Amid US-China Trade Battle, Here is how America can Remain the World’s Strongest Economy

The Communist Party of China has laid plans for a century of unlimited Chinese power and, with it, the end of the American era. However, we still can — and must — bet big on the future of American economic power. The best antidote to China’s ambitions is to ensure America’s continued economic and technological preeminence.

Far too many strategists, investors, and policymakers accept China’s economic preeminence as an inevitable outcome, given the country’s enormous population and potential for growth.

As the business community looks toward a “partial trade deal” to unwind tariffs and reduce trade hostility between the world’s two largest economies, we must understand that non-negotiable problems in U.S.-China relations will accelerate if China closes the gap with the United States in terms of economic and technological power. With the right strategic mindset and a focus on domestic productivity, America can not only win the economic and technological contest but also turn the tide in the U.S.-China competition for global power.

China’s bid for global power is built on its economic ascendency, which is based on engagement with the United States and our allies. Chinese companies are capturing global markets and climbing the ranks of the Fortune Global 500 by taking advantage of stolen or coerced foreign intellectual property and state-orchestrated market distortions. The Communist Party is converting China’s technological power into a dystopian surveillance state and a military that is focusing its capabilities on the United States and our partners.

Chairman Xi Jinping calls regularly for Chinese forces to “prepare to fight and win wars,” while converting civilian industrial technology into military power through “civil-military fusion.” Meanwhile, China’s current account surplus is employed for global influence, buying “strategic partners” with intercontinental projects like the “Belt and Road Initiative” and state-backed acquisitions of foreign firms.

U.S.-China competition is likely to be the hardest geopolitical contest in generations — but it is a contest that the United States can win if we focus on the right objectives.

The People’s Republic of China is a challenge to America’s values and concept of world order. U.S.-China competition is likely to be the hardest geopolitical contest in generations — but it is a contest that the United States can win if we focus on the right objectives. So, where do we go from here?

Focus on GDP

The first step must be a focus on accelerating U.S. productivity growth. U.S. productivity growth need only increase from 1.3 percent a year to 2.5 percent for U.S. GDP to remain ahead of China’s for the entirety of the 2020s, the decade in which many expect China’s economy to surpass America’s.

By 2030, economic leadership will be easier to maintain as China’s demographic problems set in. Such a productivity increase is realistic, given that productivity growth from 1995 to 2008 was higher than 2.5 percent.

Protect America’s edge

The second step is to preserve our edge in advanced and emerging technologies. America must remain ahead of Communist China, not only in hard sciences, but also in the actual production of advanced goods and services.

If America competes against China only through soybean and oil production, we will fail to counter China in advanced industries such as robotics, semiconductors, aerospace and biopharmaceuticals. China is gaining in these and other technologies and industries and could eventually have a decisive advantage over the United States.

As Alexander Hamilton warned 200 years ago, America can’t be great if it is a “hewer of wood and drawer of water.” We must out-invent and outproduce China in advanced technology and industrial goods.

Maintaining U.S. advantage will require collaboration between government and corporations towards national goals in science, engineering and industry. This approach has long served our nation in times of international struggle and led to lasting commercial and national security breakthroughs.

New and Big

In order to attain these goals, Washington must think new and big. New in the sense of a bipartisan consensus that productivity growth and technological competitiveness must be national priorities.

Big in the sense of big and bold proposals. Here are three: First, implement a robust research, development and investment tax credit that will stimulate innovation and investment on American soil. Second, establish a series of well-funded “moonshot” goals to ensure American leadership in emerging industries such as advanced robotics and quantum computing. Third, develop a national productivity strategy that will take the best ideas of government and industry and focus on building the next $10 trillion in annual U.S. GDP by 2030.

Half a century ago, under the leadership of President John F. Kennedy, America faced a Communist superpower that believed that it would “bury” the United States, much as Chinese Communist leaders today believe that the 21st century belongs to China. Kennedy reminded us then that America would “bear any burden” and “meet any hardship” to prevail in that consequential time.

In the end, it was the power of the American economy, the power of American technology, and the power of American industry that brought victory over our ambitious foe. We must unleash these forces once again, wrestle them into national service, and build on toward the greater good — an American era that can and must prevail.

__________________________________________________________________

Dr. Jonathan D.T. Ward is the author of “China’s Vision of Victory” and founder of Atlas Organization, a strategy consultancy on US-China global competition. Follow him on Twitter @jonathandtward

Dr. Robert D. Atkinson is the president of the Information Technology and Innovation Foundation and the author of “Big is Beautiful: Debunking the Mythology of Small Business.” Follow him on Twitter @robatkinsonITIF..

