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Canada poised for changes in the produce marketplace

With an overhaul of its regulatory system for fresh produce imminent, the Canadian marketplace soon will be undergoing more changes than at any time in the past 20 years.

At least that was the view of Fred Webber, chief executive officer and president of the Ottawa-based Dispute Resolution Corp., which can mediate produce sales conflicts among the North American Free Trade Agreement partners of Canada, the United States and Mexico.

He said the licensing change alone takes on a whole new meaning in Canada and it will be much easier for U.S. and Mexican trading partners to check the validity of the Canadian firms with which they do business.

Webber was part of three-person panel discussion about the Canadian produce industry at the United Fresh convention in Chicago, June 10-12. Also discussing the new regulations, which have not been finalized yet, and what they mean were Shelley Ippolito, director of the Destination Inspection Service for the Canadian Food Inspection Agency, and Canadian Produce Marketing Association President Ron Lemaire.

The proposed regulations have gone through several levels of vetting as well as the initial comment period, so these experts appeared to be fairly confident that their impressions of the final regulations are accurate.

Ippolito said it appears that every company importing fruits or vegetables or preparing them for export between countries or between Canadian provinces will have to be licensed under the new regulations.

In addition, all licensees will have to be members of the DRC. Webber said that shippers doing their due diligence will be able to check to make sure a buyer has a license, and is a member in good standing of the DRC. But even if a seller does not do its due diligence, it will be very difficult to sell to a non-licensed company because the product will be prohibited from entering Canada if it is not headed to a licensee.

“You just can’t sell it to whoever,” said Webber. “You will have to sell it to someone legally.”

With regard to the DRC, he said that anyone will be able to appeal to the DRC for help in a slow-pay situation, but still only DRC members will be able to participate in the dispute resolution piece.

So that means there is still a very viable business reason for countries outside of Canada doing business with Canadian companies to have a DRC membership.

Ippolito also discussed the revitalized Destination Inspection Service, which has gone through an overhaul over the last several years. Today, that government agency provides timely inspections on conditions, quality and temperature, and it can also conduct custom inspections. She said the CFIA inspectors operate on a 24/7 time schedule and they produce clear and transparent inspection reports that are available digitally.

Webber plugged the program, telling U.S. and Mexican shippers to make sure they designate a DIS inspection when asking for one from the receiver. He said a receiver can use a private inspector but it must be with “informed consent “from the shipper, and he indicated that it might not be as accurate.

“Please, please, please make sure, when there is a problem, you get a DIS inspection,” urged Webber.

Lemaire also discussed what he called the “massive change” in the Canadian produce marketplace. He also complimented the government in accomplishing these changes “lightning fast.”

With more transparency and a better situation, the CPMA executive said there are great opportunities for doing business in Canada. He called it a very diversified country with 37 million resident of which 6.5 million are immigrants. Canadian’s immigrant population continues to grow, and, as in the United States, ethnic populations tend to be very big consumers of fresh produce.

And also like the United States, the Canadian population is getting older, which is another driver of increased produce consumption. He said Canadians are adventurous eaters with a recent survey stating that 77 percent of the respondents had eaten a new produce item in the past year.

Lemaire said the changes in the regulations, while significant, should not be traumatic for those exporting product into Canada. He indicated that CPMA and other industry representatives worked with the regulators to make sure the regulations were not onerous.

Speaking specifically about food-safety requirements, Lemaire said they are outcome-based, relying on a heavy dose of science and risk analysis.

“The proof will be in the pudding,” he said, but clearly indicated that he is very optimistic.

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Australian grapes poised to enter Korea and Japan

Australian grapes poised to enter Korea and Japan

The export of Australian grapes started a couple of weeks ago with air freight to Thailand and Hong Kong, the main volumes will come in in the next couple of weeks.

The early varieties are well under way and the main varieties Thompson and Crimson seedless, Crimson will start in 3-4 weeks along with Red Globe shortly after. Jeff Scott, CEO of the Australian Table Grape Association, says the quality is excellent this season, “When the Australian grapes hit the market they commanded a good price. This is also helped by the exchange rate which is giving around 15% more returns than last year.”

He goes on to say that volumes are looking good especially for Thompson’s and Crimson volumes are around average.

Australia is looking forward to entering new markets this year, FTA’s with Korea is almost complete and Japan access should occur soon after. Scott expects exports to Korea to start mid February if all the paper work is completed.

