Year Overview June

Brexit decision announced, Chinese President visits Poland and weather woes for stonefruit

The morning of the 24th of June will go down in the history books after the UK decided to officially leave the European Union with Brexit, leaving many in the fruit and vegetable sector shocked.

The majority of the British population chose to leave the EU in a referendum. The ‘Leave’ camp reached 51.9 per cent in the referendum in the end. More than 17.4 million people voted for a Brexit. The results led to much unrest on the financial markets. For example, the British pound fell sharply and reached its lowest value in more than thirty years but recovered during the morning.

Outside of the UK, Freshfel Europe, the European Fresh Produce Association, voiced 'severe concern' about the potential economic consequences that the outcome of the U.K. referendum could have on the sector.



Although a lot of fruits and vegetables could be greatly affected, it was voiced that banana supply would not be affected by Brexit.

"We got 100% of what we needed from Ecuador, even after the earthquake," explains Commercial Director Simon Trewin. "But if you were buying on the spot, market prices were quite high at times. Those who had programs and long standing, good relationships had an uninterrupted supply."

Although many expressed that they were very surprised by the 'leave' vote, some like Peter Davis, from Davis Worldwide, saw the new potential that the vote could bring, "Russia loves to work with individuals and is desperate to make a difference in Europe. I think Russia will be a major player in the UK in the future and we will see doors opening for us into Russia very quickly."

Russia
Shortly before the Brexit decision, the European Union’s top diplomats had agreed to extend sanctions against Russia by six months to keep pressure on Moscow over the conflict in eastern Ukraine. Expectations are growing that EU sanctions will be lifted in 2017, however, some diplomats in Brussels speculated that Brexit could hasten their demise, as the UK has been one of the strongest voices for sanctions.



Hilde Vautmans from the European Parliament stated that she sees cracks in the European position from different sides. She is a Euro parliamentarian (Open Vld) and recently spoke about the serious situation in the Belgian fruit cultivation sector.

"Over the last few weeks and days we have increased the pressure in the European Parliament, with internal meetings and meetings with affected fruit growers. On the other hand we are also increasing the pressure in Belgium and Flanders. I met with the relevant ministers themselves and with delegations of affected producers multiple times. Again and again it shows that the political level hasn't estimated the fallout of those sanctions correctly. The severity of the sanctions are opening eyes here and there and gradually people are starting to think of solutions."

Countries such as Turkey have reported losses of as much as 300 million due to the boycott.



Poland, amongst other countries, was greatly affected by the Russian embargo, especially with the apple trade, which had them looking towards China for exports. The Chinese president visited Poland on the 20th of June to mark a deal for trade cooperation. Following the vist, the Polish company Appolonia, immediately felt the benefits, signing a contract the following Tuesday with two major Chinese supermarkets for 40,000 tons a year.

Despite the move into new markets, many producers in Poland would still like to see trade to resume again with Russia, saying that it remains the most important market to Poland.



Stone fruit hit by bad weather
It was reported at the start of June that the weather would have a huge impact on the Northern Hemisphere cherry season. Cold wet springs followed by a sluggish start to the summer, seems be a common factor in most of the Northern Hemisphere producing countries. Somehow, the Northwest was able to escape the bad luck, reporting that May had brought a record cherry crop.
 


Cherries were the only stonefruit affected, warm winter and hail reduced the French apricot harvest and it was also reported that brix levels in Spanish stone fruit had been too low, made worse by decreased demand due to the changing weather.

It wasn't all bad news for cherries in June: Stemilt Growers introduced a new bi-colored cherry called Skylar Rae, with brix levels ranging from 23-25 on average, for the US market.

Not business as usual
A conference titled "Not Business as Usual", was held on 2 June 2016, in Brussels, and marked the first annual event where Europatat and Freshfel joined forces to inform others in the sector about the latest policy developments by the European Commission affecting fresh produce.



The header "Not business as usual", summed up all of the changes the sector in the EU had been facing, including external factors such as oil prices and the fluctuation in the exchange rates, along with other factors such as the Schengen agreement, the Greek economy, the migrant crisis, social discontent amongst Europeans, terrorist attacks, the Russian embargo, climate change and the fast changing world of technology.

During a memorable presentation at the event called 'What's Hot 2016' by Franziska Krauskopf, visitors were informed that the attention span of young consumers is shorter than a goldfish'.


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