This article originally appeared on FoxBusiness.com. Republished with permission. 

phase one

The Phase One Deal: How We Got Here And What Is Next

President Trump announced that the United States and China had reached a partial “Phase One” trade deal in mid-October, signaling a pause in the trade tensions that have steadily grown over the past two and half years.  While the precise goals of the President’s trade action against China have always been vague, there was an unquestionable desire to change certain structural issues of the Chinese economy, particularly with the country’s intellectual property and forced technology practices.  

To put the proposed Phase One deal in its proper context, this article breaks down (1) the various stages of escalation since President Trump took office, (2) what’s known about the contents of agreement, and (3) the potential risks that could derail the deal from being signed.  

The Escalation of the Trade War

The President’s most high-profile actions against China have been his use of long-thought-defunct trade authority, Section 301 of the Trade Act of 1974 (“Section 301”).  Section 301 grants the President the authority to impose tariffs on countries if it determines that the acts, policies, or practices of a country are unjustifiable and burden or restrict U.S. commerce.  

Following a lengthy investigation, the Office of the U.S. Trade Representative (“USTR”) officially determined in March 2018 that China’s policies result in harm to the U.S. economy.  Simultaneously, President Trump signed a Presidential Memorandum outlining a series of remedies that his Administration would take in response to these findings, most notably the imposition of tariffs.  

President Trump’s Section 301 tariffs currently cover most products imported from China, after having been rolled out in four different lists:  

-List 1 of the Section 301 tariffs went into effect July 2018 and imposes a 25 percent tariff on $34 billion worth of goods from China.  

-List 2 went into effect August 2018 and imposes a 25 percent tariff on $16 billion worth of goods.  

-Following China’s retaliatory tariffs on Lists 1 and 2, the United States announced List 3, which began imposing a 10 percent tariff on $200 billion of Chinese products in September 2018.  The List 3 tariffs were increased to 25 percent after negotiations between the two countries fell apart.

-List 4 could hit almost $300 billion more of Chinese products.  Part of the list (“List 4a”) went into effect on September 1 and imposes 15 percent tariffs on $112 billion of Chinese products.  The U.S. is scheduled to impose 15 percent tariffs on the remaining $160 billion of the list (“List 4b”) starting December 15.  

The Trump Administration has taken aggressive action to increase pressure on China that goes well beyond the Section 301 tariffs.  Since President Trump took office, he has targeted China’s steel and aluminum industries through global tariffs on these products. He has (at least temporarily) sanctioned major Chinese tech firms or restricted their ability to do business with the United States.  He has sanctioned Chinese individuals and entities connected to North Korea and others related to the treatment of the Uighurs in western China. He signed into law a major expansion of authority for the Committee on Foreign Investment in the United States (“CFIUS”), which has immediate and future implications for Chinese investment in the United States. 

Additionally, the Administration has moved closer to Taiwan. President Trump has authorized significant military sales to Taiwan, and as President-elect, he took a call from Taiwan’s leader Tsai Ing-wen, the first such call by a U.S. President or President-elect since the 1970s. The Administration has either directly or indirectly made clear that these restrictions, sanctions, and geopolitical relationships can be used as points of leverage in the trade negotiations.  

The Phase One Deal

Many details about what is included in the Phase One deal remain unknown.  In announcing the deal, President Trump said “We have a great deal. We’re papering it now.  Over the next three or four or five weeks, hopefully, it’ll get finished. A tremendous benefit to our farmers, technology, and many other things — the banking industry, financial services.”  As the two sides “paper” the agreement into finalized text, what is known about the deal has come largely from statements made by both sides. We know that as part of the deal, the United States will not pursue plans to increase the List 1-3 tariffs from 25 percent to 30 percent. We also know China plans to make large purchases of U.S. agricultural products.  

There are reports the Phase One deal could also delay or cancel the planned List 4b tariffs. Other reports suggest that China is seeking additional eliminations or reductions of the Section 301 tariffs.  

As for the structural changes to the Chinese economy sought by the Trump Administration, it seems as though they could be mentioned in the Phase One deal, but the real work will be addressed in subsequent phases.  

What Comes Next

The stars were aligning for President Trump and President Xi to sign the Phase One deal at the Asia-Pacific Economic Cooperation (“APEC”) meetings in Santiago, Chile this week.  Unfortunately, the APEC meetings were unexpectedly cancelled due to protests in the country, highlighting that a few weeks can feel like an eternity for sensitive trade talks.  

