FAS Weekly Attache Report Digest
December 21, 2003

NEW ZEALAND, December 13, 2002 -- New Zealand Parliament passes Kyoto Protocol Bill. Farm incomes forecast to fall U.S.$ 200 million in 2002/2003 due to cold spring. Dairy: Fonterra announces new strategic plan. Organics: Organics export growth slows. Forestry: New Zealand's forest contractors launch new industry association. NZ companies stress log marketing consolidation by forming new company.

THAILAND, December 12, 2002 -- Export prices remained unchanged as foreign buyers wait for production information. Higher than expected prices dampen epxorts.

BULGARIA, December 12, 2002 -- MY02/03 Bulgarian grain exports (as of November 24, 2002) totaled 1,155,000 MT, of which 638,000 MT was wheat and 517,000 MT was barley (a record level). Major export destinations for wheat are Spain and Italy; and for barley - Algeria and Saudi Arabia. MY02/03 Sunflower exports totaled 165,000 MT. Major export destinations are Spain and Portugal. MY02/03 corn exports totaled 37,000 MT.

ITALY, December 12, 2002 -- Italy's 2002 wine production decreased 17% from 2001 to 43.2 million hectoliters (the lowest level of the last 50 years), due to adverse weather over two seasons (cold and dry winter, unusually rainy summer). Average quality is rated as good, with different ratings at local levels. Wine exports in CY 2001 dropped in volume but rose in value, due to reduced shipments of table wines, which still account for over half of total Italian exports. U.S. wine exports to Italy further recovered in 2001, but are still marginal.

NEW ZEALAND, December 12, 2002 -- New Zealand flour millers and poultry feed producers are now considering U.S. wheat to meet their import needs due to an insecure supply situation resulting from the Australian drought. Major potential buyers identified in this report seek to establish lines of communication with U.S. exporters.

JAPAN, December 12, 2002 -- With the likelihood that the Japanese market for gourmet coffee has peaked, Starbucks Coffee Japan will review its new store drive for ‘100 stores per year'; meanwhile, Suntory announces that it will begin selling E.&J. Gallo wines in Japan as a pretext to their further collaboration; Mitsui & Co. plans to set up an off-shore poultry operation in Shandong Province, China; Arcane is asked to recall its French mushrooms from the market, which were found to have excessive amounts of radiation; the National Honey Board begins to conduct promotional activities in Japan and; the Florida Department of Citrus plans to highlight the ‘preventive medicine' aspects of grapefruit to the Japanese consumer.

CROATIA, December 13, 2002 -- Poultry production and consumption have risen in recent years and are expected to continue to grow. Croatia has a domestic surplus of poultry meat but there is no domestic production of mechanically deboned meat (MDM) to supply the growing domestic meat processing industry. Unfortunately, U.S. suppliers are being shut out of the MDM market due to EU-related phytosanitary restrictions.

EUROPEAN UNION, December 13, 2002 -- After a four-year delay, the European Commission released a report on the international impacts of animal welfare standards in EU legislation.

GERMANY, December 12, 2002 -- German wine consumption continues to grow. Per capita consumption of wine including sparkling wine in CY 2001 amounted to 23.9 liters versus 23.1 liters in CY 2000. German consumers increasingly favor red wines which already make up 59 percent of the wine market. U.S. suppliers have taken advantage of this trend, increasing their sales significantly over the past five years. In CY 2001, Germany imported 250 million hectoliters of wines from the U.S. at a total value of $U.S.62 million. During the first eight months of CY 2002, imports of U.S. wines rose by about 15 percent. Domestic production of wine is forecast to grow by about 20 percent in 2002. Initial reports estimate 2002 will be a good wine year for Germany.

