Northern hemisphere harvest edition - PROMOTING INTERNATIONAL TRADE
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P R O M O T I N G I N T E R N AT I O N A L T R A D E
Issue 245 / September 2020
Northern hemisphere
harvest edition
Thank you to Gafta members and colleagues who have sent
in harvest reports from their respective countries. See inside
for reports from several EU countries, North Africa, Russia,
Turkey, Ukraine and USA. It has been an unusual
year so far in many respects, and the
effects of the pandemic on
domestic markets is discussed
by some of the authors.
France - François Luguenot, 12%. The same problems have occurred with winter barley; one expects
around 7Mt production (9.3Mt in 2019). For durum wheat, a further fall
Consultant was recorded at 1.3Mt versus 1.6Mt in 2019, although acreage was a bit
After 2019 bumper crops, 2020 French ones higher; protein content should be good, while other specifications remain
appear to be rather disappointing, especially uncertain. As a consequence of winter acreage drop, spring barley acreage
quantity-wise. Problems started in the autumn, expanded by 19% versus 2019. Nevertheless, bad yields should lead to a
as seedings were hampered by excess water; slight decrease in production of 4.3Mt. Spring malting barley screening
this led to a fall in acreage in both wheat (13% seems to be very heterogeneous. Total barley crop is expected at 11.3Mt or
vs 2019) and winter barley (8 %). Spring was 2.5Mt less than in 2019.
then marked by a major drought. All in all,
yields have been significantly impacted; in As far as maize is concerned, one could still expect a good production
addition, they appear to be much more figure with a surge in both acreage and yield, BUT one has to remain very
heterogeneous than usual: in the centre of cautious at this stage of the campaign. July was exceptionally dry, and
France for instance, they can be down August started with a heatwave and few rains: this situation could damage
between 15 and 40% compared to last year! the plants and restrict irrigation possibilities until harvest. Like other winter
crops, rapeseed suffered from the rainy autumn and dry spring. Even if
In wheat, one expects around 29.5Mt production, which is 10Mt less than acreage is rather stable, yields have decreased versus last year and
in 2019! Best yields are recorded in the North, North-West and North-East production should be down by 0.2Mt at 3.3Mt. Prospects are much more
regions of the country. On the other hand, quality seems rather satisfactory: favourable for sunseed, both in acreage and yield: we could reach 1.8Mt
mean test weight above 79-80 kg/hl and mean protein content above 11.5- (1.3Mt in 2019) but, as for maize, a lot remains to be done.
Poland - Przemek Błazejewski, wheat had been harvested by 14 August. 25% of the wheat crop will be
feed wheat. Protein content in milling wheat is between 11.5% and 13.5%.
BST Brokers
Due to favourable weather conditions (better RAPESEED: As of 14 August, the rapeseed harvest has finished. The total
yields), we see the 2020/21 harvest in Poland production is 3.1Mt (2.7Mt in 2019/20), yield 3.3t/ha (+10%), planted
about 10% higher compared to the previous 0.92Mha (+2%). Regarding quality, a lower oil content is observed in the
season which was quite good. We expect the rapeseed harvested in southern Poland (below 40%), central Poland
total grain produced to be 30Mt (27Mt in the averages 40% and northern Poland averages 41.5%.
previous season). This year there were no
quality issues, only fusarium was noticed CORN: The expected harvest is about 4.8Mt compared to 4.2Mt in
locally. Currently, we have favourable weather 2019/20. End stocks for 2019/20 are very tight, even though the final crop
in Poland, so the grain harvest should be figure was better than we predicted. This season farmers will start
finished by 23 August. harvesting most probably by end of September. Currently in Poland there is
a problem with supply of old crop corn; this is why some farmers may try
WHEAT: We estimate wheat production to be 12Mt (11Mt in 2019/20), to harvest new corn earlier, even beginning of September. Spread between
yield 4.95t/ha (+10%), planted 2.4Mha (no change). About 70% of the new and old crop corn prices is more than 60 EUR/t.
CONTENTS Follow the value -
3. Gafta Dinner 2021
4. Ukraine harvest
remedies for
news
5. Russia harvest news
unpaid sellers
6. US harvest news affecting the goods
7. EU harvest news
By Vassia Payiataki and
Andrew Meads, Reed Smith
Claims against insolvent buyers are typically worthless. We examine options for unpaid sellers,
focused on remedies affecting the goods under the Sale of Goods Act 1979 (the “Act”).
Unpaid Seller Stoppage in Transit
Sellers are “unpaid” when (i) some or all of the price has Unpaid sellers not in possession may stop goods in transit
not been paid or tendered, or (ii) where payment is to be and retain them, provided the buyer is insolvent (s.44). The
made by a bill of exchange, which is dishonoured (s.38). goods must be “in transit” to the buyer and sellers must act
10. North Africa before transit ends. Under s.45, goods are in transit, (i)
harvest news Statutory Remedies from the time they are delivered to a carrier for the
Section 39(1) lists the automatically applicable remedies. purposes of transmission to the buyer until the time the
They can be changed or excluded by contract terms - buyer or its agent takes delivery from the carrier or (ii) until
11. What is an
sellers must consider the contract first. The remedies are: they are delivered to the buyer.
internal audit?
(i) a lien on the goods or the right to withhold delivery, (ii)
if the buyer is ‘insolvent’, the right to stop the goods in Sellers must ensure the buyer is insolvent before stoppage.
12. EU news
transit and (iii) a right of resale. The remedies exist even if
13. FTA news the buyer has title to the goods. The Effect of an On-Sale
The buyer’s on-sale or disposal of the goods will not affect
Insolvency the seller’s statutory rights, unless the seller agreed to them
Under s.61(4): (s.47). However, if documents of title are lawfully
“A person is deemed to be insolvent within the meaning of transferred to a buyer, who transfers them to a third person
this Act if he has either ceased to pay his debts in the taking them in good faith and for value, that transfer will
ordinary course of business, or he cannot pay his debts as defeat or compromise the seller’s statutory remedies.
they become due”.
The Unpaid Seller’s Right of Re-Sale
Actual insolvency is required – suspected insolvency is Unpaid sellers often need replacement buyers after
insufficient. exercising statutory remedies. New buyers gain good title
to the goods even if title has already passed to the original
Lien and Withholding Delivery buyer (s.48(2)). As sellers may face claims from original
Liens allow the possession of property belonging to others buyers, they either need contractual rights of re-sale or
to be retained as security for debts. Under s.41, that right must rely on statutory rights of re-sale under s.48(3), which
arises if, (i) the goods are sold without credit, (ii) the goods allows re-sales where: (i) goods are perishable or (ii) where
14. WTO discussions
are sold on credit, but the credit has expired or (iii) the the unpaid seller has notified the buyer to pay the price
on MRLs within a reasonable time and no such payment has been
buyer is insolvent.
made.