According to Jeff the FTA’s are vital for building market share in these countries, also if they come through then Australia will be able to export to every country in the world.

He expects that within 3-5 years Australia will be sending 10,000 tonnes of grapes into Korea. The consumers in Korea and Japan prefer the very sweet varieties and Australian exporters will be targeting the premium market with their high quality Crimson and Thomson seedless varieties. Jeff adds that these countries are also starting to show a taste for the white grape varieties.

Publication date: 1/10/2014
Author: Nichola Watson

Peru poised to become larger player in U.S. avocado market in coming seasons

Peruvian avocados first gained access to the U.S. market late in the season in 2011, making 2013 the third year but the second full season that avocados from Peru have been available to buyers in the United States.

The Peruvian season runs from June through September, corresponding to the peak of the California avocado season, and also to the peak consumption months for avocados in the United States.

This year the Peruvian Avocado Commission expects a total volume of between 40-45 million pounds of avocados from Peru to come into the U.S. market, which is only a small portion of the aggregate total volume of about 1.7 million pounds of avocados from all sources the industry expects to be consumed in the United States in 2013.

010-GlobalAvos-PeruAvoA Hass avocado grove in Peru. (Photo courtesy of Peruvian Avocado Commission)But in coming seasons, “Peru will continue to increase its presence in the U.S. market,” Xavier Equihua, CEO of the Peruvian Avocado Commission, told The Produce News.

Noting the continued double-digit growth of avocado consumption in the U.S., Equihua, who is also CEO of the Chilean Avocado Importers Association, emphasized that “there is room for everybody.”

There is a potential in 2014 for Peru to export 90-100 million pounds of avocados to the United States, he said. “There are young trees beginning to bear fruit that will be ready next year.”

He also expects large sizes again, as is the case this year, because “young trees usually bear large fruit and that is the case with Peruvian fruit.”

Peru has “an incredible potential to become a very large source for avocados to the U.S.,” he said.

Mexico, which has year-round production, is and will always continue to be “by far the largest” supplier of avocados to the U.S. market, Equihua said. “We all know that. But everything is complementary, and there is room for all of these sources.”

Peru has “something that no other foreign origin has,” he said, and that is peak volume during the peak consumption periods in the United States. “I am not saying that Mexico is not a producer of avocados during that period, but their peak production really is not during the July and August periods.” Only California and Peru are at their peak during the peak consumption months.

As U.S. demand for avocados continues to grow, California experiences fluctuations in volume from one season to the next and cannot always meet demand, Equihua pointed out. “You will always have these kinds of fluctuations where you have large summer crops from California and then smaller crops from California, and Peru will make an excellent source for filling those gaps.”

Per capita consumption of avocados in the United States. “is going to continue to increase, and having other origins like Peru in the market gives retailer choices, which is very important,” he said. “Retailers don’t want to be stuck with one origin.”

Nor is Peru relying just on the U.S. market as an outlet for its expanding production. “Their primary market right now continues to be the European Union, and the U.S. is a secondary market right now,” Equihuia said. But the United States “has great potential to become as large or even larger than the European Union” as a market for Peruvian avocados.

“Peru is also looking at diversifying its portfolio,” he continued. Notably, Chile “for sure will be open next year for Peruvian fruit, and there is no doubt that Peru will export avocados to Chile” during the spring and summer months when Chile’s own production is low. Chile is “a great market for avocados,” with per capita consumption second only to Mexico.

In the United States, as consumption continues to climb, there will “be a need for sources like Peru to continue exporting more,” Equihua said, and he expects to see other producing countries to come into the market as well.

With a relatively small volume of Peruvian avocados in the U.S. market at present, the Peruvian Avocado Commission has a fairly small budget, so its marketing activities are limited.

“Our marketing activities this year are very classic,” Equihua said. “It is retail-focused program based on offering retail tags and offering demos,” and targeting East Coast markets. The commission is continuing in its campaign this year with the same theme used in 2012, which is “Monumental Taste.”

A June 13 press release from the commission stated that “the integrated marketing effort is designed to raise consumer awareness and support the product at retail via a robust media buy that includes mobile billboards near retail outlets, radio, in-store signage and store demos. This year’s efforts will focus on key markets including New York, Philadelphia, Baltimore and Boston and is intended to put a solid foundation in place for enhanced efforts in the following years.”

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