SPAIN, December 13, 2002 -- Spain's 2002 vintage is about 32 million hectoliters, an average yearly output. Domestic wine consumption continues to decline: gains in quality wine consumption were more than offset by losses in "table" wine consumption. Although exports increased last year to 10.6 million hectoliters, they are declining in 2002 due to reduced export sales of bulk "table" wines. Spain seeks protection for its geographical names, i.e. Jerez/Sherry and Malaga wines. Spain's parliament is drafting a new law which will effect production and marketing of wine.

KOREA, REPUBLIC OF, December 13, 2002 -- In MY 01/02, total corn imports were revised to 8.6 million MT(MMT) from 8.5 MMT based on the Korea Customs Service data. In spite of greater substitution of feed wheat for corn in mixed feed production, total corn consumption slightly increased from the previous year in line with an overall increase in feed use.

AUSTRALIA, December 13, 2002 -- Within the global confectionery market, Australia is ranked 11th for sugar confectionery consumption and 9th for chocolate. Nine out of ten people regularly consume confectionery from both the chocolate and sugar confectionery categories. Approximately 55 percent of confectionery sales are through supermarkets, with the remaining 45 percent sold through outlets such as milk-bars, convenience stores and specialty shops. New products are introduced fairly regularly to the Australian confectionery market; however highly innovative products are less common and this may be an area that offers opportunities for U.S. exporters to be successful in this market. In 2001, Australia was the 15th largest export market for U.S. confectionery products.

BELGIUM-LUXEMBOURG, December 16, 2002 -- In 2001, a disease, caused by the scolityd beetle, damaged up to 20 percent of the trees in beech forests in the Belgian province of Luxembourg. The disease has also been detected in the Grand Duchy of Luxembourg, the German region of Rhenania-Palatinate and the North-East of France.

BELGIUM-LUXEMBOURG, December 16, 2002 -- As a result of reduced 2001 production, final MY 2001 trade figures show a 13 percent year-to-year increase in pear imports and decreases in exports for both apples (-5 percent) and pears (-32 percent). For 2002, post-harvest production estimates place apple production at the same level as 2001, while pear production almost doubled to just below the 2000 level.

THAILAND, December 16, 2002 -- Thailand's retail sector accounts for approximately 16 percent of GDP. Modern trade retailers play a major role and occupy more than 54 percent of total retail sales. Both Thai and multinational retail businesses continue to expand the number of stores, introduce new store formats, restructure their operations, adjust pricing and product strategies, all to be able to compete with each other in this highly competitive industry. Introducing new imported products, especially from the U.S., is a strategy which can seize market share from competitors.