15. SPS updates
As sellers cannot lien their own goods, s.39(2) provides “a
right of withholding delivery similar to and co-extensive Gafta Insolvency Clause
16. News in brief
with … rights of lien or retention and stoppage in transit The Gafta clause gives no rights over the goods, but
where the property has passed to the buyer.” statutory remedies apply unless the contract overrides
17. New members
them. The clause provides the contract is closed-out at
Possession is essential to liens and retentions. Sellers giving market value. Sellers can then re-sell.
17. Wan Kwon Bae
up possession cannot exercise liens by regaining it: sellers
- new Gafta must act quickly to keep possession.
Qualified Arbitrator
Conclusion
Liens terminate when: (i) the seller delivers goods to a Unpaid sellers should consider their contractual and
18. Gafta events carrier for the purposes of transmitting them to the buyer, practical positions immediately payment is overdue
without reserving a right of disposal, (ii) the buyer or its or concerns about insolvency arise. There is value
The views and opinions agent lawfully gains possession or (iii) rights of lien or in the goods - the available remedies affecting them
expressed in Gaftaworld retention are waived (s.43). Rights of disposal are deemed depend on who possesses them and in what capacity.
are those of the individual reserved where sellers take bills of lading made out to Separate issues of contract termination arise, on
authors and do not them or their order, giving constructive possession. The which advice should be sought if there is any doubt,
necessarily reflect the right is lost if bills are endorsed and delivered to the buyer, including where re-sales are contemplated.
official policy or position even without payment.
of Gafta
2 CONTRACTS & ARBITRATION
Headline Sponsor
Ukraine
harvest 2020
By Yelena Zamiatina, Marketing Director,
Glencore Agriculture Ukraine and Chair of
Gafta’s Ukrainian Regional Trade Committee
In crop year 2020/21 Ukraine sustains its
position as a global agricultural supplier,
being among key players in corn, wheat,
barley and sunflower oil supply to the
world market.
Ukrainian crops are susceptible to weather conditions, but modern technologies Ukrainian farmers have to focus on production of high quality commodities
help to deliver better results. Despite adverse weather conditions and drought in order to sustain and increase Ukraine’s export share to EU and Asia.
in Odessa region, Ukrainian farmers will harvest the second best crop, of
over 95Mt against 90Mt in 2018/19 and 97Mt in 2019/20. Rains in May and Ukrainian Export of Bulk Commodities
June improved yield potential of wheat and barley and favoured germination 60%
of corn and sunflower. On the one hand wheat and barley crops are smaller 50%
compared to last year, while on the other hand farmers have increased
40% 37%
planted areas of corn and sunflower. Grain harvesting had been delayed by 32% 31% 31%
rains, and vessels awaited cargo in the ports in June-July. A few weeks are 30% 26% 27%
29%
27% 25%
27%
23% 25% 24% 22%
left before commencing corn and sunflower harvesting and farmers have a 21% 21%
19%
21%
20%
fair chance to harvest bumper crops, weather permitting. During our crop
tours, we have observed dense crops in good condition that can withstand 10% 23% 21% 24% 21% 19% 21%
dry and warm weather in August. With this production figure, total
0%
exportable surplus of grains, pulses, meals and vegoils may reach 71Mt as a 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020
minimum against 56Mt in 2018/19 and 74Mt in 2019/20. Sunflower is EU Asia Africa Others
crushed domestically, and sunflower oil and meal are exported.
Ukrainian Export of VegOils
Ukraine's agriculture and agribusiness sector continues to drive growth as 80% 72%
the country invests in new technologies to boost yields. The country further 70%
69%
64%
62% 62% 60%
consolidated its strong international position in 2019/20, bringing in 74Mt 60%
exportable surplus, although persistent challenges, particularly concerning 50%
export infrastructure and gaps in legislation, held back further development 40% 33%
32% 30% 31%
of the industry. 30% 27%
20% 18%
The more exports grow, the sharper the challenges become. Being unable to 10% 6% 6% 7%
4% 4% 3% 2% 4% 2%
deliver a product after a customer has made a purchase or even just dealing 0%
2% 2% 0%
with significant delays can cause damage to the originating country’s 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020
reputation. Potential opportunities to address challenges include EU Asia Africa Others
development of inland storage capacities, diversification of inland logistics
and adoption of the laws on “River Transport” and “Railway Transport”. 83% On 28 April 2020 the President of Ukraine signed the law on the land
of Ukrainian inland silos were built in the Soviet Union and are not efficient. market in Ukraine, which will be in force from 1 July 2021. The law lifts the
The grain rail cars fleet is old, with 70% of grain carriers more than 25 years moratorium on land sales. Citizens of Ukraine are allowed to acquire
old. There is also a shortage of locomotives. River logistics are poor due to agricultural land from 1 July 2021. Until 1 January 2024, the total area of
old water gates and lack of funds for maintenance. The law on “Railway such land plots cannot be more than 100 hectares. Legal entities are
Transport” would allow private enterprises and create a competitive market allowed to acquire agricultural land from 1 January 2024, except for
for rail services. A law on “River Transport” would enable the development acquisition of agricultural land by banks as foreclosure of mortgaged land.
of river infrastructure and logistics. The maximum area of agricultural land in ownership cannot exceed 100
hectares from 1 July 2021 until 1 January 2024 and 10,000 hectares after.
With growing production and exportable surplus the share of exports to the For foreign individuals, legal entities and Ukrainian legal entities with
EU is declining. In addition, the EU Commission adopted Regulation foreigners among the shareholders, it is prohibited to acquire agricultural
2020/1085 on maximum residue levels (MRLs) for chlorpyrifos and land plots unless allowed by results of a vote in an All-Ukrainian
chlorpyrifos-methyl in all crops, which will be in force from November referendum. The date of this referendum is not yet known.
2020. It will affect export of grains, oilseeds and sunoil from Ukraine to the
EU. Besides, Turkey has already banned the import of crops with MRLs of In conclusion, growing production and exportable surpluses are driving the
chlorpyrifos and chlorpyrifos-methyl exceeding those set by the new Ukrainian agricultural export industry to meet the challenges and overcome the
Regulation. Also, India and Thailand are considering similar measures. problems in order to supply food and feed commodities to the world market.
4 HARVEST NEWS
A non-standard year for
the grain crop in Russia
By Sergey Feofilov, UkrAgroConsult
In 2020, Russia sowed a record acreage of grain and leguminous crops -
47.98M ha, which is 2.6% more than last year. Yield values during the
harvest behaved in a non-standard manner because of a drought at the
time of winter grain ripening and favourable weather during the
ripening of spring grains.
