Price and trade impact of Brexit on EU and UK commodity markets

The EU-UK Trade and Cooperation Agreement permits trade to continue across the English Channel without duties or taxes, to maintain the competitive position of EU exports to the UK and vice versa.

In the immediate post-Brexit era, the focus lies on customs and border delays, due to increased stringency regarding origin labelling and health certification, particularly for outbound UK shipments to mainland Europe. More documentation is now required for phytosanitary checks, as well as registration for VAT in both areas. Consequently, demand for customs brokers and freight forwarders has increased significantly.

However, in the seven weeks to 10th February 2021, there's been minimal Brexit-related price impacts on the fruit and vegetable, dairy, oilseeds, softs, nut and dried fruits market categories.  

UK and EU fruit and vegetable prices seem to have been mostly unaffected by Brexit since the EU-UK trade agreement. Despite the additional Brexit related costs (custom checks, custom agents fees, extra transport costs and internal administrative red tape), more traditional factors such as weather, supply, and demand fundamentals, amid the ongoing COVID-19 pandemic have determined UK and EU fruit and vegetable prices in the seven weeks to 10th February 2021. Also, improvements over the last seven weeks in efficiency with documentation and border custom/phytosanitary checks have reduced import friction, limiting the price impact.

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