MEXICO, December 16, 2002 -- CARLA HILLS SAYS NO TO NAFTA RENEGOTIATION; CLAIMS SUCCESS* LOWER HOUSE DEMANDS FOX ACT BEFORE FARMING CRISIS HITS* SENATORS CREATE NEW COALITION TO IMPROVE AG SECTOR* NOTHING AGAINST NAFTA* FEDERAL BUDGET COULD GO UP FOR VOTE THIS WEEK, LEGISLATOR SAYS* TRADE PACT SENDS MEXICO'S FARMERS INTO THE STREETS TO PROTEST*U.S. OFFICIAL: FARMERS' PAIN WORTH FREE TRADE GAIN* FOX ASKED TO RENEGOTIATE SOME NAFTA AGREEMENTS* AGRICULTURAL GROWERS FEAR SUBSIDIES, NOT THE MARKET OPENING* ANGRY FARMERS TAKE TO THE CAPITAL'S STREETS ... AGAIN* NEW U.S.-MEXICO TOMATO SUSPENSION AGREEMENT* U.S. EMBASSY RESPONDS TO NAFTA MISPERCEPTIONS* USDOC REITERATES CONCERN OVER POSSIBLE PROTECTIONIST MEASURES* SENATE ACKNOWLEDGES NEED TO RENEGOTIATE AG CHAPTER OF NAFTA* ACADEMICS IN FAVOR OF A REVIEW ON NAFTA* MEXICAN AG PROBLEMS BLAMED ON INACTION* ECONOMISTS CITE NAFTA’S PROS AND CONS* CAMPESINO GROUPS BLAME U.S. FARM SUBSIDIES* WORKER GROUP TO PROTEST 2003 REPEAL OF AG TARIFFS* STATE OF AGRARIAN REFORM* CANADIAN PRIME MINISTER CRITICIZES U.S. FARM SUBSIDIES* CONGRESSWOMAN PREDICTS DIRE RESULTS FROM 2003* CONGRESS URGES FOX TO TAKE ACTION OR FACE BOYCOTT U.S. AG GOODS* SENATE CLAIMS U.S. VIOLATING NAFTA* ACADEMICS WARY ABOUT POSTPONING 2003* MEXICAN ECONOMY NEEDS MORE FUNDING, CLAIMS ENVIRONMENT MINISTER* NAFTA NEGOTIATOR AFFIRMS NAFTA’S BENEFITS* ECONOMIA SETS TARGET GOAL FOR REDUCING SMUGGLING* SENATE APPROVES REFORMS TO FOREIGN TRADE LAW* FARM GROUPS CONTINUE TO CALL FOR MORATORIUM* MEXICAN BISHOPS CAUTIOUS ABOUT FREE TRADE* KEY LIME PRODUCERS TO GET ORGANIZED UNDER AN ARMOUR PLAN* MEXICAN AVOCADO PRODUCTION FACING STRUCTURAL CHALLENGES*

CANADA, December 16, 2002 -- This report updates estimates of Canadian honey production and summarizes honey trade developments.

MEXICO, December 12, 2002 -- The Government of Mexico recently established a listeria testing procedure for "hamburgers, nuggets, cold cuts, or any other prepared chicken and turkey product ready for human consumption." The testing procedure will take 4-12 working days, however, shipments will be permitted to enter prior to the receipt of final test results. Exporters should plan on this procedure being in place indefinitely.

EUROPEAN UNION, December 13, 2002 -- This weekly report contains data on rice prices in the U.S., Thailand and the EU. It also lists current import duties and export subsidies in the EU. All information will be published as such in the weekly USDA publication "Rice Market News".

ITALY, December 17, 2002 -- Total Italian tomato output for 2002/03 is forecast at 6.05 million tons. This significant decline was due to exceptionally unfavorable weather conditions that affected tomato crops throughout all Italian regions. Production of tomato products is consequently foreseen as follows: tomato paste 310,000 tons, canned tomatoes 1,440,000 tons and tomato sauce 60,000 tons. By using inventories of tomato products the Italian tomato industry should keep its export flow at high levels in 2002/03, despite low production.

GREECE, December 17, 2002 -- In 2002 industrial and table tomatoes are reported by industry to have declined about 8 percent from last year's levels, to 1.6 million MT. This continues a decreasing trend from 2000 due to lower subsidies from the EU but also from extremely rainy weather during the production period. Preliminary estimates are that 800,000 MT will be processed to tomato paste and 40,000 MT will be processed for canned tomatoes.

SPAIN, December 17, 2002 -- A large crop of tomatoes for processing in MY 2001/02 resulted in higher exports and ending stocks. Processors actually received fewer tomatoes for the season, however, in order to avoid paying penalties due to over production. For MY 2002/03, area planted in processing tomatoes declined to about 59,900 hectares, some 3 percent lower than the previous year; some of the crop was consumed directly as fresh tomatoes. During the first eight months of CY 2002, Spanish exports to the United States included 5,669 tons of fresh tomatoes, 4,517 tons of tomato paste and 1,697 tons of whole peeled tomatoes.

BRAZIL, December 17, 2002 -- Post is estimating a 5-percent increase in total Brazilian tomato production in 2002 to 3.2 million tons. The increase is due to a 7.7 percent increase in area planted. The tomato crop suffered from climatic and pest problems, particularly in Sao Paulo. Total Brazilian tomato production for 2003 is forecast to increase 2 percent to 3.27 million tons, as planting for processing is forecast to increase 5 percent.