M tonnes Russia: Wheat production t/ha
Russia: development of wheat yield estimates 100 3.5
from 29 June to 20 October (t/ha)
5.00 90 3.1
4.75 3.0
2.7 2.7
80 2.6 2.7
4.50
2.3 2.5
4.25 70 2.4
2.1
4.00
60
2.0
3.75
50
3.50
3.22 1.5
3.25 40 52 59 61 72 83 72 75 78 78 81
3.00 2.79
2.82 30 1.0
2.75
2.70 20
2.50
0.5
2.25 10
2.00
29.6 11.7 24.7 9.8 24.8 8.9 22.9 6.10 20.10 0 0.0
2013 2014 2015 2016 2017 2018 2019 2020 2020 2020
2018 2017 2019 2020 UAC USDA Market
30-day precipitation analysis (% of normal to 11 August) June, but soil moisture began to shrink in July, particularly in the Siberian
and Ural federal districts. In August, the situation with soil moisture began to
improve due to precipitation, although such weather conditions constrain
the progress of harvesting; according to the latest data (mid-August), grain
was harvested from 46% of the area (wheat - from 55%).
The Russian State Statistics Service has published the data on grain plantings
in Russia: wheat: 29.421M ha (28.700M ha – hereinafter are the respective
figures given by the Ag Ministry right after sowing campaign, for
comparison); barley: 8.531M ha (8.500M ha); corn: 2.872M ha (2.733M
ha). The final data will be lower because the Russian State Statistics Service
does not take into account areas written off in spring and summer before the
end of the harvest.
Taking all the above into consideration, UkrAgroConsult adjusted its crop
forecast in July:
- wheat: remains at its previous level: 78Mt as a result of expanded
acreage and reduced yield,
- barley: the current yield level exceeded our expectations, therefore the
total crop estimate was lifted to 19.5Mt due to both an acreage
adjustment and yield improvement,
- corn: favourable forecasts prompted us to lift our yield outlook; the
planted area was also adjusted in line with the Russian State Statistics
Let us consider the unusual situation this year on the example of wheat, Service’s figures, and the crop was raised to 14.7Mt.
which is the main Russian grain export crop.
The USDA estimates the wheat crop in Russia at 78Mt. However, market
The starting yield value in 2020/21 (late June) was at 2.67t/ha. This is quite estimates are higher at 78-81Mt, taking into account the increase in acreage
unusual because the harvest begins in the southern regions, where the five- in Rosstat data and the increase in average yield due to higher yields in the
year average yield of winter wheat was 3.61t/ha (for comparison, that of Centre and Volga region.
spring wheat equalled 1.69t/ha). As of 11 August, the yield figure equalled
3.68t/ha as the harvesting was advancing towards the north, which had Wheat exports in 2020/21, according to UkrAgroConsult estimates, may
been less affected by the drought. Spring wheat had showed great promise reach 36.7Mt (33.4Mt in 2019/20), and the total grain export potential of
owing to warm, rainy weather in the Volga and Central federal districts in Russia is put at 47.5Mt (42Mt).
HARVEST NEWS 5
US 2020 corn, wheat and
soybean production outlook
By Daniel W Basse, President, AgResource Company, Chicago
Big crops and record yields are made through consistency in crop
conditions across a broad area of a growing region. Such was the case
for the Central US in 2020 assuming a normal harvest period. The big
risk for 2020 US crop yields may lie in an abundance of projected
tropical storms that could produce harvest issues through the Delta and
the south-east of the US. Excluding hurricanes that migrate into the
Central US, the 2020 harvest offers a corn/soybean crop of abundance.
Unlike 2019, Central US spring planting went along without a hitch and M tonnes US Total Major Crop Supply
summer growing weather conditions featured a mix of varied rainfall and 700
temperatures. June was warmer/drier than expected across the Midwest, Corn Soy Wheat
600
which was reversed by a cooler/wetter July. The rainfall map (below) from 1
June to 1 August reflects the percent of normal rainfall with a blended 500
average equalling 101% of a 30-year rainfall trend. Historically, a warm/dry
400
June often produces record yields as corn/soy crops root down into crop
nutrients and subsoil moisture and are followed by near or above normal 300
rainfall during July. August weather has been cool/drier which demands a
200
few finishing rains into mid-September.
100
0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
AgResource Research expects that US soybean and corn yield potential
could rise further in the September NASS crop report when enumerators take
to the fields to measure US crop yield in each square mile of the Central US.
The old trader adage that big crops tend to get bigger should apply, but the
wind damage across Iowa produces some uncertainty for US corn yields.
The chart below shows US soybean yields since 1960 and the 2020 USDA
yield in red. Improved seed genetics is playing a leading role in producing
the 2020 record. The improved genetic markers from Round Up Ready 2 is
likely to lift US soybean yield potential in the years ahead. US farmers are
likely to take note of their record soybean yield and boost their US soybean
The 2020 growing season featured a progressive US weather pattern that seedings in 2021 by 3-5M acres (1.2-2M ha).
was not too hot, not too cold with a record amount of soil moisture that was
carried forward in a subsoil level from last year’s rainfall. There was no The US summer row crop harvest lies ahead and should US yields rise farther,
lasting US pattern of stagnation, with any dry weather not lasting more than strains in US storage capacity will emerge. Thankfully, China is booking an
several weeks. increasingly large amount of US corn/soybeans which offers a glimmer of
demand hope, but until traders can gauge how big-is-big in terms of 2020
Amid the near normal Central US rainfall/temperature pattern, 2020 will be yields, the CBOT and Gulf fob rallies will be capped. The underlying aspect
remembered for having a dire straight-line windstorm across Iowa on 10 of increasing investment in US seed/agronomic technology will continue to
August. This storm downed 20% of the Iowa corn crop that likely produced accelerate US and world crop yield trends in the years ahead. This, along
losses of 125-200 Mil Bu (3-5Mt). Such extreme storms with winds exceeding with discussion on how the farm of the future will look in 10-20 years, are
100MPH are named Derecho by meteorologists and tend to occur every 5-7 topics that will be discussed at GrainCom in Geneva, Switzerland.
years across the Central US. The last Derecho Midwest storm occurred in
2012. No one will ever know how many bushels were lost to the strong BPA US Soybean Yield
winds, but the economic impact on individual farmers will be devastating. 55
50
The USDA estimated 2020 US corn and soybean yields at record levels at
45
181.7 and 53.3 BPA in their August crop report, respectively. The yield
produced a record large US corn crop of 15.3 Bil Bu (390Mt) and the 40
second largest soybean crop on record at 4,425 Mil Bu (120Mt). The US all 35
wheat yield reached above 50 bu/acre (BPA) for a crop of 1,838 Mil Bu
30
(50Mt). The combined US major supply (including carry-in supplies and
imports) reached a record at just over 672Mt. The combined supply is 25
record large and will cause rallies in world fob values to be capped. Amid 20
such hefty US corn and soybean yields, there will be no shortage of supply 1950 1960 1970 1980 1990 2000 2010 2020 2030
for domestic end users or world importers into the middle of 2021. 1960-2019 USDA Aug ‘19
4
6 HARVEST NEWS
Spain - Andrés Gómez Bueno, Bulgaria - Martin Roussev, Vitagrain BG
Director General, Grupo Gof
The 2020 wheat crop in Bulgaria was a big disappointment for farmers as the crop
STRANGE DAYS: In the dropped about 25% from last year. The main reason behind the low yield was of
strangest year I’ve course the adverse weather. Autumn was extremely dry and precipitation during
known so far, the crop in the winter was below the normal seasonal level, especially in the eastern part of the
Spain has been, in country. Wheat condition in the driest areas was very poor at the start of the spring
general, strangely and the wheat badly needed moisture to recover. However, the drought and the
excellent. A good friend very low night temperatures during March and April significantly aggravated the
of mine, with a long wheat condition, especially in the north-eastern and south-eastern regions.
