“With the way rules and regulations are developing in Europe, organic is becoming hard to come by,” begins Eelco Keizer, Sales Manager at Dipasa Europe. This company processes and supplies sesame seeds, seeds and kernels, vegetable oils, and cooking ingredients. He considers the result the industry’s biggest challenge: the growing gap between laws and regulations and putting them into practice.
Eelco cites the eight Chinese pumpkin seed suppliers the company used to work with as an example. Only two remain. The other six have chosen to market their pumpkin seeds elsewhere, like the United States or Japan, because of Europe’s strict legislation. “Japan is also progressive in food safety but has reasonable rules. We’re pricing ourselves out of the market, making the products too expensive.”
Though Eelco sees the demand for organic seeds and kernels growing, the strict laws and rules hinder meeting that demand. For instance, if a shipment is rejected, it may not enter the Netherlands. “That costs both exporters and importers a lot of money. Exporters in origin countries are increasingly less willing to take that risk,” he says. That is not only an issue for organic products; the effect regulations on ethylene oxide exceeding Maximum Residue Levels MRL) have on sesame seeds is also a problem.
“In the Netherlands, the MRL is 0,05 mg/kg; in the United States, it’s five, and in Canada - where the food and consumer goods’ authority is very strict and is known to focus on safety - it’s as high as seven.” Dipasa finds it strange that, in the case of sesame seeds, when those levels were exceeded, the relevant authorities made an immediate decision, which led to high costs and lots of product waste, including seeds within the MRL. However, in other cases, for example, when a carcinogenic substance was discovered in frying pans, those same authorities allowed a two-year adjustment time.
Focus on safety
Eelco is critical of how the rules are set up, not safety, which Dipasa values highly. “We’re increasingly trying to move toward added value and making products as safe as possible,” he explains, pointing out that reaching a 100% guarantee on food safety, as some retailers demand, is unrealistic and problematic. “These, after all, remain natural products.” Still, the sales manager has high hopes for a more realistic situation: “As things stand, regulation is out of touch with what happens in practice. But, if we keep having fruitful discussions with the government, I hope legislation and practice will move closer together.”
The sector faces another challenge: supply chain disruptions. Especially the lockdowns, which China still institutes during COVID-19 outbreaks, play havoc with the supply chain, Eelco explains. “The Chinese government easily shuts down the whole port for a month or allows sporadic departures, which causes supply problems. So importers have to build up stock, but they can’t pass on the costs that entails.” He sees that despite the current somewhat lower sea container cost’s cushioning effect, that remains a difficult aspect.
Safety nets
He adds that Dipasa Europe - a subsidiary of the Dipasa Group headquartered in Mexico - gets most of its products from South America. An added advantage of this is being able to shift between the different companies within the group when supply problems arise. The sales manager sees that retailers have also prepared for supply delays by building up their stocks. That leads to a month or two delay in signing new contracts. “Retail has capitalized on the uncertainty surrounding the Ukraine war by building safety stocks to keep the supply chain going. Nobody knew what was going to happen. That’s why many retail products are stocked up and contracts delayed.”
Dipasa also notices that sustainability is becoming an ever-larger issue in nut and seed trading. “Clients want a sustainable supply chain where everything is reused or recycled. They want to be able to follow a product’s path up to the end consumer. Making the whole supply chain transparent is something companies and importers can capitalize on. Those are opportunities,” Eelco concludes.
Eelco Keizer
[email protected]
Dipasa Europe B.V.
Marssteden 56
7547 TD Enschede
The Netherlands
[email protected]
www.dipasa.nl
T +31 (53) 428 33 66