FAS Weekly Attache Report Digest
December 7, 2002

EUROPEAN UNION, November 29, 2002 -- EU Annual Report on US Trade Barriers * Enlargement * EU-Chile Agreement * Animal Welfare * Prestige Oil Spill in Spain * EU Prepackaging Sizes * USEU Reports * What's new on the DG Sanco website *

EUROPEAN UNION, November 28, 2002 -- Unexpected abundant milk supplies in the EU, due to mild weather conditions, retained animals and quota increases, result in growing intervention stocks of butter and SMP.

ISRAEL, November 28, 2002 -- In MY2001 the citrus industry continued to shrink as it had throughout the last decade. The economic importance of the industry is declining steadily. Production in MY2001 totaled 524 tmt. It is becoming clear that the future size of the citrus industry will be determined by local fresh demand.

SPAIN, November 28, 2002 -- Spanish avocado production during marketing year 2001 (Jun ‘01-Jul ‘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.

ALGERIA, November 28, 2002 -- The last adjustments in the customs duties and taxes could be the key to expanding accessibility for U.S. agricultural exports. U.S. suppliers can help fulfill demand for raw materials in the milling and dairy industries.

ALGERIA, November 28, 2002 -- In spite of the growth of the private dairy processing sector, Algerian imports of milk powder decreased in CY 2002 because of the high world prices in the first term of 2002, which generated a large use of stocks. Unfortunately, with U.S. prices generally higher than world prices, U.S. products were not attractive, and there were no dairy imports from the U.S. in 2002. With a new finance law in 2003, some changes may occur on custom duties and VAT.

VENEZUELA, November 28, 2002 -- Currently, the Venezuelan coffee sector is suffering the consequences of the dramatic fall in international prices. Added to that, Venezuelan coffee faces several domestic problems. One of them is the high level of stocks left over from the 2000 and 2001 coffee harvests. Another element distorting the market is coffee coming in from Colombia, which increases supply and leads to a fall in prices.

MEXICO, November 28, 2002 -- SAGARPA has revised slightly downward its corn production estimate, due to lower yields from Mexico’s 2002/03 fall/winter harvest. Also, private and official sources have revised downward the sorghum production estimate for the 2002 spring/summer harvest to 1.5 MMT (see MX 2122). This would presage well for U.S. sorghum imports, as they are not subject to a import permit requirement, unlike U.S. corn.

GUATEMALA, November 28, 2002 -- In October 25, 2002 the "Diario de Centro América" official newspaper published the elimination of the 501,820 MT quota and a 15% increase in the tariff for yellow corn.

MALAYSIA, November 29, 2002 -- Malaysia's CPO production dropped 1.3 percent to 1.24 MMT in October, 2002. Carry-over stock level rose modestly to 1.2 MMT at the end of October. PO exports decreased to 1.0 MMT in October. The average local CPO price rose from US$366/MT in October to US$412/MT in November.

EUROPEAN UNION, November 29, 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".

UNITED KINGDOM, November 29, 2002 -- This report gives details of trade shows and other marketing opportunities which may help US companies enter or increase sales within the UK market.

GERMANY, November 29, 2002 -- During the first eleven months of MY 2001/2002 (Oct/Aug) total German imports of fresh citrus fruit amounted to 985,535 MT, of which 1.8 percent or 17,894 MT originated from the United States. Grapefruit accounted for almost all of the U.S. citrus exports to Germany. Spain supplied 75 percent of all citrus imported into Germany. For MY 2002/2003 German citrus imports are expected to increase.

THAILAND, November 29, 2002 -- Despite a lack of new market demand, fragrant rice export prices declined only slightly due mainly to the government intervention program.