career in the farming
business, described it The rains finally appeared at the beginning of May. For the wheat located in the
eloquently: “would we central and western parts of the country, the May rains had a very positive effect.
have had the chance to However, in the eastern part of the country, the rains came too late and the damage
decide on a daily basis was irreversible. In addition to the lack of moisture, many farmers in the eastern
the amount of water to regions admitted that they applied too much fertiliser (ammonium nitrate) in April
receive the next 24 in the expectation of rains, announced in the weather forecast. The rains finally
hours and the didn’t materialise and the fertiliser remaining on the surface, in contact with the
temperature to have… wheat stalks, had a burning effect. The farmers have put the blame on the
we wouldn’t have had a unreliable weather forecasts during the lockdown period.
better year”. Conditions
have been excellent As a result, average yield in the north-eastern and south-eastern regions dropped by
throughout the whole a shocking 50% versus last year. The catastrophic yields in the east were partly
period, and even though in some cases quality might not be compensated by the good yield in the north-western region which was about 20%
outstanding, in general we are going to be dealing with one of higher than last year. The quality of the 2020 wheat is better than last year with an
our best crops ever. average protein level above 12.5%. We estimate this year’s wheat crop at 4.8Mt
(6.4Mt last year). The resulting export surplus is estimated at 3Mt (4.5Mt). Exports in
By some estimates, total gross income of the grain production July and August were significantly lower than last year (by about 40%) due to a
sector in Spain at current prices might be about 40% higher than sharp rally in domestic prices in June and a lack of farmer selling since the harvest.
last crop. While we are at the same time enduring an economic We expect the liquidity in the domestic market to return to its normal seasonal level
shock only smaller than our Civil War (when GDP dropped by in the coming weeks with the start of the sunflower seed and corn harvest. Except
40% for each of the three years), this is undeniably good news. in the most drought affected regions in the eastern part of the country, the
sunflower seed and corn yields are expected to be close to last year’s levels. We
Unfortunately, on the demand side…beer demand is estimate this year's sunflower seed and corn crops at 1.9Mt and 3.3Mt respectively.
considerably lower than last year (sorry, no, I can’t do more…I
am well above the average, the norm, the median and the mode
in beer per capita consumption), and in general, everything but
pork exports, are facing also substantially lower demand than last Lithuania - Karolis Čeikus, Agrochema
year, ranging from 15% to 25% below…whether we talk about
wheat flour, dairy products or broilers. Due to warmer and drier weather than the
long-term average, Lithuania’s grain harvest
Going back to my opening sentence, if we’ve had a strange year is one of the highest in a couple of years. A
so far, now that we are more than halfway through it, we still can lack of rain in late spring led to some
only say that it will indeed be very strange all the way to the end. uncertainties about grain quality, and later
For the first time in decades we are facing a market with that concern was increased because of
shrinking demand and at the same time one of our best crops several windy days in July, but a rainless
ever…who knows, may second part of July and first half of August
be time for some allowed a solid harvest start. By middle of
exports…not that they August, the rapeseed harvest was almost
would be necessary, for finished, while about half the wheat was
still we are unable to harvested.
satisfy total domestic
demand …but that might Covid-19 has not impacted agriculture in
be just a bit of Lithuania, but its indirect effect was
“strangeness” in the observed from the settlements side: due to
times we are living. One lack of cash, shorter payment terms this year
thing that has also are required by farmers, who want to be
worked strangely well paid as soon as possible after crop delivery,
has been the response to while on the other side buyers need to
the shock in terms of compete with longer settlement terms on the global market and balance this
providing liquidity to the situation. Furthermore, while good weather makes great conditions for harvest, and
system to endure the farmers don’t want to miss that opportunity, there is a shortage of storage in some
hardship coming on, so I regions right now. This affects physical production prices, and will continue until
believe we’ll definitively the end of the season.
define 2020 as a strange
year, but still a The quality of production this year is lower than last year’s results but it is still
reasonably good year for good: most of the wheat has 13% protein, 26% gluten that indicates moderate
our sector, considering quality; test weight stays a little bit below 79, lower than last year, while 13%
what we are going moisture and a 310s falling number represent quite solid parameters. Oil content in
through. The Grupo Gof silos are very
rapeseed this year is similar to the previous year’s results.
recognisable at the Port of Santander
HARVEST NEWS 7
Germany - Romania -
Thorsten Tiedemann, Sebastien Devos,
Getreide AG Koepta
Crop development in Romania in 2020
The grain harvest in Germany is wrapping has been epic this season. The wheat,
up mid-August this year, which is rather sown on about 2.2M ha first suffered
early. Warm and dry weather during from a long drought, which lasted from
harvest led to quick progress, with October to early May, especially in
generally good quality. Wheat and barley eastern and south-eastern Romania.
are showing low moisture and high test The heavy rains in early May came too
weights. Hagberg is not an issue this year. late and did not save the drought-
Precipitation during June and early July, affected areas. Then a rainy June made
with moderate temperatures, led to yields many think that Romania would end
above last year’s for milling wheat, with up with only feed wheat, but it went
some reduction of protein levels. In early just the opposite way, with excellent pod filling in the good areas (west,
August our Federal Statistics Bureau surprised the market with a very low south, north) and as a result 90% of the harvested wheat is of
crop estimate for wheat and barley. While their yield estimate was too low, surprisingly good milling quality with a very high protein content.
their lower acreage numbers can be considered as accurate. Total wheat Yields are very heterogeneous and varying from 1.5t/ha in the drought
acreage for this year was given at 2.833M ha (3.118M ha in 2019) and total affected areas up to 6-7t/ha in the good areas. We estimate the
barley acreage was put at 1.678M ha (1.709M ha in 2019). Romanian wheat crop to be at around 6.7Mt (5.5Mt is the official
estimate from the Romanian Agriculture Ministry), versus 8.8Mt in
With better wheat yields in the northern part of Germany, we can expect a
2019, which should leave about 3Mt for exports. As a result, Romanian
wheat crop this year of 21.85Mt (23.1Mt in 2019). For barley we can apply
producers are strongly holding on to their wheat production while
an unchanged yield compared to last year and thereby expect a crop of
expecting much higher prices.