Assuming the U.S. and China can find another location, there are still risks out there that could prevent the deal’s signing.  

One big risk to the deal is the events unfolding in Hong Kong. The Trump Administration has been notably quiet on the protests, outside of President Trump expressing his faith in President Xi to satisfactorily resolve the situation.  The strongest statement from the Administration came from Vice President Pence, who recently said, “[T]he United States will continue to urge China to show restraint, to honor its commitments, and respect the people of Hong Kong.  And to the millions in Hong Kong who have been peacefully demonstrating to protect your rights these past months, we stand with you.”

According to multiple reports, President Trump pledged to Chinese President Xi Jinping that his Administration would remain quiet on the Hong Kong protests throughout the trade talks.  However, the Administration’s hand could be forced if the protests escalate into more sustained violence or if, as is expected, Congress passes legislation in support of Hong Kong with veto-proof majorities.  

Another risk is more vocal opposition from so-called “China hawks” that are dissatisfied that Phase One doesn’t get to the heart of the problems they have with China’s economic practices.  Senate Minority Leader Chuck Schumer (D-NY) cautioned the President that he “shouldn’t be giving in to China unless we get something big in return.” Senator Marco Rubio (R-FL) doubted China’s commitment to the deal long-term, saying, “I do believe that [China] will agree to things they don’t intend to comply with.” There are reports that China hawks within the White House are also pushing the President to reject the deal, notably Director of the Office of Trade and Manufacturing Policy Peter Navarro.  

A deal to end or pause the trade tensions between the United States and China would provide the private sector with more certainty as they make decisions about 2020 and beyond.  The Phase One deal looks to provide at least a pause, but geopolitical actions or domestic opposition could still derail the agreement before it is signed.   

___________________________________________________________

Rory Murphy is an Associate at Squire Patton Boggs, where his practice focuses on providing US public policy guidance, global cultural and business diplomacy advice that helps US and foreign governments and entities with doing business around the globe.

plantain

Africa’s Plantain Market to Reach Over 30M Tonnes by 2025

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

Consumption By Country in Africa

The countries with the highest volumes of plantain consumption in 2018 were Democratic Republic of the Congo (5.5M tonnes), Cameroon (4.8M tonnes) and Ghana (4.1M tonnes), together comprising 59% of total consumption.

From 2007 to 2018, the most notable rate of growth in terms of plantain consumption, amongst the main consuming countries, was attained by Democratic Republic of the Congo, while the other leaders experienced more modest paces of growth.

The countries with the highest levels of plantain per capita consumption in 2018 were Cameroon (197 kg per person), Ghana (141 kg per person) and Uganda (68 kg per person).

From 2007 to 2018, the most notable rate of growth in terms of plantain per capita consumption, amongst the main consuming countries, was attained by Democratic Republic of the Congo, while the other leaders experienced mixed trends in the per capita consumption figures.

Market Forecast 2019-2025

Driven by increasing demand for plantain in Africa, the market is expected to continue an upward consumption trend over the next seven years. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +2.9% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 30M tonnes by the end of 2025.

Production in Africa

The plantain production stood at 25M tonnes in 2018, picking up by 3.6% against the previous year. The total output volume increased at an average annual rate of +3.0% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2010 when production volume increased by 12% against the previous year. Over the period under review, plantain production attained its peak figure volume in 2018 and is likely to see steady growth in the near future. The general positive trend in terms of plantain output was largely conditioned by a conspicuous increase of the harvested area and a relatively flat trend pattern in yield figures.

Production By Country in Africa

The countries with the highest volumes of plantain production in 2018 were Democratic Republic of the Congo (5.5M tonnes), Cameroon (4.8M tonnes) and Ghana (4.1M tonnes), together comprising 59% of total production.

From 2007 to 2018, the most notable rate of growth in terms of plantain production, amongst the main producing countries, was attained by Democratic Republic of the Congo, while the other leaders experienced more modest paces of growth.

Harvested Area in Africa

The plantain harvested area amounted to 4.2M ha in 2018, growing by 3.7% against the previous year. The harvested area increased at an average annual rate of +2.9% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2010 with an increase of 14% against the previous year. Over the period under review, the harvested area dedicated to plantain production reached its peak figure at 4.3M ha in 2015; however, from 2016 to 2018, harvested area stood at a somewhat lower figure.

Yield in Africa

The average plantain yield amounted to 5.8 tonne per ha in 2018, approximately equating the previous year. In general, the plantain yield, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2016 when yield increased by 1.6% y-o-y. The level of plantain yield peaked at 5.8 tonne per ha in 2009; however, from 2010 to 2018, yield stood at a somewhat lower figure.

