Back in December we spoke to Ben Goodchild from Nationwide Produce, he spoke about the challenging strawberry market at the time. Then it was due to bad weather, less planting in the UK and a lack of air cargo space for the Egyptian imports.
He also said the next challenge would be the impending duty on Egyptian strawberries into the UK. The UK has a quota on the amount of strawberries which can be imported duty free from Egypt, (6,000,000,000 kg) when that quota is reached a 10% duty is applicable to all imports.
In December the duty-free quota was expected to be reached by January 13th, it was in fact reached on 5th January more than a week earlier than expected. In 2022-2023 the duty-free quota was not reached until 24th of January.
“This means that many Egyptian exporters won’t export to the UK unless the client covers the additional cost,” comments Ben. “Normally Spain and Morocco would have good volumes by now and importers would switch to these markets, but Spain started late due to cold weather and volumes are lower than normal. Morocco has some fruit on the market but volumes from there are also down.”
This leaves importers with two options: cover the additional 10% duty from Egypt or pay the higher prices for Spanish or Moroccan fruit.
“I am sure importers will have made contingency plans for this situation, but I would assume we are likely to see higher prices on the shelves or smaller pack sizes as a result.”
Nigel Jenney, CEO of the Fresh Produce Consortium explains that this quota goes back to the time of the Brexit negotiations. “Before Brexit the EU had a trade agreement with Egypt which included the UK. At this time approx. 80% of the strawberry volume arrived into Europe although its final destination was the UK, but when the post-Brexit agreements were made this was not taken into consideration by the UK Government despite documented evidence provided by the FPC.”
“As with many trade agreements made post-Brexit the UK government took a ‘copy and paste’ stance and did not consider the actual industry trade data provided.”
“We continue to press on a regular basis to have the quota or tariff fundamentality changed as its unnecessary. It’s pointless as it fundamentally disrupts trade, causes more paperwork, drives inflation, and increases costs for consumers. The UK government is directly responsible for this and it leaves importers with very few alternatives. Some UK businesses have invested heavily in Egypt and have long-term relationships.
“There is now a review of the continuity agreement, agreements on everything in fact, but this won’t be completed until summer. What the Government could do now is waive the duty as a short-term fix to improve trade and relations. In short consumers want produce, the Government doesn’t want empty shelves so in reality this is a self-inflicted and avoidable problem caused solely by the UK Government.”
For more information:
Ben Goodchild
Nationwide Produce
Tel: +44 (0)1386 424800
Email: [email protected]
www.nationwideproduce.com