Nyhedsklip no. 88. Nr. 88. Content: World/EU. Countries

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1 Nr. 88 Nyhedsklip no. 88 Content: World/EU Chinese demand to drive global pig meat trade to new high in 2017 EU Council adopts tariff-free quotas for Ukrainian farm products EU grain yields forecast lower after hot early summer EU Commission approves Tönnies power-sharing deal Countries Denmark Danish government improving trade agreements with China Romania Romanian farmers started harvesting winter barley and rape-seed Latvia Changes in Latvian Land Low Czech African Swine Fever spreads to Czech Republic, puts neighbors on alert Ukraine IMF expects Ukraine to accelerate land reform Georgia Georgia imposed a moratorium on selling agricultural land China China opened the market to American beef for the first time in 14 years New Zealand China opens market to NZ bovine blood products New Zealand milk output to pull out of decline, as prices recover Vietnam Vietnam Gets Nod to Export Poultry to Japan Brazil Brazilian meat banned in the United States Argentina Argentina alters system to ad-dress EU beef quota shortfall Argentina issues soy, wheat downgrades - but ups corn harvest Colombia FMD resurfaces in South America with Colombian case Chile Leading Chilean pork producer forms perfect union with European agriinvestors Nicaragua Porc Production in Nicaragua Nyhedsklip for Danish Farmers Abroad June 2017

2 World Chinese demand to drive global pig meat trade to new high in 2017 Kilde: Agrar Europe 8 June 2017 Global trade in pig meat is set to record another year of growth in 2017, increasing by as much as 4.1% to an historical high of 8.6 million tonnes, according to new forecasts from the UN Food and Agriculture Organization (FAO) In its latest biannual Food Outlook report, the FAO says the rise will come despite world production of pig meat dropping by almost 1% when compared to last year. Chinese demand will once again be the main engine for growth in trade as the country looks abroad to fill widening gaps in domestic pork supplies. Having replaced Japan as the world s biggest importer in 2015, China could see its overseas purchases increase by 12% this year, according to the FAO, which identifies stricter environmental regulations as one of the reasons why Chinese pig numbers are falling. With countries such as Japan, South Korea and the Philippines requiring more pig meat, the FAO says buoyant world import demand should therefore favor the US, Brazil and Canada. Sales by the US are projected to increase by 8.4%, to 2.5 million tonnes, centered on rising trade with China and Mexico, among others. Brazil is anticipated to see its exports increase by 10%, stemming from greater trade with Asia, especially China, but also with neighboring South American countries. For Canada, a swell in sales to China is predicted to more than compensate for reduced shipments to the US, leading to an overall 3.6% increase in the country s pig meat exports. Canadian pork exporters are benefiting from a shift away from the use of ractopamine, a betaagonist compound that promotes leanness and which is banned in many countries, including China. Major pig meat importers EU supply constraints Despite favorable domestic and international demand, production in the European Union is likely to be essentially unchanged, at 23.3 million tonnes, owing to a decline in breeding sow numbers limiting the supply of piglets. This lack of production growth is likely to curtail the bloc s potential to provide additional supplies in 2017, and EU exports are predicted to remain unchanged at 3.1 million tonnes. Source: FAO Nyhedsklip for Danish Farmers Abroad June 2017