Exports in Africa

The exports totaled 99K tonnes in 2018, dropping by -5.8% against the previous year. Overall, plantain exports continue to indicate an abrupt decrease. The growth pace was the most rapid in 2013 when exports increased by 27% year-to-year. The volume of exports peaked at 181K tonnes in 2007; however, from 2008 to 2018, exports remained at a lower figure.

In value terms, plantain exports amounted to $45M (IndexBox estimates) in 2018. Over the period under review, plantain exports continue to indicate a drastic descent. The pace of growth appeared the most rapid in 2014 when exports increased by 13% year-to-year. The level of exports peaked at $85M in 2007; however, from 2008 to 2018, exports failed to regain their momentum.

Exports by Country

In 2018, Mozambique (38K tonnes) and Cote d’Ivoire (26K tonnes) were the main exporters of plantains in Africa, together making up 65% of total exports. It was distantly followed by Sudan (14K tonnes) and South Africa (12K tonnes), together committing a 27% share of total exports. The following exporters – Cameroon (3.2K tonnes) and Ghana (2.9K tonnes) – each accounted for a 6.1% share of total exports.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Cote d’Ivoire, while the other leaders experienced more modest paces of growth.

In value terms, the largest plantain markets in Africa were Cote d’Ivoire ($12M), Sudan ($11M) and Mozambique ($11M), together accounting for 76% of total exports.

Sudan experienced the highest rates of growth with regard to exports, among the main exporting countries over the last eleven-year period, while the other leaders experienced mixed trends in the exports figures.

Export Prices by Country

In 2018, the plantain export price in Africa amounted to $454 per tonne, growing by 4.8% against the previous year. Overall, the plantain export price, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2015 an increase of 11% year-to-year. Over the period under review, the export prices for plantains attained their maximum at $485 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 Cameroon ($850 per tonne), while Ghana ($203 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Cameroon, while the other leaders experienced mixed trends in the export price figures.

Imports in Africa

The imports totaled 179K tonnes in 2018, picking up by 11% against the previous year. The total imports indicated a prominent expansion from 2007 to 2018: its volume increased at an average annual rate of +5.5% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, plantain imports increased by +20.7% against 2014 indices. The pace of growth appeared the most rapid in 2013 with an increase of 19% year-to-year. Over the period under review, plantain imports reached their peak figure in 2018 and are likely to continue its growth in the immediate term.

In value terms, plantain imports totaled $51M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +1.8% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The pace of growth was the most pronounced in 2017 with an increase of 11% y-o-y. Over the period under review, plantain imports reached their maximum in 2018 and are expected to retain its growth in the near future.

Imports by Country

South Africa was the key importing country with an import of about 119K tonnes, which resulted at 66% of total imports. Senegal (29K tonnes) held the second position in the ranking, followed by Mali (17K tonnes). All these countries together took approx. 26% share of total imports. Botswana (5.1K tonnes) and Algeria (3.1K tonnes) occupied a little share of total imports.

Imports into South Africa increased at an average annual rate of +11.5% from 2007 to 2018. At the same time, Senegal (+19.5%) and Mali (+6.1%) displayed positive paces of growth. Moreover, Senegal emerged as the fastest-growing importer in Africa, with a CAGR of +19.5% from 2007-2018. By contrast, Botswana (-2.5%) and Algeria (-16.8%) illustrated a downward trend over the same period. From 2007 to 2018, the share of South Africa, Senegal and Mali increased by +46%, +14% and +4.6% percentage points, while Algeria (-11.4 p.p.) saw their share reduced. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, South Africa ($27M) constitutes the largest market for imported plantains in Africa, comprising 53% of total plantain imports. The second position in the ranking was occupied by Senegal ($13M), with a 25% share of total imports. It was followed by Botswana, with a 6.4% share.

From 2007 to 2018, the average annual rate of growth in terms of value in South Africa totaled +9.2%. The remaining importing countries recorded the following average annual rates of imports growth: Senegal (+22.9% per year) and Botswana (-3.2% per year).

Import Prices by Country

In 2018, the plantain import price in Africa amounted to $284 per tonne, coming down by -1.9% against the previous year. Overall, the plantain import price continues to indicate a perceptible setback. The growth pace was the most rapid in 2015 when the import price increased by 12% year-to-year. The level of import price peaked at $421 per tonne in 2007; however, from 2008 to 2018, import prices failed to regain their momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Algeria ($1,017 per tonne), while Mali ($64 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Algeria, while the other leaders experienced mixed trends in the import price figures.

