COMMITTEE ON COMMODITY PROBLEMS

Sixty-second Session

REPORT OF THE FIRST SESSION OF THE SUB-GROUP ON TROPICAL FRUITS

Pattaya, Thailand, 25-28 May 1998

Table of Contents

I. INTRODUCTION

II. ECONOMIC AND TRADE ISSUES

III. INTERGOVERNMENTAL ACTION

IV. ACTIVITIES IN OTHER ORGANIZATIONS

V. DATE AND PLACE OF THE SECOND SESSION

VI. VOTE OF THANKS

APPENDIX 1 - List of documents


I. INTRODUCTION

1. The Sub-Group on Tropical Fruits held its First Session in Pattaya, 25 to 28 May, at the kind invitation of the Government of the Kingdom of Thailand. The session was attended by 170 delegates from the following FAO member countries: Bangladesh, Brazil, Cameroon, Chile, China, Côte d'Ivoire, Cuba, Egypt, Fiji, France, Honduras, Kenya, Malaysia, Netherlands, Peru, Philippines, Spain, Switzerland, Tanzania, Thailand, United Kingdom and Viet Nam. In addition, observers from Brunei Darussalam and the following organizations attended: International Trade Centre UNCTAD/WTO, Common Fund for Commodities, Confederation of Importers and Marketing Organizations in Europe of Fresh Fruit and Vegetables (CIMO), European Union of the Fruit and Vegetable Wholesale Import and Export Trade (EUCOFEL) and the International Network for the Improvement of Banana and Plantain (INIBAP). A list of delegates and observers was distributed as document CCP: SG TF 98/Inf.2.

2. The Session was inaugurated by the Minister for Agriculture and Cooperatives of Thailand, H.E. Mr Pongpol Adireksarn. He welcomed the delegates to Thailand and expressed the wish of his government to cooperate with the global community in creating a more orderly global trading environment for tropical fruits, and he also indicated the willingness of his Government to host the TFNET headquarters in Thailand.

3. Mr S. Hadiwigeno, Assistant Director-General and Regional Representative for Asia and the Pacific welcomed the delegates on behalf of the Director-General of FAO, Mr Jacques Diouf. He expressed warm appreciation to the Government of the Kingdom of Thailand for hosting the Session.

4. The Sub-Group elected Mr Charern Sukhanantapong, Inspector-General, Ministry of Agriculture and Cooperatives (Thailand) as Chairperson; Mr Gerard Bosma (Netherlands) as first Vice-Chairperson and Messrs Atékébrai Abel Vangah (Côte d'Ivoire) and Emilio Farrés Armenteros (Cuba) as second Vice-Chairpersons.

5. The Provisional Agenda CCP: SG TF 98/1 was adopted by the Sub-Group.

II. ECONOMIC AND TRADE ISSUES

A. CURRENT MARKET SITUATION AND SHORT-TERM OUTLOOK

6. The Sub-Group discussed this item with the assistance of background document CCP: SG TF 98/2. It also received with interest reports on tropical fruits from Thailand (CCP: SGTF 98/CRS.2), Malaysia (CCP: SG TF 98/CRS.11), Honduras CCP: SG TF 98/CRS.4), Côte d'Ivoire (CCP: SG TF 98/CRS.13) and Tanzania (CCP: SG TF 98/CRS.12); and the ITC's Market News Service.

7. On statistical issues, the Sub-Group recommended that the Secretariat continue to develop and modify the questionnaire issued under its auspices to facilitate ease of response by countries. In addition, the Sub-Group encouraged each member country to respond to the questionnaire in full and in a timely manner.

B. MEDIUM-TERM SUPPLY AND DEMAND PROSPECTS

8. The Sub-Group considered the socio-economic factors underpinning supply and demand trends for fresh and processed tropical fruits with the assistance of documents CCP: SG TF 98/3 and CCP: SG TF 98/CRS.1. In addition, with the help of document CCP: SG TF 98/4 the Sub-Group reviewed the potential for import growth of tropical fruits in the world market to 2005. The Sub-Group stated that the studies provided a generally useful framework for the development of marketing strategies. However, it requested the Secretariat to extend its research to new markets, particularly China, and to undertake analysis also for other fruits such as durian, lychees, longan and mangosteen, bearing in mind available resources. On the supply side, the Sub-Group referred to the conclusions of the World Food Summit and stressed the contribution that the tropical fruits sector could make to smallholders' food security. It therefore requested the Secretariat to undertake analysis on the linkages between production, consumption and export earnings and food security.

9. The Sub-Group was optimistic in its review of the short and medium-term prospects for trade in both fresh and processed tropical fruits. However, to promote a dynamic future for tropical fruits it cautioned that production had to be better organized not only for the improvement of quality, but also to ensure competitiveness and efficiency. On the demand side, apart from economic factors such as income, tropical fruit prices and pricing relationships within the total fruit market (tropical, temperate and other fruits), the improvement of packaging, transportation, and market promotion were specific requirements for the expansion of markets for tropical fruits.