11.4Mt (11.6Mt in 2019). The smaller crops are due to lower acreage.
Partially too, wet field conditions in autumn 2019, as well as a shift from We estimate the Romanian barley production to be at around 1.1Mt
winter crops to spring grains, maize and pulses for better control of and the export surplus of about 500,000t has been already been almost
herbicide resistant weeds, have led to reduced wheat and barley acreage. A entirely shipped out. The rainy May and June were very beneficial for
lower carry-in is further reducing our exportable surplus in wheat, to only the development of the corn and sunflower seeds. July however, has
about 3Mt for third countries (4.8Mt in 2019), as we also see better EU been hot and dry, with temperatures which did not harm the pollination
demand for German milling wheat from Holland/Belgium due to the lower of the corn but the lack of moisture reserve in the soil in the east and
crop in France, and from the UK due to its lower domestic harvest. south-east, and a strong evapo-transpiration of the plant, had and will
have a significant impact on the corn and to some extent the sunflower
Domestic consumption will stay at the high level of the previous year while
seed yield potential. As a result, we estimate as of today early August,
barley feeding could still increase at the expense of wheat or maize,
the 2020 Romanian corn production to be around 11.5-12Mt (13Mt in
especially for on-farm usage. This could help to explain the lack of
2019) with the potential of a lower production depending on the
competitiveness of barley for export to third countries via Hamburg. Barley
weather in August of course. The sunflower seeds usually resist pretty
exports out of Germany will be dominated by Rostock. Also, the proteins in
well the Romanian continental hot summer but they have probably
milling wheat will be different in those two export locations. While Rostock
been also affected by the lack of moisture reserves in the east and
will be able to source sufficient milling wheat to ship 12.5% protein,
south-east, and we therefore estimate the production to be around 2.3-
Hamburg will have to concentrate on exporting EU milling wheat with only
2.5Mt in 2020 (3.1Mt in 2019).
11.5% protein, finding its markets in Northern Africa.
Turkey - Gülfem Eren, Agron Tarim Ltd
The Turkish barley harvest is fully completed while the wheat harvest is The pandemic has reduced direct and
near completion, and the corn harvest has just started. indirect flour demand by restaurants,
tourism etc. The estimate for this season is
Our estimate for total wheat production for 2020/21 is 19.0Mt versus a reduction of between 0.5Mt and 1.5Mt
TUIK’s (Turkish Statistics Organisation) forecast of 20.5Mt. Milling of wheat equivalent. Lower Turkish wheat
wheat production will go down from 15.85Mt to 15.5Mt and durum flour exports are estimated to reduce
wheat production increases from 3.15Mt to 3.5Mt, leaving the total at milling wheat demand by about 0.5Mt,
the same level as last season (using the official TUIK figures for past translating into an identical drop in milling
years). At the beginning of the harvest, barley production was expected wheat imports. On the other hand, Turkish
to be about 20% higher than last season’s 7.6Mt. We have now revised flour export companies must purchase an
our estimate for 2020/21 to be only 0.5Mt above 2019/20 due to lower additional 1.5Mt of milling wheat from the
yields. Corn production will likely reach 6.5Mt in 2020/21, 0.5Mt domestic market in order to cover their
higher than last season. used import licences.
The most striking fact for the 2019/20 and 2020/21 seasons is that
although government has announced high support prices, Turkish All these effects will result in Turkish milling wheat imports being
milling wheat production remains quite low compared to previous slightly lower than 2019/20 (8.85Mt). Durum wheat imports are
years. In 2019/20 the shortfall was met with imports almost doubling estimated to be between 0.5Mt and 1.0Mt, of which 0.25Mt is already
from the 2018/19 level. The 2019/20 season also saw TMO (Turkish contracted. TMO is expected to import about 0.3-0.5Mt of barley to
Grain Board) depleting its stocks in order to regulate the market. This prop up its stocks. Corn imports are estimated to be 0.5Mt lower than
depletion is further accentuated this season, especially because TMO’s the 2019/20 import figure of 3.25Mt.
strong purchase prices are still below the unusually high market prices.
Clearly, the progress of the pandemic in Turkey and other parts of the
On the demand side there are several factors to be taken into account. world may have unforeseen consequences on our estimates.
4
8 HARVEST NEWS
Hungary – Peter Kiss, Chairman, UK – Vikki Campbell, Agriculture and
Hungarian Grain Association Horticulture Development Board (AHDB)
Hungary’s spring drought, after a Short on wheat, but long on barley – harvest
relatively dry autumn and winter, did 2020 so far….
not support optimism at the time of
harvest. All the crop estimates It’s common knowledge how tough the 2019/20
foresaw a bad crop in all the growing season has been on UK producers. This
commodities. The picture did not looks set to be borne out in the cereals volumes
change after receiving rain at the taken through to the 2020/21 marketing season.
very end of May and beginning of The reduced winter wheat area, swing to spring
June. Some said that it was too late cropping and dry, hot spring conditions have all
for wheat and barley and, perhaps, it played their part in a challenging growing season.
was too late for maize as well. The UK’s wheat crop looks set to be one of the
smallest on record and initial yield results are
As the barley harvest started, posting below the 5-year average. Current
however, the market was surprised; industry estimates are looking around the 10Mt
following some bad results on yields mark. Therefore, the UK is set to be a net
the pattern changed and the final average yield became much better importer of wheat this season. However, this won’t necessarily see UK prices rise
than expected. The estimated yield was 4.8t/ha with a crop expected significantly due to the shortage of supply. With a global surfeit of wheat, UK
to be 1.140M tonnes. The final figure, however, is 5.6t/ha, with a prices will likely be capped at import parity for the months ahead. Where we
crop of 1.33M tonnes. One of the main concerns was the test could see a greater degree of price flexibility will be in the delivered premiums,
weight. We can say that the test weights are not bad in general. with purchasers having to haul more grain into the North and West of the UK to
satisfy local demand.