TURKEY, November 29, 2002 -- Turkish soybean production doubled to reach 90,000MT in MY2002, but remains insufficient to meet domestic demand for soybeans and products. During MY2001 Turkish soybean imports increased seventy-one percent to reach 654,000MT, soy oil imports increased two hundred and forty-three percent to reach 260,000MT but soybean meal imports declined thirty-five percent to 375,000MT. The United States continues to dominate the Turkish soybean and meal import markets with eighty-five and seventy-nine percent shares respectively. Soybean and product consumption in Turkey is expected to continue to grow.

SPAIN, November 29, 2002 -- Spain's 2002 grain harvest bounced back from last year's poor crop. The unirrigated winter crop exceeded 16 million tons, up 4+ million tons from the year before. Despite this production gain, imports have been pouring in as traders rush to buy cheap feed wheat from Russia and Ukraine before the EU changes its grain import regime at the beginning of 2003. U.S. grain will not benefit from this market. High prices are restraining Spanish purchases of high protein U.S. wheat and sorghum. U.S. corn continues to be banned from the market by EU regulations on GMOs. As a consequence, total U.S. grain sales to Spain in 2002/03 will reach only about 200,00 tons, the lowest level in decades.

ARGENTINA, November 29, 2002 -- Citrus exports in CY 2003 are expected to increase to 450,000 MT due to the sector's increased competitiveness in the wake of the devaluation of the Argentine peso. However, the new economic environment created by the peso devaluation has had various effects on citrus producers. Those with export capacity, namely, big farmers, packing houses and the processing sector, whose income is "dollarized" have benefited from the devaluation. While the small and medium sized farmers who do not have access to the export market and whose income is in Argentine pesos, have been hurt. Citrus export volume will end CY 2002 with a slight increase of 9000 MT over CY 2001 to reach 420,000 MT. Nevertheless, export values in dollar terms for CY 2002 will show a 30 percent drop with respect to CY 2001, due to lower prices.

ARGENTINA, November 29, 2002 -- Argentine exports of wheat and corn during September 2002

ARGENTINA, November 29, 2002 -- Argentine exports of oilseed,meal and oil during September 2002.

CHINA, PEOPLES REPUBLIC OF, November 29, 2002 -- China's 2002 citrus production should fall to 10.1 MMT as tangerine groves are in a down year of the cycle. Growers are becoming more interested in growing orange varieties. Consumption of fresh and processed citrus is increasing as purchasing power rises. Lower tariffs following WTO accession have spurred greater imports of concentrated citrus juice (CCJ).

AUSTRALIA, November 29, 2002 -- Australia's 2003/04 orange production is forecast at 535,000 MT, as the large 2002/03 crop is expected to lead to a smaller follow-on crop. Strong demand for Navel oranges will continue to favor this variety in new plantings. Orange exports in 2002/03 and 2003/04 are projected at 150,000 MT. The U.S. continues as the favored market for Australia's Navel exports. Orange juice imports are expected to be greater than domestic juice production in both 2002/03 and 2003/04. Brazil is Australia's dominant orange juice supplier.

JAPAN, November 29, 2002 -- From America's largest overseas market for food and agricultural exports as translated from Japan's mass media and food press. This issue includes: Years of weak economic activity have lead to changing consumer lifestyles and Japanese regional supermarkets are adapting; McDonald's presents a new food service outlet without hamburgers; An increase in Japan's meat import prices is attributed to the U.S. west coast dock strike; The popularity with pasta sauce continues to increase; the U.S. Meat Export Federation takes its "American Beef Town Hall Meeting" through five major cities and; an Aussie beef promotion targets kids in a photo contest.

MALAYSIA, November 29, 2002 -- No summary available.

MALAYSIA, November 29, 2002 -- No summary available.

MALAYSIA, November 29, 2002 -- No summary available.

VIETNAM, November 29, 2002 -- Although coffee prices (both domestic and export prices) have recovered slightly they remain below estimated costs-of-production. Vietnam's 2001/2002 (Oct-Sept marketing year) coffee exports decreased both in volume and export value compared with the 2000/2001 crop. Production in the 2002/2003 crop will decline further as coffee area continues to shrink and low yields are expected. Coffee trade data and revised PS&D table are provided.