C. POLICY DEVELOPMENTS

10. The Sub-Group reviewed policy developments with the assistance of document CCP: SG TF 98/6. The Sub-Group agreed that post-Uruguay Round tariff reductions on fresh tropical fruits were not likely to have a major impact on global trade as duties were already generally low in major markets. However for some countries preferential advantages would be eroded, and adjustments might therefore be needed to maintain market shares. The harmonization of sanitary and phytosanitary (SPS) measures was expected to benefit trade in fresh tropical fruits in the longer run. However, exporting countries would need to adapt their quality control systems and infrastructure to meet evolving market requirements.

11. The Sub-Group considered phytosanitary issues concerning imports and exports of tropical fruits in greater detail with the assistance of document CCP: SG TF 98/6. The Sub-Group noted that where plants or plant products for export had certain pest(s) associated with them, the exporting country needed to put into place systems to meet phytosanitary import requirements. It also noted that the complementary relationship of the International Plant Protection Convention (IPPC) and the Sanitary and Phytosanitary (SPS) Agreement would facilitate trade. The Sub-Group further noted that the reduction in availability and acceptance of pesticides, particularly the phasing-out of methyl bromide as a fumigant for quarantine treatments, would clearly have strong implications for trade in tropical fruits. Seeing that initiatives todate toward research for alternatives had been extremely limited, and recognizing the urgent need and substantial benefit to be obtained from relatively small investments into identifying alternatives, the Sub-Group requested the Secretariat to initiate action which would assist efforts to investigate alternatives for methyl bromide.

12. The Sub-Group considered food safety issues under the SPS Agreement with the assistance of document CCP: SG TF 98/7. The Sub-Group noted the current status, benefits and the major issues regarding food safety standards and regulations for tropical fruits. It was informed that the Codex Alimentarius Commission (CAC) played a significant role in formulating standards relating to the quality and safety of foodstuffs including tropical fruits. The Agreements on the Technical Barriers to Trade (TBT) and SPS had given a new direction to international food trade, with Codex-recommended standards providing a de facto international reference for the arbitration of trade disputes as well as for harmonizing national standards. The Sub-Group recognized the need to have total "mutual recognition" and "equivalence" of requirements. On the nutritional value of tropical fruits, the Sub-Group noted positive findings, particularly the strong association between consumption of fruits and vegetables generally and prevention and control of micronutrient malnutrition.

13. The Sub-Group reviewed the key elements that exporting countries should take into account when establishing SPS standard and quality control systems. Three types of quality control systems were presented together with their advantages and disadvantages. The Sub-Group concluded that it was critical for exporting countries to analyze long-term world market trends and conduct cost-benefit analysis to determine the quality control system best suited to each country.

14. The Sub-Group was informed that document CCP: SG TF 98/CRS.10 was not an authorized paper for the Session and therefore had been withdrawn.

III. INTERGOVERNMENTAL ACTION

A. TROPICAL FRUIT NETWORK (TFNET)

15. After reviewing document CCP: SG TF 98/8 and the proposals of Malaysia, Thailand and the Philippines, the Sub-Group considered that many issues would have to be resolved before the Tropical Fruits Network (TFNET) could be launched. To facilitate and expedite the work, an informal Working Group of 14 countries met to define the views of interested members concerning (i) organization and governance; (ii) drafting of the constitution and by laws; and (iii) location of the headquarters of TFNET.

16. The report of the Working Group was circulated to the Sub-Group as document CCP: SG TF 98/CRS.15.

17. The Sub-Group noted that the Working Group had decided to launch the network, subject to the following guidelines:

B. COMMON FUND FOR COMMODITIES

18. The Sub-Group expressed appreciation to the representative of the Common Fund for Commodities (CFC) for the information provided concerning the objectives and requirements of the CFC, and the possibilities for the Sub-Group to be designated as an International Commodity Body (ICB). The Sub-Group noted that pending designation, the Fund would be prepared to examine and comment on project concepts or proposals that the Sub-Group might wish to sponsor.

19. The Sub-Group considered that it should seek to obtain ICB status with the CFC in its own right. It therefore recommended that the Secretariat apply to the CFC for ICB status on its behalf. In addition, the Sub-Group agreed on a statement of its strategy for the overall development and improvement of the tropical fruits sector, as outlined in document CCP: SG TF 98/11, and its addendum. The Sub-Group requested that amendments to the statement be introduced to reflect in particular the development of production and trade, sustainable livelihood, poverty alleviation, human resource development and environmental considerations. The strategy statement subject to these modifications should be submitted to the CFC.