The same happened in the case of wheat. The estimated yield was
4.9t/ha, but it seems that the final figure is around 5.3t/ha, resulting Barley is set to face an opposite set of challenges. The wet autumn and winter
in a crop of 4.7M tonnes. Although it is less than last year’s crop of saw many growers switch to spring cropping. This resulted in a record spring
5M tonnes, as regards yields this crop was one of the best. As barley area of over 1Mha, and the later sowing of these crops enabled them to
regards quality we do not have an overview yet, but it seems that the ride out the dry spring conditions better than winter options. Initial yield
quality is similar to last year’s. estimates for winter barley are 7-11% below the 5-year average. At this point in
harvest, minimal spring barley has been cleared, therefore it is too early to peg
Out of the winter crops rapeseed was the only commodity that was any yield predictions. However, given the spring barley conditions in May, the
disappointing, both as regards yield and quantity. The average yield UK could well be set for its second subsequent year of an 8Mt+ barley crop.
was only 2.5t/ha on 311,222 ha (an increase of 16,000 ha on last
year), with production amounting to 781,444 tonnes (down by This mountain of barley will be set to join the estimated 1.2Mt carry from last
93,000t compared to last year). season. In addition, the challenges and demand decreases caused by the
coronavirus pandemic could mean that many purchasers of malting barley are
The next question is the outlook for maize. Weather conditions were already shored up for their early season requirements from unused grain. And
not favourable at the time of sowing, therefore the market was very then we mustn’t forget Brexit. Should the UK exit the union without a trade deal,
pessimistic until we received rain just in time, and the crop was then barley exports to EU-27 could well be faced with a hefty export tariff from
saved. Since the beginning of June Hungary has received rain 1 January 2021. As seen in the 2019/20 season, a significant volume of barley
regularly and the situation has changed. There is no official crop exports was front-loaded in the season to try and circumvent these extra costs.
estimate available on the market, but the general opinion is that Should we see this again, and with significant domestic barley supplies, there
Hungary will have a crop of between 7.5M and 8M tonnes. looks to be very little support out there in the short term for barley prices.
Arable farm in Poland (kindly provided by BST Brokers)
HARVEST NEWS 9
North African
grain harvest 2020
By Yann Lebeau, Chef de Mission Maghreb-Afrique,
France Export Céréales
North African countries are experiencing a challenging
year. A regional drought severely impacted local
production and of course, like the whole world, the
Covid-19 crisis shook local economic models.
Given the current situation, the authorities have cancelled customs duties,
North Africa’s grain import (2019/2020) even during the harvest period, in order to avoid any risk of shortage and
12
maintain a fluid domestic market.
10
8
Quantity (M tonnes)
6 Algeria
4 Algeria is one of the top importers in the world, with more than
2 6Mt of milling wheat each year. France is by far the leading supplier
0 of wheat with 86% of market share during 2019/20. For the past year, the
Morocco Algeria Tunisia Total country has been experiencing a major political crisis, to which has been
Milling wheat Durum Barley Maize added the fall in the price of oil, a winter drought and more recently the
pandemic. The ministry expects a drop in production of around 20% (3.4Mt
of durum, 0.3Mt of milling wheat, 1.2Mt of barley). The country's needs are
Morocco therefore very important and we expect an increase in imports of durum
The 2019 production was low and the Kingdom had to carry out wheat and barley.
massive imports of cereals during the 2019/20 marketing year (MY).
In addition, the global pandemic has forced the state to take additional
precautionary measures, in particular, by importing large quantities of barley Tunisia
through a livestock safeguard programme. Also, the quarantine changed Tunisia has a durum and barley oriented grain production. The
consumption habits; people ate more homemade breads generally made country harvested good quantities in 2019, but still insufficient to
from durum wheat. Therefore, Morocco bought 3.65Mt of milling wheat, meet demand in the local market that consumes 1.20Mt of milling wheat
1.03Mt of durum, 3.05Mt of maize and 1.03Mt of barley (historical records (105kg per capita per year) and 1.30Mt of durum (116kg per capita per
for the last three). France distinguished itself, being the leader on milling year). Tunisia’s Ministry of Agriculture announced a low 2020 production,
wheat (49% of market share) and barley (68%). due to bad weather conditions like Algeria and Morocco. 0.09Mt of milling
wheat, 0.97Mt of durum and 0.49Mt of barley are expected. Imports should
In 2020, for the second consecutive year, Morocco suffered from a winter
therefore rise during 2020/21 to compensate for this lower production. Our
drought (34% rainfall below last 30 years’ average) that impacted yields and
forecast is around: 1.20Mt of milling wheat and 0.63Mt of durum.
led to one of the worst wheat harvests in history.
The Moroccan Ministry of Agriculture forecasts a drop of 42% compared to Summary
the previous campaign which was already well below the 5-year average. Maghreb is an important milling wheat and durum consumer, and one
National production is estimated at 1.65Mt of milling wheat, 0.75Mt durum of the main importers in the world. The next campaign is expected to
and 0.58Mt barley. Let us recall that Morocco, like all North African be unprecedented because of the current health crisis and the drought
countries, is one of the largest wheat consumers in the world, with nearly that North Africa is going through. We forecast that the region should
160kg consumed per capita per year. To meet domestic demand, the import, at least, 11.7Mt of milling wheat and 2.7Mt of durum in 2020/21.
industrial milling sector will need, for 2020/21, 5Mt of milling wheat.
Evolution of grain production in Morocco Maghreb import forecast for 2020/2021
12 12
10 10
Quantities (M tonnes)
Production (M tonnes)
8 8
6 6
4 4
2 2
0 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* Morocco Algeria Tunisia Total
Milling wheat Durum Barley Total Milling wheat Durum Barley Maize
Source: ONICL
* Estimation of Moroccan Ministry of Agriculture
10 HARVEST NEWSWhat is an internal audit and how
is it designed to help your business?
The requirement to carry out regular internal audits is a key requirement within
the Gafta Standards and Gafta Approved Registers. Sophie Arguile, Agriculture
Manager at NSF International, Gafta’s certification body for the Gafta Standards,
explains what an internal audit is and how it can help your business.
Businesses providing services need processes in place to ensure that they you to make sure your procedures are correctly implemented and working
deliver a consistent service every day; this is where an internal audit comes effectively. This becomes even more important when using sub-contractors
into its own. or operators working remotely!
Good business governance requires any business to have: The internal audit can also be broken down into sections. For example, you
1. Procedures and processes followed by team members to deliver the right may wish to carry out an internal audit each month concentrating on a
service consistently different department or activity, thus ensuring that across one year the whole
2. Procedures and processes effectively communicated, trained and business has been audited. Creating an internal audit schedule outlines what
embedded into the business needs doing and when.
3. Monitoring and measuring systems to ensure that team members are
following processes and that the processes are effective at delivering the Internal audits can be conducted in-house, so long as the person conducting
correct service is not auditing their own work, or by an independent third party. There must
be no bias from the person conducting the audit. It is a requirement of the
Point 3 is effectively internal auditing. Gafta Standards that internal auditors receive training to carry out internal
Implementing an internal auditing system will help you with your business. audits. Internal audit provides a different pair of eyes which can sometimes
Establishing control will prevent poor or incorrect services being supplied to see flaws in operations or procedures not apparent to those following them
your customers. Ideally you want to have identified and corrected problems daily. Objective evidence must be recorded to show how the internal
before your customers tell you. It enables you to take swift action to correct auditor has determined compliance or non-compliance. Examples of
any deviances that will result in poor or incorrect services. objective evidence include missing training records, incomplete forms or
important information missing from documents.