Source: IndexBox AI Platform

kiwi

Global Kiwi Fruit Market 2019 – New Zealand and Italy are the Leading Exporters of Kiwi Fruits

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

The global kiwi fruit market revenue amounted to $7.6B in 2018. 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).

Consumption By Country

China (2.3M tonnes) constituted the country with the largest volume of kiwi fruit consumption, comprising approx. 51% of total consumption. Moreover, kiwi fruit consumption in China exceeded the figures recorded by the world’s second-largest consumer, Italy (314K tonnes), sevenfold. The third position in this ranking was occupied by Iran (248K tonnes), with a 5.5% share.

From 2007 to 2018, the average annual growth rate of volume in China amounted to +6.1%. In the other countries, the average annual rates were as follows: Italy (+8.8% per year) and Iran (+7.8% per year).

In value terms, China ($3.9B) led the market, alone. The second position in the ranking was occupied by Italy ($529M). It was followed by Spain.

Market Forecast 2019-2025

Driven by increasing demand for kiwi fruit worldwide, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +3.9% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 5.9M tonnes by the end of 2025.

Production 2007-2018

In 2018, approx. 4.3M tonnes of kiwi fruit were produced worldwide; increasing by 4.4% against the previous year. Overall, the total output indicated a prominent increase from 2007 to 2018: its volume increased at an average annual rate of +4.8% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, kiwi fruit production decreased by -5.1% against 2016 indices. The pace of growth appeared the most rapid in 2015 when production volume increased by 15% against the previous year. The global kiwi fruit production peaked at 4.5M tonnes in 2016; however, from 2017 to 2018, production failed to regain its momentum. The general positive trend in terms of kiwi fruit output was largely conditioned by a strong expansion of the harvested area and a relatively flat trend pattern in yield figures.

In value terms, kiwi fruit production stood at $7.5B in 2018 estimated in export prices. Over the period under review, kiwi fruit production continues to indicate a prominent expansion. The most prominent rate of growth was recorded in 2008 when production volume increased by 30% against the previous year. The global kiwi fruit production peaked in 2018 and is expected to retain its growth in the near future.

Production By Country

China (2.1M tonnes) constituted the country with the largest volume of kiwi fruit production, accounting for 50% of total production. Moreover, kiwi fruit production in China exceeded the figures recorded by the world’s second-largest producer, Italy (555K tonnes), fourfold. New Zealand (437K tonnes) ranked third in terms of total production with a 10% share.

In China, kiwi fruit production expanded at an average annual rate of +5.4% over the period from 2007-2018. The remaining producing countries recorded the following average annual rates of production growth: Italy (+2.6% per year) and New Zealand (+1.1% per year).

Harvested Area 2007-2018

In 2018, the global harvested area of kiwi fruit stood at 260K ha, increasing by 5.1% against the previous year. In general, the total harvested area indicated a resilient expansion from 2007 to 2018: its figure increased at an average annual rate of +4.7% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, kiwi fruit harvested area decreased by -6.7% against 2016 indices. The pace of growth was the most pronounced in 2013 when harvested area increased by 29% year-to-year. Over the period under review, the harvested area dedicated to kiwi fruit production reached its maximum at 279K ha in 2016; however, from 2017 to 2018, harvested area stood at a somewhat lower figure.

Yield 2007-2018

Global average kiwi fruit yield totaled 16 tonne per ha in 2018, stabilizing at the previous year. Over the period under review, the kiwi fruit yield, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 with an increase of 11% y-o-y. Over the period under review, the average kiwi fruit yield reached its peak figure level at 17 tonne per ha in 2008; however, from 2009 to 2018, yield failed to regain its momentum.

Exports 2007-2018

In 2018, the global exports of kiwi fruit stood at 1.4M tonnes, waning by -2.4% against the previous year. The total export volume increased at an average annual rate of +1.7% from 2007 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being observed over the period under review. The pace of growth appeared the most rapid in 2015 when exports increased by 22% against the previous year. The global exports peaked at 1.7M tonnes in 2016; however, from 2017 to 2018, exports remained at a lower figure.

In value terms, kiwi fruit exports amounted to $2.8B (IndexBox estimates) in 2018. In general, the total exports indicated a remarkable expansion from 2007 to 2018: its value increased at an average annual rate of +1.7% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, kiwi fruit exports increased by +34.1% against 2014 indices. The pace of growth appeared the most rapid in 2008 with an increase of 26% y-o-y. The global exports peaked in 2018 and are expected to retain its growth in the near future.