INDONESIA, December 2, 2002 -- Production in MY01/02 reached approximately 6,160 thousand bags and it is expected to decline to 5,830 thousand bags in MY02/03. Low coffee prices, high cost of production and long dry season (El Nino) are blamed for the production decline and quality concerns. Exports of green coffee beans reached 4,700 thousand bags in MY01/02 and are forecast to decline to approximately 4,500 thousand bags in MY02/03.

DENMARK, December 2, 2002 -- 2002 grain harvest calculated at 8.8 million tons, down 10 percent from the previous year.

THAILAND, December 2, 2002 -- ** REVISION ** Modest increase in canned sweet corn and canned baby corn limits the export growth in MY 2002. Canned baby corn, moreover, is challenged by strong competition.

BELGIUM-LUXEMBOURG, December 2, 2002 -- This report highlights the latest developments in the Belgian retail food sector.

COTE D'IVOIRE, December 2, 2002 -- Post has revised upwards its estimate of the 2002/2003 coffee production due to favorable rainfall in 2002. Despite poor farm maintenance and management, coffee trees have been vigorous because of timely and well distribution of rains during tree flowering and throughout crop development period. Political instability since September 19, 2002 is expected to adversely affect labor supply for the coffee harvest. Green coffee exports fell in 2002 due to low export demand and depressed world market price.

NETHERLANDS, December 2, 2002 -- This report is an overview of the Dutch Retail Market.

ITALY, December 2, 2002 -- Italy is one of the more affluent countries in Europe, and its retail sector offers potential opportunities to businesses interested in entering a relatively underdeveloped yet lucrative market. The Italian food sector, a blend of tradition and modernity, is expanding but at a much slower pace than other European nations. Italians have a high standard for quality food.

MEXICO, December 3, 2002 -- Mexican orange and grapefruit production for MY 2002/03 is forecast to be lower compared to MY 2001/02 production, due to dry weather conditions. Lime production is forecast to increase slightly for MY 2002/03, due to more trees coming into production. FCOJ production is forecast to decrease for MY 2003, due to less available fru

BURMA, December 4, 2002 -- As of this report, border trade figures are now included in totals. The beans and pulses exports table has been revised to reflect this change. The revised figures begin in July 2001 and carry forward into the present report. Future reports will continue reporting an aggregated number.

INDIA, December 4, 2002 -- *Noted farm scientist calls for agri-biotech policy*, *Decision soon on fresh trials for GM mustard*, *Over 100,000 acres covered under Bt cotton*, *India ranks fifth in retail marketing*, *Uniform tax on booze likely*, *Export prices of rice and wheat hiked*, *Plantation sector urged to utilize WTO safety shields*, *Pant warns on non-tariff trade barriers*, *India should be the voice of developing world*.

INDIA, December 4, 2002 -- GOI raises tariff values for palm oil and products effective November 26, 2002.

CANADA, December 4, 2002 -- "What's New, Eh?" * Canada and Cairns Group Call for Complete Elimination of Export Subsidies * Strong Livestock Sector Sends Net Cash Income Higher in 2001 * Potato Production up Again * Proposal to Expand Irradiated Food List * CWB Reduces Grain Export Numbers * CWB Increases Initial Payments for 2002/03 Crop Year * Tentative Settlement for Port of Prince Rupert Docks * CFA Tells U.S. to Call off Trade Dogs * CAFTA Gets New President; Former Executive Director Returns * B.C. Pine Beetle Epidemic Spreads * United Opposition Demands Softwood Lumber Aid * Canada Connect Program

EUROPEAN UNION, December 4, 2002 -- Biotechnology * Enlargement * Decoupled Payments to EU farmers * Hygiene Package * Zoonoses * State Aid Rules for TSE * EU Plant Health Regime * Recovery Plan for Cod * Pesticides * Feed Additives * Upcoming Meetings * What's New on our Website * What's new on the DG Sanco Website *

CHILE, December 4, 2002 -- Another expansion in output and exports of avocados are expected this year as a result of good weather and a larger planted area coming into production.