JAPAN, December 13, 2002 -- Competition in the french fry market has increased both from growth in the number of fast food restaurants not traditionally using french fries, and from the promotion of other side dishes. Cost cutting has helped some Southeast Asian countries gain a foothold in the Japanese french fry market and motivated large users to consolidate purchases. Future developments include continued declines in domestic production, the implementation of biotech labeling for potatoes next year, and industry concerns over the initiation of the Health Ministry's investigation of the health affects of acrylamide.

INDIA, December 18, 2002 -- *India to push farm cause at WTO talks*, *Tariff hike in soy oil unwarranted*, *GM food crops being tested*, *Bt cotton lets down AP farmers:study*, *India and the Cartagena Protocol on biosafety*, *Field trials of GM peanut crop in India*, *India refuses to join rice export cartel*, *Philippines may ban Indian rice*, *New Food Law being framed*, *Food industry seeks globally uniform food law*, *No free access for bio-resources*, *US firm plans to set up flavor production unit*, *Indians dig into imported chocolates*.

CANADA, December 18, 2002 -- Salmon Stocks Low on Prince Edward Island * Canadian Ethanol Plants Need Federal Help * Ukrainian Wheat Rejected * Western Farmers Plan Additional Border Protest Against CWB * Sharp Rise in Number of Restaurant Meals * Dairy Prices Inflated by Millions of Dollars Annually * Canadian Dairy Products "A Good Deal" Proclaims Dairy Group * Cheese Shortage Reveals Canadian Dairy Products Not Such a Good Deal

TURKEY, December 18, 2002 -- MY2002 tomato paste production is estimated at about 265,000 MT, significantly higher than last year's production of 185,000 MT. High domestic paste prices and increased export demand contributed to the production increase. Turkish tomato paste exports in MY2001 were 117,831 MT compared to 134,914 MT the previous year. MY2002 exports are expected to recover and reach 155,000 MT.

PORTUGAL, December 18, 2002 -- Portugal's tomato production for MY 2002/2003 is estimated to decrease by seven percent from MY 2001/2002 to 994,372 mt, 85 percent of which (834,372 mt) is expected to be sold for processing. Heavy rains during most of the harvest period have destroyed around 200,000 MT of fresh tomatoes for processing. Producers and processors are now worried about the large amount of Chinese tomato paste entering the EU, Portugal's biggest export market.

FRANCE, December 18, 2002 -- In 2002, French production of fresh tomatoes decreased by 8 percent to 806,786 MT, of which 70 percent for the fresh market and 30 percent for the processing industry. France is a minor producer of processed tomatoes relative to other EU and Mediterranean producing countries in the Mediterranean Association of Tomato Growers (AMITOM). French production represents 3 percent of AMITOM production. France is a net importer of fresh tomatoes and tomato products. Morocco and Spain supply fresh tomatoes and Italy and Spain supply processed tomato products. Tomato represents one area in which France has no trade with the United States.

UNITED KINGDOM, December 18, 2002 -- The UK is the largest importer of wine by value in the world and is seen as a key target market by most wine producing nations. As the UK produces very little wine, imports essentially account for 100% of the market. The UK is the largest export market for U.S. wine and their success shows no sign of abating with 25-30% volume growth year on year, mirrored annually by a 20-25% increase in value.

DENMARK, December 18, 2002 -- Due to aggressive East European suppliers selling at very low prices, U.S. softwood and plywood exports to Denmark are minimal. Hardwood exports are growing, with oak as the dominant variety, but these are mainly for reexport.