The Internal Auditing definition from the International Professional Practices
Framework states that;
Objective evidence is what you have seen during the
"Internal auditing is an independent, objective assurance and consulting audit to show that the point, or clause, has been met
activity designed to add value and improve an organization’s operations. It
helps an organization accomplish its objectives by bringing a systematic,
As with any other audit, non-conformances are raised in areas where the
disciplined approach to evaluate and improve the effectiveness of risk
requirements are not met. It is important to set timeframes for these to be
management, control and governance processes." Source: International
closed out, monitored and reviewed within your procedures. The internal
Professional Practices Framework (IPPF), The Institute of Internal Auditors
audit also allows for any successes to be identified and raised or celebrated.
Research Foundation. Florida, USA, January 2011.
This will give you examples of best practice from which to build, which,
To get started, you first need to define the scope of the internal audit and the with the current business climate is as important as ever.
areas of the business it will cover. For example, compliance to one of the
Gafta Standards would become the scope of what the audit will cover. This NSF International is an independent, not-for-profit, non-
creates a framework or checklist from which to assess current compliance. governmental public health and safety organization. NSF
International carries out audits against the Gafta Standards for
Analysis & Testing, Fumigation and Supervision, Sampling &
Use the requirements in the Gafta Standard(s) to form
Check Weighing as the scheme’s sole certification body.
the framework or checklist for your internal audit.
To apply for an audit to the Gafta Standards please contact
It gives you an overall view of operations being carried out, thus allowing ApprovedRegisters@gafta.com.
Certification requirements for the Gafta Approved Registers are changing from 1 June 2021. For more information please see www.gafta.com/approved-registers
Gafta Approved Members
Congratulations to our latest members who have achieved certification to the Gafta Standards and are listed on the Gafta Approved Registers
Member Gafta Standard Country Member Gafta Standard Country
Kafka Controle de Pragas Ltda Fumigation Fidelitas Ltd. Superintendent
UAB Baltic Fumigation Service Fumigation PT Bumandhala Shakti Terpadu Superintendent
ECO2 Kontrollü Atmosfer Sistemleri Blue Ship Marine Inspection Co B.V. Superintendent
Fumigation
İlaç San. Dış. Tic. Ltd. Şti
Europac Control Services B.V. Superintendent
ESV SERVICE LLC Fumigation
Ivan Survey & Co. Superintendent
Limited Liability Company L.P.S. Fumigation
Independent Shipping Agencies Ltd. Superintendent
LIMITED LIABILITY COMPANY TRANSTEC Fumigation
M Jary Limited Superintendent
USFGIS LLC Fumigation
To find a Gafta Approved Analyst, Fumigator or Superintendent visit www.gafta.com/Membership-Directory
APPROVED REGISTERS 11EU Parliament’s Environment Committee proposes legal EU seven-year
framework for “sustainable and deforestation-free value chains” budget agreed by
The European Parliament’s Environment Committee products derived from these commodities, do not
Council - enhanced
discussed a report on 2 July with “recommendations to originate from deforested land or degraded natural by pandemic
the Commission on an EU legal framework to halt and ecosystems and are not produced in violation of
reverse EU-driven global deforestation”. It cites numerous human rights. The list of commodities, which could be recovery fund
EU international obligations as the basis for this proposal, added to if evidence arises of deforestation risks,
as well as the EU’s Green Deal and its associated food includes meat, leather, cocoa, coffee, rubber and
and biodiversity strategies (see July issue of Gaftaworld). maize as well as all intermediate or final products EU heads of state on 21 July agreed the
It also states that EU consumption contributes to 10% derived from them. Full traceability of these goods is next seven-year budget for the EU-27,
of global deforestation. Three commodities (soy, beef proposed for all traders in such goods, and the plus a groundbreaking €750 billion
and palm oil) are responsible for nearly 80% of the legislation is proposed to also cover financial post-pandemic stimulus package
13M ha that are deforested globally each year. Global institutions involved in the provision of money, (‘Next Generation EU’) which will be
deforestation accounts for 12% of global greenhouse insurance or other services to farmers, traders and financed for the first time by joint debt
emissions and impacts adversely on biodiversity and processors involved in the supply chain. raised on the capital markets. The
the 1.6 billion people, including indigenous 2021-2027 Multiannual Financial
populations, who rely on forest resources. A final vote on the proposal by the Environment Framework (MFF) will be €1.074
Committee is expected to take place in September, trillion, with commitment
The proposal calls for mandatory due diligence for after which it will be submitted to the European appropriations for “natural resources
economic operators throughout the supply chain (from Parliament’s plenary session. A copy of the original and environment” amounting to 33%
first placing on EU market) to ensure commodities, or proposal is available from Gafta on request. of total expenditure commitments over
the seven years (it was around 39% of
the 2014-2020 budget). A full 30% of
China-EU “first significant trade deal” the total budget package is for climate
objectives, while 40% of Common
100 GIs to be recognised by each side Agricultural Policy (CAP) expenditure
is expected to be dedicated to climate
A landmark bilateral trade agreement between the EU not yet been action. A €5 billion Brexit reserve has
and China that will in future protect hundreds of set. After it is also been agreed to support member
geographical indications (GIs) of agricultural signed, the states and economic sectors hardest hit
products, was reached in July, reports Alan Ding of agreement will by the UK withdrawal.
Gafta’s Beijing office. Chinese experts said this sends still need to
a positive signal for the China-EU bilateral investment obtain the For agriculture, there are commitments
deal amid China-US and China-UK tensions. It is the consent of the to increase convergence in direct
first significant bilateral trade agreement signed European payments per hectare between member
between the EU and China, and was reached after 10 Parliament states, with the aim of all member states
years of negotiations. The Agreement will protect 100 before it takes having a level of at least €200/ha in
EU agricultural products in China’s market, as well as effect on the 2022 and €215/ha by 2027. A voluntary
Kweichow Moutai spirit drink is one
100 Chinese products in the EU market. Four years first day of the capping of total direct payments at
of the Chinese GIs to be recognised
after its entry into force, the scope of the agreement second month €100,000, to any individual farmer is
under the EU-China agreement
will expand to cover an additional 175 GI names from following introduced. Farmers have also been
both sides, with the possibility to add more in future. confirmation granted a further €7.5 billion from the
that the necessary legal procedures have been stimulus package to help them meet
The date and place the agreement will be signed have completed on both sides. the EU’s climate objectives. CAP
reform is currently being discussed by
https://data.consilium.europa.eu/doc/document/ST-8361-2020-INIT/en/pdf Agriculture Ministers. Recently
published figures by the OECD show
total subsidies to the EU farm sector
accounted for 19% of farmer receipts in
EU prepares to delay organics legislation 2017-2019, compared with around 30%
at the beginning of the century. The
The EU Commission in July told member state A recent publication by the EU Commission, “EU largest reduction was for trade-distorting
representatives that it will table a proposal to defer imports of organic agri-food products” shows that market price support. The sectors that
the date of application by one year of the new EU the EU has imported organic products from a total of receive the largest proportion of
Organic Regulation, which was due to take effect on 123 countries in the past two years. In 2019 3.24M income from public funds include rice,
1 January 2021. Most member states, along with the tonnes of organic agri-food was imported, with sugar and the livestock sectors.
farming and the organics sector, agree with this China being the largest supplier (see graph).