3 EU EU Council adopts tariff-free quotas for Ukrainian farm products Source: Agrar Europe 28 June 2017 EU member states have approved an agreement reached by the Maltese Presidency and the European Parliament on granting temporary trade concessions to Ukraine for a number of agri-food products The European Commission in September of last year proposed additional trade concessions to the EU market for Ukraine beyond what is in the so-called Deep and Comprehensive Free Trade Agreement (DCFTA) between the sides, part of the Association Agreement (AA) signed between in January It proposed additional duty-free access for eight agricultural products by way of tariff rate quotas (TRQs), among other measures. It did so because of the difficult economic and political situation facing the country, in a show of support also aimed at tying the bonds between the sides given competition with Russia over influence in the country and subsequent to the annexation of Crimea. EU member states then on June 6 agreed on a common position for trilogue negotiations on the matter while the European Parliament had done so a week earlier. The sides shortly afterwards reached an agreement, which was rubber-stamped today (June 28). While MEPs had wanted to leave out tomatoes, wheat and urea for fertilizer from the trade concessions, the final agreement ultimately included the products, albeit with a lower total TRQ (see table below for final agreement). The deal also removes import duties on several industrial products, such as fertilizers. EU grain yields forecast lower after hot early summer Source: Agrar Europe 27 June 2017 A hot and dry start to the summer in Europe has prompted the European Commission s crop monitoring unit, MARS, to adjust its yield forecasts for grains and oilseed crops in the bloc MARS has cut its forecasts for wheat and barley yields compared with its May estimate, but raised its projections for rapeseed and sunflowers. Central Spain and France have suffered with persistent hot and dry conditions for several weeks, affecting crops that are now in the grain-filling stages. However, in other regions including western Germany, Hungary, Romania and Poland, the adverse conditions have so far had only a limited effect on crop development. MARS cut its forecast for wheat yields by 0.6% from May to 5.38 tonnes per hectare, still slightly above the five-year average of 5.30 tonnes/ha. 3

4 Barley yield was cut by 1.4% to 4.70 tonnes/ha, which is below the five-year average of 4.83 tonnes/ha. Corn remained almost unchanged at 7.14 tonnes/ha, above the five-year average of 6.88 tonnes/ha. MARS raised its forecast for rapeseed yield in the EU by 1.6% to 3.22 tonnes/ha, just below the five-year average of 3.25 tonnes/ha. Sunflower yield was also seen higher at 2.18 tonnes/ha, an increase of 1.9% from May s estimate and above the five-year average of 1.94 tonnes/ha. EU Commission approves Tönnies power-sharing deal Earlier this year however, they effectively agreed to start afresh by restructuring the existing Tönnies business so that they share control of the Zur Mühlen Group and the Asset Group. Currently controlled by Clemens, Zur Mühlen is one of Europe s largest sausage makers with operations in both Germany and Poland. The Asset Group operates processing facilities in Germany and is currently owned by Clemens and his son Maximilian Tönnies. With the transaction, both undertakings will be integrated into the Tönnies Holding with Clemens and Robert having equal rights as joint stockholders. Countries Source: Agrar Europe 28 June 2017 EU competition authorities have approved a deal which draws a line under a longrunning dispute between the owners of Germany s largest meat processor In a decision announced today (June 28), the European Commission said it has approved changes that will see Clemens Tönnies and Robert Tönnies set up a jointly controlled holding company that incorporates the Zur Mühlen Group and the Asset Group. Sixty one year old Clemens has been involved in a series of clashes with his nephew Robert (38) in recent years. The two men jointly control the Tönnies Group but have long been battling for supremacy over this and other parts of the family s business empire. Danish government improving trade agreements with China Source: Danish Embassy in Beijing - Newsletter 3, 2017 The Danish government, at its State visit in China, concluded a number of agreements in early May to improve cooperation and trade between the two countries A particularly important agreement for the Danish pig meat industry was the MoU agreement, which will promote the possibility of Danish sales of processed pork - primarily sausages. The visit resulted in a milestone, because the agreement has been 10 years in progress and there are now only a few formalities left before exports can start. 4