SAUDI ARABIA, December 3, 2002 -- The Saudi Ministry of Commerce has agreed to accept health certificates issued by state departments of agriculture instead of the previous requirement that the certificates must be issued bt the Federal Government agency such as USDA and FDA.

EGYPT, December 6, 2002 -- Egypt Exported 257,000 MT of oranges in 2001/2002, mostly to Saudi Arabia and other Arab countries in the region.

AUSTRALIA, December 5, 2002 -- Widespread drought has sharply reduced Australia's 2002/03 wheat and barley harvests, with expected declines of 56 percent and 53 percent, respectively, from year-earlier levels. Reduced wheat and barley output is expected to sharply curtail exports. The drought and shortages of irrigation supplies are expected to lead to sharp production declines for cotton, rice and sorghum. Exports of these commodities are also expected to fall sharply. An expected 300,000 MT of grain are expected to be imported over the next three months to alleviate feed grain shortages. ABARE released revised commodity projections on December 2, 2002.

KOREA, REPUBLIC OF, December 5, 2002 -- Korea's MY 2002/03 Unshu orange crop (Korean mandarins) is estimated at 636,000 MT, a two-percent decrease from the previous year. Plans to implement a citrus check-off program are unlikely to be realized in MY 2002. Producers are concerned Chilean table grape imports under a new FTA will compete with Korean citrus production.

JAPAN, December 5, 2002 -- On November 21, the Food Agency (FA) conducted its fifth Simultaneous Buy and Sell (SBS) tender for feed wheat and barley during Japanese fiscal year 2002. The FA contracted 3,025 metric tons (MT) of wheat and 180,000 MT of barley. According to trade sources, all of the wheat will be purchased from China and at least 56,000 MT of barley will be purchased from either Ukraine or Germany.

JAPAN, December 5, 2002 -- On November 26, the Food Agency (FA) of the Ministry of Agriculture, Forestry and Fisheries (MAFF) conducted its fourth Ordinary Minimum Access (OMA) rice tender for the Japanese Fiscal Year 2002 (April 2002 - March 2003). Of the total 138,790 metric tons (MT) of contracted foreign rice, U.S. rice accounted for 69,000 MT (49.7 percent). Rice not contracted under the SBS tenders is expected to be rolled over into the remaining two OMA tenders.

JAPAN, December 5, 2002 -- Because of potential human health risks of di (2-ethylhexyl) phthalate (DEHP) as an endocrine disrupter, effective August 1, 2003, the Japanese government will ban the use of polyvinyl chloride (PVC) which containes DEHP for food packaging.

JAPAN, December 5, 2002 -- This fall, fierce competition forced Israel to reduce expected Japanese imports of Sweeties. Competition came from Sunkist's Oroblanco, which successfully debuted in the Japanese market this year, and earlier high-quality harvests of Japanese Unshu mikans (tangerines) and Florida grapefruits and Florida grapefruit exporters announced their plan to export 12 million cartons of grapefruit in 2002/03. Traders are concerned about weak demand for the large crop of small sized U.S. navels oranges, however. Japanese imports of concentrated OJ declined 16 percent in 2001/02, a trend that is expected to continue unless alternative supplies are found for Brazilian sourced product. While the volume of U.S. imports of OJ did not increase, imports of U.S. grapefruit juice did increased 20 percent.

INDIA, December 5, 2002 -- Exports helped the GOI to contain grain stocks build-up. Nonetheless, large stocks should prompt the government to continue its subsidized grain export program.