Exports by Country

New Zealand (417K tonnes) and Italy (289K tonnes) were the key exporters of kiwi fruit in 2018, resulting at near 29% and 20% of total exports, respectively. Chile (183K tonnes) held the next position in the ranking, followed by Greece (135K tonnes), Belgium (109K tonnes) and Iran (93K tonnes). All these countries together took near 36% share of total exports. Germany (31K 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 Iran, while the other global leaders experienced more modest paces of growth.

In value terms, New Zealand ($1.2B) remains the largest kiwi fruit supplier worldwide, comprising 42% of global exports. The second position in the ranking was occupied by Italy ($518M), with a 18% share of global exports. It was followed by Belgium, with a 11% share.

From 2007 to 2018, the average annual rate of growth in terms of value in New Zealand stood at +7.0%. In the other countries, the average annual rates were as follows: Italy (+2.3% per year) and Belgium (+2.2% per year).

Export Prices by Country

The average kiwi fruit export price stood at $1,994 per tonne in 2018, growing by 3.8% against the previous year. Over the last eleven years, it increased at an average annual rate of +3.2%. The most prominent rate of growth was recorded in 2014 when the average export price increased by 22% y-o-y. Over the period under review, the average export prices for kiwi fruit attained their maximum in 2018 and is likely to see steady growth in the immediate term.

There were significant differences in the average prices amongst the major exporting countries. In 2018, the country with the highest price was New Zealand ($2,885 per tonne), while Iran ($1,015 per tonne) was amongst the lowest.

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

Imports 2007-2018

In 2018, the amount of kiwi fruit imported worldwide totaled 1.7M tonnes, picking up by 3.9% against the previous year. The total import volume increased at an average annual rate of +3.6% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The pace of growth appeared the most rapid in 2015 with an increase of 17% year-to-year. The global imports peaked in 2018 and are likely to continue its growth in the near future.

In value terms, kiwi fruit imports stood at $3B (IndexBox estimates) in 2018. In general, the total imports indicated a buoyant increase from 2007 to 2018: its value increased at an average annual rate of +3.6% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, kiwi fruit imports increased by +47.9% against 2013 indices. The most prominent rate of growth was recorded in 2008 when imports increased by 23% year-to-year. The global imports peaked in 2018 and are likely to continue its growth in the immediate term.

Imports by Country

Spain (221K tonnes), China (182K tonnes), Belgium (156K tonnes), Japan (106K tonnes), Germany (96K tonnes), the Netherlands (79K tonnes), France (78K tonnes), Russia (72K tonnes), the U.S. (69K tonnes), Italy (48K tonnes), Taiwan, Chinese (42K tonnes) and South Korea (33K tonnes) represented roughly 72% of total imports of kiwi fruit in 2018.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by China, while the other global leaders experienced more modest paces of growth.

In value terms, Japan ($371M), China ($369M) and Spain ($285M) were the countries with the highest levels of imports in 2018, together accounting for 34% of global imports.

Among the main importing countries, China experienced the highest growth rate of imports, over the last eleven-year period, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

The average kiwi fruit import price stood at $1,806 per tonne in 2018, picking up by 4.3% against the previous year. Over the period from 2007 to 2018, it increased at an average annual rate of +2.1%. The pace of growth appeared the most rapid in 2008 when the average import price increased by 18% against the previous year. The global import price peaked at $1,875 per tonne in 2014; however, from 2015 to 2018, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2018, the country with the highest price was Japan ($3,493 per tonne), while Russia ($1,070 per tonne) was amongst the lowest.

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

Source: IndexBox AI Platform

brazil

Comparative Advantage Revealed: What the U.S. Could Gain from an FTA with Brazil

Olá Brasil!

President Trump and Brazilian President Jair Bolsonaro announced their desire to “build a new partnership” after meeting in August, potentially through a bilateral free trade agreement. For the time being, the United States and Brazil are starting with some pragmatic approaches, for example by streamlining customs procedures, agreeing on safety standards for Brazil to import U.S. pork and beef, increased imports of U.S. ethanol, and possible ways to expand energy trade.

But Brazil would be a good target for a full U.S. free trade agreement. It is by far the largest South American economy. With total two-way trade reaching $103.9 billion in 2018, Brazil is our ninth-largest export market. Beyond any political merits or challenges, the potential commercial benefits can be shown through textbook economics.