5 In addition, agreements on joint development of organic food production and facilitation of visa rules for Chinese tourists access to Denmark. Finally, Denmark is co-responsible for the conservation of the Panda beer and the country is listed on the few countries having access to Panda beers in zoos. Romanian farmers started harvesting winter barley and rapeseed daytime air temperature was within 15-26ºС. Peak temperatures reached ºС in the south. Precipitation occurred everywhere over the reporting week, when it totaled 5-15 mm (20-65% of normal). This was favorable for crop development. Precipitation rates locally exceeded 35 mm in the west and east. It hailed in some regions. Soil moisture under corn crops (0-50-cm soil layer) is at good and fair levels in almost all the corn growing regions. Moisture shortages are reported locally in the south-west. Source: Black Sea Grain 21 June 2017 Winter barley and wheat are at the stage of milky ripeness, whereas cereal plants have proceeded to waxy and full ripeness in southern areas where enough soil moisture is available. Some farmers have begun harvesting of winter barley Winter rape is at the stage of developing seeds in the pod. Rapeseed is already fully ripe in some southern fields and farmers have started to harvest it. Sunflower has developed 8-24 true leaves per plant, even its heading is already observed in the south and south-west. Changes in Latvian Land Low Source: Actus Newsletter June 2017 On May 31, 2017, the President of the State Raimonds Vējonis has proclaimed amendments to the Law On Land Privatization in Rural Areas, which were previously returned to the Saeima and later revised, prescribing higher state language proficiency requirements for foreign nationals, who are purchasing farmland in Latvia The passed Law prescribes that foreign nationals will have to know the Latvian language at least at the 2nd degree of level B and will have to receive an EU citizen's registration certificate issued by Latvia. This past week, air temperatures were within their long-term normal range, except for the south-west (2-4ºС above normal). The average To facilitate the purchase of land for domestic farmers, it is planned to amend the procedure of preemptive rights. If the owner wishes to sell land, the land tenant and the administrator of 5

6 the Land Fund of Latvia will have the preemptive rights to it. The location is interesting in that it lies some distance from the border with Poland, the only one of the Czech Republic s neighbors where ASF is present. The affected village is around 100km from the Polish border but less than half that distance from Slovakia, where ASF has never been detected. The outbreak also brings ASF closer to Germany the EU s largest pig meat producer, whose output accounts for almost a quarter of the bloc s total. To avoid that many thousands of hectares of farmland are owned by a single person or a circle of closely associated persons, the procedure of land acquisition is supplemented with an additional restriction further on, associated persons will be able to acquire up to 4000 hectares of farmland. Currently, a single natural or legal entity can buy up to 2000 hectares of land. Local governments can define restrictions setting also lower limits, based on development priorities. African Swine Fever spreads to Czech Republic, puts neighbors on alert Source: Agrar Europe 28 June 2017 Czech authorities have reported the country s first ever case of African Swine Fever (ASF) adding to concerns over the westward spread of the disease in Europe In a June 27 report to the World Organization for Animal Health (OIE), the Czech Republic s State Veterinary Administration says ASF was detected in a wild boar in the Zlín region. Until three years ago, the only part of the EU affected by ASF was the island of Sardinia. Then in early 2014, the disease surfaced in the Baltic States and Poland prompting Russia to impose a controversial ban on all EU pig meat. Russia has itself been battling the virus since ASF has also been causing serious problems in Ukraine and Belarus and most recently Moldova. Poland last month warned that its own efforts to combat the disease could go to waste unless the EU helps strengthen controls in these neighbouring countries. IMF expects Ukraine to accelerate land reform Source: Black Sea Grain 23 June 2017 The meeting between President of Ukraine Petro Poroshenko and IMF Managing Director Christine Lagarde will bring Ukraine closer to the implementation of the pension and land reforms 6

7 IMF believes that the recent visit to the Fund by President Poroshenko will bring this country closer to the needed pension reform and land reform. Ukraine has already achieved certain progress but more needs to be done on these reforms. Rice recalled that following a meeting of President Poroshenko and IMF Managing Director Lagarde in Washington on June 20, the Fund released an official statement on the results of the meeting. In particular, the Fund pointed to the measures needed to accelerate privatization and to ensure concrete results in efforts to combat corruption. be possible, based on regulation of special status of the land. Earlier it was reported that the Georgian authorities took the decision to make a constitutional amendment, according to which agricultural land can be owned by only the citizens of Georgia. China opened the market to American beef for the first time in 14 years Source: Black Sea Grain 21 June 2017 Georgia imposed a moratorium on selling agricultural land Source: Black Sea Grain 16 June 2017 The Georgian Parliament on Thursday adopted in first hearing amendments to the law "On ownership of agricultural land" The decision to permit the importation of U.S. beef in China came into force on 20 June 2017 China for the first time since 2003, allowed the import of U.S. beef in the framework of agreements reached with the United States, the message of the chief state administration of PRC for quality control, inspection and quarantine. According to introduced amendments, suspend the operation of one of articles of the law permitting the transfer of agricultural land to persons who are not citizens of Georgia and registered overseas entities. The law adds a provision, which gives the agricultural land status of particular value and requires the settlement of ownership rights to her organic law. At the same time indicated that the amendment will not be a basis for the absolute prohibition of transfers of land to foreigners, it will China imposed a ban on imports of U.S. beef in 2003 after an outbreak in the U.S. of Mad Cow Disease. Before the United States was the largest supplier of beef in the country. 7