BULGARIA, December 5, 2002 -- The Bulgarian poultry industry saw stable development over the last 4 years with growing production. Local demand and consumption are increasing due to growth in the retail and food service sectors. Total imports continue to increase with the majority of imports in turkey meat used both for meat processing and direct consumption. First-half-of-2002 import data show record poultry imports (January-June). The United States continues to be a leading poultry supplier and good export opportunities are forecast in 2003.

FRANCE, December 5, 2002 -- In 2002, French oilseed production totaled 4.99 million MT, up from 4.77 million MT in 2001, mainly due to higher rapeseed yields. Production included 3.29 million MT rapeseed, 1.51 million MT sunflowerseed, and 191,000 MT soybeans. In 2001/02, French consumption of soybean meals increased by 7 percent, soybean meals replacing meat and bone meals banned in animal feed rations. As a result, soybean imports, crush and imports of meals increased significantly. In MY 2001/02, Brazilian soybeans remained the market leader with a 48 percent share, but the market share of U.S. soybeans increased to 38 percent.

GREECE, December 5, 2002 -- The 2002/03 citrus forecast shows recovery from weather damage last year. Fresh orange production in 2002/03 is forecast 8% higher than last year. Fresh lemon production in 2001/02 was disproportionately hurt by weather, but it will not recover as readily as farmers opt for replacing trees with tangerines or non-citrus tree crops. Tangerine production should reach 85,000 MT and lemons should reach 100,000 MT in 2002/03.

BRAZIL, December 5, 2002 -- Total Brazilian MY 2003/04 orange crop is forecast at 405 Mbx, down 9 percent from current crop, assuming normal weather conditions prevail. The Sao Paulo commercial area should amount for 320 Mbx, an 11 percent reduction from the current crop (360 Mbx). Major reasons that should affect the expected reduction in Sao Paulo include the drop of the flowers and fruits after the first blossoming due to dry and hot weather in October, the off-year of the biennial cycle of the Hamlim and Valencia varieties, the expected decrease in the number of bearing trees and disease related problems such as canker and CVC. Total FCOJ production for MY 2003/04 is projected at 1.086 mmt, 65 Brix, down 220,000 mt from the current season, due to lower expected availability of fruits for processing. MY 2002/03 FCOJ exports are estimated at 1.256 mmt, 65 Brix, a 17 percent increase from the previous MY.

JAMAICA & DEP, December 5, 2002 -- This is an update of the post report on the market for consumer-ready food and beverage products in the retail sector in Jamaica.

ISRAEL, December 3, 2002 -- The MY2001 avocado harvest totaled 83 thousand tons of which 46 thousand tons were exported. Shipments to local market were 46 percent higher than in previous year. Total area planted to avocado is 5,000 hectares and is expected to remain at that level due to shortage of water and increasing competition in Europe.

EUROPEAN UNION, December 6, 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".

PHILIPPINES, December 6, 2002 -- President Gloria Macapagal-Arroyo recently announced the replacement of Department of Agriculture (DA) Secretary, Leonardo Q. Montemayor by Luis P. Lorenzo Jr., the current presidential adviser on job creation as well as chairman of the Philippine Rice Research Institute (PhilRice).

JAPAN, December 6, 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.

INDONESIA, December 6, 2002 -- Indonesian cotton imports for MY01/02 totaled 513,000 MT or 2.36 million bales, down 10 percent from MY00/01. MY02/03 imports are estimated to increase slightly to 520,000 MT. The U.S. market share for cotton in Indonesia reached 35 percent in MY01/02, matching Australia, which historically has been the largest supplier. Cotton consumption remains stable at 500,000 MT or 2.3 million bales for MY01/02 and MY02/03. Major industry concerns include the overall economic situation, the export market climate and competition from China.

INDONESIA, December 6, 2002 -- A new Presidential Decree allows the imposition of "quarantine" fees on a wide range of agricultural commodities and products for a wide range of services. The proposed fees range from reasonable to outlandish and in some cases could add significant costs to U.S. products. The proposal appears to be WTO inconsistent because different fees would be levied on the same products depending on if it is being imported, exported or shipped within the country. Implementation on this decree is awaiting Ministry of Agriculture implementing regulations. It is unclear when such regulations might be issued or when they will be notified to the WTO.