SPAIN, December 18, 2002 -- Although declining, dwelling starts in 2002 will again be over thehalf-million-unit bench mark. Next year’s performance is uncertain, however. Forother wood consuming sectors, flooring is growing rapidly, home renovation is firm, butfurniture has slowed. From the record levels attained in 2000, forest products importshave declined significantly from all sources, including the U.S.; southern pine has beenparticularly affected. Stock replenishment, euro appreciation against the dollar anddecreased tropical hardwood supplies should help to sustain U.S. forest productimports. Increased quality wine production is creating greater marketing opportunitiesfor U.S. oak in cooperage products.

MEXICO, December 18, 2002 -- Mexico's total tomato production for MY 2002/03 is forecast to be very close to that of MY 2001/02. Tomato exports are expected also to remain similar to MY 2001/02 levels. Tomato paste production for MY2003/04 will remain at low levels because it is now more profitable to import tomato paste. Therefore, tomato paste imports are forecast to be higher for MY 2003/04.

MEXICO, December 18, 2002 -- MY 2002/03 Mexican avocado production is forecast at 952,000 MT, due to favorable weather conditions, better yields, and more trees coming into production. Mexican avocado exports to the U.S. totaled 29,914 MT in CY 2001 and are expected to increase to 35,000 MT, mainly due to increases in the number of APHIS-approved hectares.

ALGERIA, December 19, 2002 -- Due to high prices of vegetable oil on the world market, imports of sunflower oil and soybean oil decreased tremendously in MY 2001. Following the tariff reforms on 2001, duties on crude oils and on meal were lowered further.

THAILAND, December 20, 2002 -- The purpose of this report is to update the readers in the current hypermarket situation in Thailand.

EUROPEAN UNION, December 19, 2002 -- Due to reduced catch limits and the depletion of certain fish stocks, total EU fish catches in 2000 decreased by 4% compared to 1999. This development will continue in the coming years as the European Commission proposed drastic cuts in 2003 allowed fish catches. This report provides statistical data on EU fish catches, aquaculture, the EU fishing fleet and imports and exports. Changes in the EU's fisheries policy will be reported in a second seafood report.

EUROPEAN UNION, December 19, 2002 -- Export refunds for tomatoes, oranges, lemons and apples were set for the period January-March 2003. Refunds for nuts were set for the period January-June 2003.

EGYPT, December 19, 2002 -- General Authority for Supply Commodities purchased 180,000 MT of U S wheat and 120,000 MT of French wheat in November 2002. The Food Industries Holding Company clinched an agreement to import 100,000 MT of Syrian durum wheat in exchange for unspecified amounts of Egyptian rice and potatoes.

CHILE, December 19, 2002 -- Chile's tomato paste production is expected to rebound following a stronger demand in its export markets. Although exports of fresh tomato are expected to fall, production is forecasted to stay at similar level then last years.

VENEZUELA, December 19, 2002 -- The Venezuelan Ministry of Agriculture and Lands published a Decree in the Venezuelan Official Gazette on October 8, 2002 announcing the exemption of the agricultural sector from Income Tax. The list of required documents has been expanded and there is concern that the Government of Venezuela is trying to establish greater property and investment controls on the private sector.

YUGOSLAVIA, December 19, 2002 -- Heavy rainfall has waterlogged fields and stopped farmers from sowing almost 40 of forecast wheat area planted. Low fertilizer use and mediocre seed quality will also lead to lower output for wheat in the next marketing year. A promise of government production subsidies for oilseeds discouraged some farmers from planting wheat and barley. Overall wheat production in MY03 could fall by 30 percent to below 2 million metric tons – which would not satisfy Yugoslav domestic consumption needs.

EL SALVADOR, December 19, 2002 -- Familiarity with U.S. food products and an abundant amount of family remittances make San Miguel a very attractive market for U.S. food exporters. Close to 2 million Salvadoreans reside in the U.S. and send to their relatives approximately $ 2 billion per year. San Miguel is the second city in commercial importance in El Salvador, however most distribution companies there are not aware of how to import directly and end up paying high prices for consumer oriented products.