8 amid some lingering financial worries in the industry China opens market to NZ bovine blood products Source: Agrar Europe 22 June 2017 Fonterra, which processes the great majority of New Zealand's milk output, in its first forecast for collections in , which started this month, pegged them at 1.575bn kilogrammes of milk solids. China has formally agreed to open its market to bovine blood products from New Zealand - a move the NZ government says will be worth at least NZ$50 million ( 33m) per year New Zealand has previously exported some of these products to China, but permits stopped being issued by Chinese authorities in mid Access has now been given by China to16 New Zealand premises to export blood products such as bovine protein and serum. New Zealand now has market access for both finished and semi-finished products, which will mean exporters can attract a price-premium for these higher-value products. This is likely to be worth at least $50 million per year. Bovine serum and protein products are used in the animal pharmaceutical industry for manufacturing vaccines, diagnostic kits, laboratory testing media, and a range of specialized products. New Zealand milk output to pull out of decline, as prices recover Source: Black Sea Grain 23 June 2017 Milk production in New Zealand will rise in for the first time in three years, to judge by Fonterra projections, although volumes will remain below record highs, That would represent an increase of 3.2 % year on year, and end a downturn in output which kicked in as tumbling milk prices deterred producers, cutting milk values below the cost of production, and landing many farmers with substantial debts. Fonterra's milk price to farmers dropped from NZ$8.40 per kilogramme of milk solids in to NZ$3.90 per kilogramme of milk solids two seasons later. Vietnam Gets Nod to Export Poultry to Japan Source: Black Sea Grain 26 June 2017 Vietnam will export processed chicken for the first time, starting with Japan, as it has got a go-ahead from the Japanese government and the department of animal health 8

9 This is the first time that a business has been allowed to export Vietnamese poultry and that too to Japan, which is known to be one of the most difficult markets in the world. Brazilian meat banned in the United States Source: Black Sea Grain 23 June 2017 The United States introduced a ban on imports of meat from Brazil for sanitary reasons The US government announced on 22 June the suspension of all imports of meat from Brazil for sanitary reasons. Experts have estimated that Washington's decision as a serious blow to the Brazilian meat market, which is experiencing a big problem since March of this year after a corruption scandal in the industry. Then after the operation, the Brazilian Federal police had uncovered a corruption scheme involving officials at various levels and private companies to bypass the established sanitary norms. As a result, many countries are temporarily refused from supplies of Brazilian beef. According to the American authorities, the embargo will remain in place as long as the Brazilian Ministry of agriculture will take appropriate measures, deemed satisfactory by the sanitary authorities of the United States. Argentina alters system to address EU beef quota shortfall Source: Agrar Europe 23 June 2017 Argentina is setting up a new system to distribute its share of the EU Hilton beef' quota after consistently failing to take full advantage of its yearly allocation A decree published in Argentina s Official Bulletin today (June 23) alters the way the country lucrative 29,500 quota is allocated to different suppliers. The EU Hilton quota allows selected countries to supply set amounts of high quality beef to the EU at a reduced 20% import duty. Argentina s 29,500t share of the Hilton quota is larger than that of any other country but despite the high prices on offer, the South American country regularly fails to supply the full amount. By the end of May, with just one month of the current quota year left to go, Argentina had exported just 21,597t meaning the country will fall short again this year. Argentina issues soy, wheat downgrades - but ups corn harvest Source: Black Sea Grain 23 June 2017 Argentina cut its forecast for wheat sowings, citing area lost to excessive rains, in a report which also downgraded the ongoing 9