INDIA, December 6, 2002 -- Post's 2002/03 cotton production estimate has been raised to 14.4 million bales (170 kg) on higher than originally estimated planted area.

THAILAND, December 6, 2002 -- Export prices declined in response to the increasing supplies of new crop, but the current prices are still too high for foreign buyers.

MOROCCO, December 6, 2002 -- Fresh citrus production is expected to be up this year which, combined with an anticipated higher quality, is expected to result in higher exports.

BOSNIA-HERCEGOVINA, December 6, 2002 -- Bosnian poultry consumption has been on the rebound for several years. Although there has been a recent growth in domestic production, Bosnian producers are hindered by a lack of domestic processing facilities. There is a shortage of poultry meat for processing, especially mechanically deboned meat. This report outlines the Bosnian poultry sector, import rules, and market opportunities.

ITALY, December 6, 2002 -- Total Italian citrus output for the 2002/2003 marketing year is forecast at 2.735 million tons, or 11% less than in 2001/2002. The significant decline is due to extremely unfavorable weather conditions that lowered fresh orange production by 15 percent. In 2002/2003 Italian orange juice production is forecast to decline due to a reduced supply of fruit for processing. Italian citrus exports continued the decline seen since 2002/2001. Even with large domestic supplies such as in 2001, Italian citrus exports are becoming more and more marginal because of the industry's inablity to keep pace with competitive pressures.

COTE D'IVOIRE, December 6, 2002 -- Government of Cote d'Ivoire has announced a new cotton producer price for the 2002/2003 marketing year of 180 F CFA/kg for first grade cotton. The 2002/2003 cotton marketing has not started due to political instability and the occupation by the mutiny soldiers of the northern half of the country which embraces the cotton producing areas since September 19, 2002.

MEXICO, December 4, 2002 -- Farm Subsidies Program Of Rich Countries Is “Evil”; Little Headway Made In Mexico-U.S. Binational Meeting, Bush Asks For Patience On Migration Accord; Fox Farm Package Lacks Novelty, Says Opposition; Fox Raises Joint Work On Agriculture; U.S. Clears Some Mexican Cantaloupe Farmers To Resume Shipments; GOM Not To Propose Renegotiation Of NAFTA Ag Chapter; Mexico States That U.S. WTO Proposal Is Too Ambitious; SAGARPA Claims U.S. Beef To Be Inferior; Congress Sees Increased Migration To U.S. In 2003; Opposition Party To Support Delayed Implementation Of Ag Chapter Of NAFTA; Opposition Party Introduces Bill To Renegotiate NAFTA Ag Chapter; Congress Decries Food Dependency On U.S.; Farmer Groups, Congress To Request Delay In 2003 Ag Tariff Repeal; Farmers’ Groups Concedes That Mistakes Were Made.

MEXICO, December 6, 2002 -- Early official production estimate for the 2003 spring/summer grain, cotton and soybeans harvests are lower than year ago. Post continues to maintain its previous forecast for MY 2002/03.

CROATIA, December 4, 2002 -- In 2002, weather conditions were favorable for grain production and it is expected that Croatia will export wheat and of corn. The export destination of the wheat is uncertain as the government attempts to sort out a potentially WTO-inconsistent export subsidy policy. Corn will likely be exported to Bosnia- Herzegovina, Albania, Greece and Italy. Fall rains made it difficult to plant winter wheat and policy changes in 2003 will further decrease wheat area.

CHINA, PEOPLES REPUBLIC OF, December 6, 2002 -- China's food retail sector continues to grow and change as more hypermarkets and convenience stores open across the country. Hypermarkets are now present in all major and most second-tier cities.

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