The Courier & Advertiser (Fife Edition)
Growth of EU agricultural trade stalling
EU trade in food and agricultural products is stalling in its spectacular growth, with exports slowing and imports rising. The positive balance of trade is now half what it was in September 2021.
Top export markets in January were the UK and United States and the main sources of imports were the US and Brazil. This is a measure of the degree to which events in Ukraine and Russia are dislocating world trade.
Back in January, the US, Brazil, UK and Ukraine accounted for more than a third of imports, with Ukraine gaining from a close to 90% boost in yearon-year trade with the EU.
Imports from the UK remain 20% down on pre-Brexit levels, while EU exports to the UK have recovered and grown beyond 2020 levels. Meanwhile, in a bid to help Ukraine maintain some of its formerly massive export trade in agricultural products, Romania has stepped in to offer a conduit for exports as many of Ukraine’s key ports have been seized or are under attack by Russia.
Meanwhile, the EU is close to concluding a trade deal with New Zealand, with claims it could be in place by July.
This will be a test of whether the EU, with its offer of a consumer market of almost 500 million people, can do a better deal than was achieved by the UK and whether the UK made too many concessions to buy the publicity of early deals with New Zealand and Australia.
The EU has offered some concessions on dairy products, but with limited tariff-free import levels phased in over a relatively long time. The final negotiations have been delayed until the French rotating presidency of the EU ends next month. France and Ireland will be to the fore in opposing any concessions seen as a threat to agriculture.
New Zealand dairy farmers had a shock last week when the Fonterra dairy auction in New Zealand delivered an 8.5% reduction in dairy commodity prices, despite still-booming global markets for food. Prices were down across all products, but the biggest drop was in butter prices.
The Global Network Against Food Crises has claimed food insecurity has reached record levels. It says conflict is the biggest driver of food insecurity and that the effects will be felt most by countries that rely on food imports they can no longer afford, because they are being outbid by those with deeper pockets.