10 soybean harvest, thanks to even bigger switch than had been thought to corn The country's farm ministry lowered by 100,000 hectares to 5.90m hectares its forecast for Argentine wheat sowings for the harvest, started late this year, noting "ups and downs" in the planting window, which has been marred in some areas by rain. FMD resurfaces in South America with Colombian case Source: Agrar Europe 26 June 2017 Colombia has reported a case of foot and mouth disease (FMD) in cattle the first in the country for eight years and the first anywhere in South America since 2013 The downgrade reflected the "fact that in several areas, fields are not considered to be in a condition to be sown" for now", although the opportunity may yet arise for some seeding with wheat with a shorter growing period. The revision takes the estimate for this year's sowings further below the 6.36m tonnes seeded last season, the most since , and which brought the country a record harvest of 18.4m tonnes. The Argentine Ag. Ministry also lowered its forecast for the domestic soybean harvest, now nearly complete, by 1.0m tonnes to 57.0m tonnes, also reflecting a reduced estimate for sowings, which were cut by 700,000 hectares to a five-year low of 18.8m hectares Corn production in , including silage, was pegged at 47.5m tonnes, an upgrade of 1.0m tonnes, and a rise of 7.7m tonnes year on year, although the ministry did flag delays to the harvest both from rains and from a decision by producers to prioritize collecting soybeans. In a June 24 report to the World Organization for Animal Health (OIE), Colombian authorities said the disease was detected in seven beef cattle on a farm in Arauca, close to the country s border with Venezuela. The animals were between two and three years of age. This is the first FMD case reported in South America since isolated outbreaks in Paraguay in late 2012 and Venezuela in Colombia is home to more than 20 million cattle and has been recognized as FMD-free with vaccination since The country has not traditionally exported large volumes of beef beyond its immediate neighbor but has recently made progress supplying markets such as Russia. Colombian officials believe the latest case may be linked to cross-border movement of animals from Venezuela, whose efficiency in responding to outbreaks has previously been called into question. 10

11 Leading Chilean pork producer forms perfect union with European agri-investors Source: Press release from JB Equity, DAF/IFU and Coexca S.A - 22 May 2017 One of Latin America s leading pork producers Coexca S.A has joined forces with the Danish Agribusiness Fund (DAF) via an equity raising facilitated by an Edinburgh-based agricultural investment firm, JB Equity Limited This partnership will allow the development of an ambitious investment plan for more than US$40m within the next five years. The agreement, finalized today in Copenhagen, marks the largest of its kind in the Chilean pork sector and will significantly expand Coexca s production and strengthen its offering to customers domestically and abroad. Chile has the highest pork meat consumption in Latin America with close to 20 kg consumed per person per year. Due to Chile's focus on trade, significant industry re-investment, product safety and improvements in technology, Chile is now the sixth-largest pork exporter in the world. Porc Production in Nicaragua Source: Danish Embassy in Nicaragua June 2017 Pork production in Nicaragua is a growing and evolving industry with support from government and non-profit organizations to increase technology, development and promotion of the sector The first quarter of 2017 saw an 8% increase regarding the same period of 2016 in domestic pork production equivalent to 6.4 million, a 5% increase in the number of heads slaughtered, and an 8% increase in pork imports from the United States. The total estimated of production for 2017 is 25 million of pounds. The local consumption estimated is 6.6 pounds per capita at year. 95% of all pork production comes from family and backyard production systems, Currently Nicaraguan pork is retailed mainly in local markets and only for local consumption. Labeling requirements create barriers for the sale of pork and pork products within supermarkets chains. Under CAFTA-DR, the Dominican Republic- Central American Free Trade Agreement, Nicaragua has agreed to a 15-year phase out of all import tariffs on pork. All remaining tariffs will be eliminated by

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