New sources of funding, at EU rather
decision in view of the delays to secondary
than national level, to repay ‘Next
legislation associated with this Regulation, which
Top ten exporting countries to EU of organic Generation EU’ borrowing, were also
aims to modernise and harmonise the rules for the
agri-food products (tonnes) agreed, with a plastic waste levy due
growing organic sector and ensure imported organic 500,000
400,000
to be introduced in 2021, and
products meet the same criteria as EU-produced
300,000 discussions due to take place next year
goods. The organics sector has welcomed the new 200,000 on a carbon border adjustment tax and
Farm to Fork and Biodiversity strategies published in 100,000
a review of the EU Emissions Trading
May. Key targets for the EU farm sector include a 0
Scheme. A financial transaction tax has
China
Ukraine
Dominican Rep.
Ecuador
Peru
Turkey
India
Colombia
Kazakhstan
Brazil
reduction in overall use of chemical pesticides by
also been discussed.
50%, a reduction in the use of fertilisers by 20% and
for a minimum of 25% of EU agricultural land to be 2018 2019
The package needs to be signed off by the
in organic production by 2030. Source: EU Commission
European Parliament, which is currently
scrutinising the proposed figures.
12 EU NEWSEU-Vietnam FTA enters into force
The EU-Vietnam Free Trade Agreement (EVFTA) husked rice (normal tariff for paddy rice is 211 There is also an immediate 50% reduction in the
took effect on 1 August, paving the way for a euros per tonne) and 30,000 tonnes of specific tariff for broken rice imports (normally 65 euros
significant increase in trade between the two fragrant rice varieties. These TRQs will be opened per tonne) into the EU, with further reductions to
partners. This is a modern, far-reaching on an annual basis (with pro rata amounts being zero over five years. Authenticity certificates will
agreement between two economies that are made available for the last five months of 2020), be required for the fragrant rice TRQ as well as
broadly complementary, so balanced gains from but divided into three-month tranches each year. proof of origin for all rice exports under the TRQs.
increased trade and investment are foreseen. For
agri-food, the most significant immediate gains to
Vietnam are expected to be for its rice and
seafood exports, while the EU’s key benefits are
expected to be increased exports of alcoholic
drinks and dairy and meat products. SPS and TBT
provisions are also expected to facilitate trade,
along with commitments to significantly reduce
other non-tariff barriers to trade through
cooperation on customs and border regulations.
Under the terms of this agreement, Vietnam is
due to leave the EU’s Generalised Scheme of
Preferences in two years’ time.
EU rice TRQs opened for
80,000t of Vietnamese rice
The EU has opened three new tariff rate quotas
(TRQs) for Vietnamese rice under the EVFTA:
30,000 tonnes of milled rice (normal tariff is 175
Vietnam expects to benefit from the three EU rice TRQs opened under EVFTA
euros per tonne), 20,000 tonnes of paddy and
EU legislation implementing the EVFTA can be found here:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2020.186.01.0003.01.ENG&toc=OJ:L:2020:186:TOC
Brexit uncertainties continue for UK trade Kenya and USA
launch FTA negotiations
While the UK left the EU on 31 January 2020, the real effects of the 2016 popular decision
to leave the 28-member customs union will only be felt after 31 December of this year The formal launch of trade agreement negotiations
when the transition period comes to an end. As well as continuing with negotiations on a between Kenya and USA took place on 8 July 2020,
new partnership agreement with the EU-27, the UK government has been publishing followed by two weeks of negotiations via video
advice to businesses on preparing for the changes that will take place on 1 January 2021, conferencing. US Trade Representative Robert Lighthizer
including its Border Operating Model for trade with the EU-27*, which includes some and Kenya Cabinet Secretary for Industrialisation, Trade
easements on customs procedures for the first six months of 2021. The EU Commission and Enterprise Development Betty Maina welcomed this
has also published guidance** for businesses trading with the UK, which acknowledges development. “Increasing and sustaining export
that a new partnership agreement may not be concluded by 31 December. “In any event, performance to the United States requires a trade
such an agreement would create a relationship which in terms of market access conditions arrangement that is predictable and guarantees
will be very different from the UK’s participation in the internal market, in the EU Customs preferential market access for Kenyan products,” said Ms
Union, and in the VAT and excise duty area,” it states. Gafta continues to raise issues of Maina. Mr Lighthizer commented that Kenya is an
uncertainty for the trade with UK authorities including pesticide approvals, MRLs and important strategic partner for the USA, and also stressed
potential disruptions to trade arising from the publication of the UK Global Tariff regime. his support for Africa’s regional integration efforts, stating
his belief that this agreement will complement these
While the EU document addresses some of the questions surrounding the new regulatory efforts, which include the landmark African Continental
border between Great Britain and Northern Ireland (which, in many respects, will be part Free Trade Area (AfCFTA), aiming for an eventual customs
of the EU’s customs union), advice from the UK government, which is determined to union of the 55 African states.
minimise the regulatory burden for Northern Irish businesses, has lacked detail so far.
Some strong opposition has been expressed to this FTA,
Negotiations on an EU-UK partnership agreement will continue in August and September with 22 organisations writing to the AfCFTA secretariat
with the aim of completing an agreement ahead of the European Council meeting on 15 stressing their concerns over its effect on regional
and 16 October. By 11 August, the UK had reached agreement with 20 countries or integration efforts. They also stressed their concerns for
trading blocs that have a trade agreement with the EU to ensure continuity of trade with Kenyan agriculture and food security as well as the lack of
them, and were in discussion with a further 18***. A new bilateral agreement between any comprehensive economic impact assessment. The US
Japan and UK was still in negotiation, but is expected to be agreed by the end of the month. African Growth and Opportunity Act (AGOA) under
which African countries have been exporting goods to the
*https://www.gov.uk/government/publications/the-border-operating-model US expires in 2025, and the signatories also comment:
**https://ec.europa.eu/info/sites/info/files/brexit_files/info_site/guidance-customs- “The discussion on a post-AGOA future needs to be
procedures_en_0.pdf collectively done by African countries and not a single
***https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries country rushing to conclude an agreement with such far-
reaching consequences.”
TRADE AGREEMENTS 13You can also read