CHINA, PEOPLES REPUBLIC OF, December 17, 2002 -- This is an UNOFFICIAL translation of the People's Republic of China Inspection and Quarantine Administrative Measures for Entry and Exit Aquatic Products and should be used as a guide only. Exporters should carefully discuss regulations and their application with Chinese importers to ensure that their interpretation of the regulation is accurate.

KOREA, REPUBLIC OF, December 19, 2002 -- The Korean market for organic products is expected to grow dramatically in the next five years. U.S. exporters have a unique opportunity to educate buyers especially about U.S. processed organic products and to develop relationships which can grow into long-term sales.

PHILIPPINES, December 20, 2002 -- President Gloria Macapagal Arroyo has ordered the Department of Agriculture-Bureau of Plant Industry (BPI) to temporarily stop issuing import permits for vegetable products after receiving complaints that the domestic vegetable industry was being hit by a surge of low-priced vegetable imports, effective immediately. The DA has likewise said that it would push for an increase in vegetable tariffs from the current applied rate of 7% to the maximum bound rate of 40%.

PHILIPPINES, December 20, 2002 -- Exports of coconut oil and copra meal in August 2002 declined by 56 and 37 percent, respectively, compared to their levels the previous year. Prices of coconut products were generally higher during the period as global supplies of copra remained tight.

EUROPEAN UNION, December 20, 2002 -- This weekly report contains data on rice prices in the U.S., Thailand and the EU. It also lists current import duties and export subsidies in the EU. All information will be published as such in the weekly USDA publication "Rice Market News".

THAILAND, December 20, 2002 -- Export prices for most grades firmed from the previous week's level due mainly to stronger Thai currency against the U.S. dollar.

SPAIN, December 20, 2002 -- Over 26 percent of total food products in Spain are consumed through the HRI sector. This percentage increases every year. The Spanish HRI sector is very complex. Spain is also one of the leading tourist destinations in the world.

SOUTH AFRICA, REPUBLIC OF, December 20, 2002 -- South Africa's CY2002 citrus production is estimated to have increased by about 8%from a year earlier. However, average fruit size will be smaller than last year because of unfavorable weather during the fruit development stages in some growing areas. More fruit is therefore expected to be sent for processing and to the domestic market, with a decrease of 8% in exports compared to CY2001. Grapefruit area and output continue to stagnate based on weak international demand. Citrus output in CY2003 is expected to decrease by 5 percent.

EGYPT, December 20, 2002 -- Egyptian rice exports are expected to decline by about 48 percent in CY 2002 due to high prices relative to other suppliers.

LITHUANIA, December 20, 2002 -- According to sources, Lithuania will import 100,000 metric tons (MT) of duty free grain during the balance of MY'02 (July/June) from Russia, Ukraine and/or Kazakhstan.

SPAIN, December 20, 2002 -- Spanish avocado production during marketing year 2001 (Jul ‘01-Jun ‘02) increased from previous years. Marketing year 2002 harvest area and production are forecast to increase further to about 8,000 hectares, and 68,000 metric tons. Immigration from South America and Africa is contributing to increased consumpion of avocados in Spain.

BRAZIL, December 20, 2002 -- This report provides U.S. exporters up-to-date information on the Brazilian market and import procedures. Although, it is responsibility of the Brazilian importers to provide Government of Brazil (GOB) documentation and detailed information on import regulations, gaining knowledge of the process is crucial for U.S. exporters to develop the market and best position U.S. products. In addition, this Exporter Guide also covers food distribution and areas to be developed.

EUROPEAN UNION, December 20, 2002 -- The Dec 16-17 Farm Council reached political agreement on the proposal for a regulation on additives for use in animal nutrition which will ban the four remaining antibiotic growth promoters authorized in feed (Flavophospholipol, Monensin sodium, Salinomycin sodium and Avilamycin) as of January 2006.

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