Two-way trade between the US and brazil totaled 103.9 billion in 2018

“Revealed” Comparative Advantage

In a 1965 paper entitled Trade Liberalisation and “Revealed” Comparative Advantage, economist Bela Balassa developed an index for identifying where the comparative advantage of industrial countries lay in regard to their trade with one another.

Comparative advantage basically means one country can produce a particular good at a lower opportunity cost than another, which doesn’t necessarily mean at a lower absolute cost. The revealed comparative advantage (RCA) index is a useful tool that cuts out the laborious work of trying to assess all the factors that might determine comparative advantage but still captures relative costs and differences in non-price factors. Here’s how it works.

The Power of One

A country’s RCA in a certain class of goods is calculated by dividing the proportion of the country’s exports in that class by the proportion of world exports in that class. If the resulting RCA is greater than one, then a comparative advantage has been discovered. If it is less than one, the country is said to have a comparative disadvantage in that class of good.

The RCA is therefore useful in identifying areas where large gains from trade are possible but currently untapped. If one country’s RCA in a product is below one and another’s is above one this may be a potentially lucrative pairing.

Furthermore, if the country whose RCA is below one has either tariff or non-tariff barriers on that good and is importing from an inefficient source or producing for its own consumption, there is even greater potential for benefit.

The U.S.-Brazil Trade Relationship Revealed

Applying the RCA method to the U.S.-Brazil trading relationship in 20 sectors, the relative strengths and weaknesses of the United States and Brazil are complementary in 11 of them. There are only three categories in which both countries have RCAs higher than one, in which they would compete head to head.

For Brazil, export gains could be made in minerals, animals, food products, hides and skins, metals and raw materials such as alloys and iron ores, all sectors where Brazil has a high revealed comparative advantage compared to the United States. The United States has a revealed comparative advantage in exporting capital goods, chemicals, miscellaneous goods, plastics, rubber and transportation.

US-Brazil revealed competitive advantage RCA

Classic Trade: More Sales and More Savings

When it comes to importing raw materials from Brazil, the United States already has zero or low tariff rates in most categories, but there are some products where demand is high, but tariffs remain, creating opportunities for savings for U.S. consumers. For example, U.S. tariffs on building materials such as cut stone and shaped wood range from 3.2 to 4.9 percent. The United States does not have a comparative advantage in these materials and currently imports 24 percent of its building stone and 30 percent of its shaped wood needs from Brazil.

Tariff savings may also shift consumer purchases in Brazil’s favour. For example, Brazil enjoys a comparative advantage over the United States in coffee (we don’t produce it except some specialty in Hawaii). At present, 50 percent of U.S. imported coffee comes from countries we have an FTA with including Colombia and Guatemala, so Brazil would be well poised to increase its share of U.S. coffee imports under an FTA.

The products the United States has a revealed comparative advantage in compared to Brazil are more diverse, from capital goods to chemicals. Brazil’s lowest weighted average tariff among the good represented on the chart is 6.24 percent for chemicals; the highest is 21.01 percent in transportation. Reducing tariffs on U.S. industrial and agricultural goods would benefit both Brazilian importers and U.S. exporters.

A U.S.-Brazil FTA Could Be Positive

Overall, these numbers suggest a high complementarity in revealed comparative advantages between the United States and Brazil such that removing barriers to cross border trade in goods and services between the United States and Brazil has the potential yield gains for both sides, with increased trade flows both ways.

If only negotiating a trade agreement were as easy as following the numbers. The United States has a number of pension and tax reforms it would like Brazil to enact before getting serious about an FTA, and Brazil is a member of MERCOSUR, a South American trading bloc that precludes members from negotiating tariffs on an individual country basis. And so, the two countries will continue to nibble at the margins of an agreement, achieving “free-er” trade where possible, but when they are ready, the comparative advantages are now revealed.

___________________________________________________________

Alice Calder

Alice Calder is a program manager at the Mercatus Center at George Mason University. Prior to this she worked as a graduate research assistant while pursuing her MA in Applied Economics at GMU. Originally from the UK, where she received her BA in Philosophy and Political Economy from the University of Exeter, living and working internationally sparked her interest in trade issues as well as the intersection of economics and culture.

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

Worried about trade wars’ impact on your supply chain? Here are three ways to manage risks.

Companies live in a world now where a tweet about tariffs and trade wars can rattle markets, prompt uncertainty, and question whether supply chains and global operations are positioned to handle the speed, unpredictability, and interconnectedness of the global economy.  The prevalence and threat of trade wars generate pervasive uncertainty across the globe- carrying wide-reaching implications for overall global growth. Increased cost of goods sold from upstream suppliers are squeezing margins and forcing global supply chains to adapt and react mid-stream. Despite a robust US economy, and general stability across global markets, the escalating trade war is increasing prices and making raw materials harder to obtain – threatening the positive trajectory of domestic and international economic activity.

How is this playing out in real time? Let’s look at an example: An automaker may have its engine manufactured in Germany, its transmission in Mexico and its GPS from South Korea with final assembly in the US. Tariffs could force automakers to move production, reducing economies of scale and increasing prices for the end consumer. Processing the resulting number of variables, scenarios, and decision matrices brought on by the trade war is a daunting challenge, to say the least.

Despite these marketplace, competitor and regulatory challenges, digital technologies, such as data analysis, machine learning and artificial intelligence (AI) provides companies with the resources and insights to manage risk and anticipate events. Today’s leading supply chains run on data, monitoring for risk and opportunity, and blend human and digital strategies to make decisions in real time. This is called the cognitive supply chain. It is interconnected, self-learning, predictive, adaptive and intelligent, and it can help leaders react faster to risks outside of their control. As such, here are three approaches that can help leaders manage, anticipate, and address supply chain disruptions.

Leveraging predictive analytics

Data has always been at the center of the supply chain and helps leaders make decisions. With internet of things and the growing number of connected devices, organizations can be more proactive in how they use data to enable insights.

The expanse of datasets, and increasing ease to obtain them, allows proactive organizations to leverage data to help drive their decision structure. The resulting variety of perspectives creates an opportunity to align against broader company goals. For example, how does the planned production schedule of a Swiss supplier affect my organization’s market position in Asia this holiday season? What are the potential risks, and how can they be mitigated? Data availability opens the door to these solutions. Enablers from digital technology provide:

-Digital linkage – integrated sales, production and delivery processes which have seamless flow of information.

-Control tower –visibility of all processes across the internal and external supply chain.

-Centralized collaborative e-hub – a connected ecosystem where all partners interact seamlessly with improved flow of information.

-Integrated lean logistics – applying lean principles to eliminate waste, errors and defects, minimizes lead-time and materials impacted by tariffs.

-Virtual logistics – enable on the fly deployment decisions with new logistics models.

Creating the digital twin

Today’s supply chains have growing complexities with an international network of suppliers and service markets. Efforts to integrate with external partners has led to complicated systems and processes, overwhelming supply chain leaders with data and metrics. Add in the variability of demand, and a supply chain is pushed back on its heels, reacting to demand variability. One uniquely positioned solution is called a “digital twin”.

A digital twin is a model of the supply chain. The foundation is a transparent supply chain strategy, comprised of rules on how to absorb and refine costs, or pass through to customers downstream. A digital twin uses the multi-tier supply chain data to rely upon predictive outcomes and sensory response. Uncertainties such as pending tariffs can be run through “what if” scenarios to understand the service, cost, and risk implications of changes, decisions and unexpected market conditions.

These examples are not intended to be definitive outcomes; alternatively, they allow internal and external supply chain groups the opportunity to setup a plan of action which mitigates service risk while optimizing the collective cost. Organizations must learn the discipline of using “what if” scenarios for their analysis and guide the implementation of both short term and long-term strategies and events.

For example, what is the correct level of holiday inventory investment that should be imported into the United States from China, given the potential tariff increase in the coming months? Which alternatives provide lower risk? Successful organizations will use their digital twin to move up the supplier tiers of a supply chain, and anticipate disruption, and arrange alternative routes and suppliers.

Consider managed services

Continuous investment in technology and talent with the skill and knowledge to use it can be expensive. The process engineering required to maximize ROI, along with the associating change management inevitably strains an organization’s resources. As a result, many organizations have found relief in managed services of their supply chains. It enables companies to focus on their core competencies of products and services, while contracting out the outcome: the best customer service at the optimal cost.

The consolidation of supply chain expertise into a vendor eases the necessary people, process, and technology investment. It allows organizations to shed the strain of daily variability, while maintaining the ability to make decisions and focus on the long term growth of the company. With the increasing pressure on tariffs, organizations will look to these partners to leverage their digital tools and technologies to limit the downstream effect across the supply chain.

Creating a cognitive supply chain is essential for answering the threat trade wars present. International supply chains will continue to become more expensive to maintain and manage. Businesses that are successful in meeting these complexities and adopting digital capabilities will be best equipped for the uncertainty that lies ahead.

_______________________________________________________________

Mike Landry is the supply chain service line leader at Genpact, a global professional services focused on delivering digital transformation.