20. The Sub-Group also agreed that a mechanism was necessary in order to allow project work to continue in the interim between its regular sessions. It therefore recommended that the bureau should act on its behalf for the submission of project proposals to the CFC and related matters.

21. The Sub-Group endorsed the project concept "African Fruit Fly Initiative" presented in document CCP: SG TF 98/12. However, it was agreed that the proposal needed to be further developed to identify those components that might be submitted for funding consideration by the CFC.

IV. ACTIVITIES IN OTHER ORGANIZATIONS

22. The representative of the International Trade Centre UNCTAD/WTO informed the Sub-Group of the activities of the ITC, particularly the Market News Service (MNS). Focusing on tropical fruits, he described how information was collected, analyzed and transmitted to the various receivers. He informed the Sub-Group of the creation by ITC of a Tropical Fruit Network on the Internet and took note of the request of a delegate for the creation of an ASIAN-MNS if funds permitted.

23. The representative from the European Union of the Fruit and Vegetable Wholesale Import and Export Trade (EUCOFEL) informed the Sub-Group of the activities of his organization. He indicated that he was optimistic about the future of tropical fruits trade in Europe, but stressed the need for maintaining market quality as well as investigating ways of reducing transportation costs, the highest cost component in the marketing of tropical fruits.

V. DATE AND PLACE OF THE SECOND SESSION

24. The Sub-Group recalled the decision of the 61st Session of the Committee on Commodity Problems that the Sub-Group on Tropical Fruits should be merged with the Intergovernmental Group on Bananas into one group with separate sub-groups dealing with bananas and tropical fruits. The Sub-Group therefore agreed that its Second Session should take place at an exact time and place to be determined by the Director-General in consultation with the Chairpersons of the Sub-Group on Tropical Fruits and of the Intergovernmental Group on Bananas.

VI. VOTE OF THANKS

25. The Sub-Group expressed appreciation to the Government of the Kingdom of Thailand and particularly to the Ministry of Agriculture and Cooperatives for the hospitality provided to delegates and for the opportunity to learn more about the tropical fruits industry in Thailand.

APPENDIX 1
List of documents

CCP: SG TF 98/1

Provisional Agenda

CCP: SG TF 98/2

Current market situation and short-term outlook

CCP: SG TF 98/3

Supply and demand prospects

CCP: SG TF 98/4

Medium-term outlook

CCP: SG TF 98/5

Recent policy developments in international trade of tropical fruits

CCP: SG TF 98/6

Trade in tropical fruit: Phytosanitary issues concerning imports and exports

CCP: SG TF 98/7

Tropical fruits: Food safety issues under the SPS measures of the World Trade  Organization

CCP: SG TF 98/8

The Tropical Fruits Network

CCP: SG TF 98/9

Extract from the Report of the Fifteenth Session of the Intergovernmental Group on Bananas, Rome, 7-9 May 1997

CCP: SG TF 98/10

Terms of reference and rules of procedure of the Sub-Group on Tropical Fruits

CCP: SG TF 98/11

Possible priorities of the Sub-Group on Tropical Fruits

CCP: SG TF 98/11 (Addendum)

Possible priorities of the Sub-Group on Tropical Fruits

CCP: SG TF 98/12

Project Concept: African fruit fly initiative

Information Documents

CCP: SGTF 98/Inf.1

Information Note on Arrangements

CCP: SGTF 98/Inf.2

List of Delegates and Observers

Conference Room Series Documents

CCP: SG TF 98/CRS.1

Demand prospects for processed tropical fruits

 

CCP: SG TF 98/CRS.2

Supply and demand prospects for tropical fruits in Thailand

 

CCP: SG TF 98/CRS.3

Supply and demand prospects for tropical fruits in Sub-Saharan Africa

 

CCP: SG TF 98/CRS.4

Supply and demand prospects for tropical fruits in Latin America

 

CCP: SG TF 98/CRS.5

Tropical fruit demand in the European Union

 

CCP: SG TF 98/CRS.6

Tropical Fruits Network: The Malaysian proposal

 

CCP: SG TF 98/CRS.7

Tropical Fruits Network: The Philippine proposal

 

CCP: SG TF 98/CRS.8

Tropical Fruits Network: The Thai proposal

 

CCP: SG TF 98/CRS.9

Statistics questionnaire

 

CCP: SG TF 98/CRS.10

WITHDRAWN

 

CCP: SG TF 98/CRS.11

The fruit industry in Malaysia: Present status and future outlook

 

CCP: SG TF 98/CRS.12

Country Report - Tanzania

 

CCP: SG TF 98/CRS.13

SPS standards under WTO

 

CCP: SG TF 98/CRS.14

Country Report - Côte d'Ivoire

 

CCP: SG TF 98/CRS.15

Report of the Informal Working Group of the Sub-Group on Tropical Fruits

 

CCP: SG TF 98/CRS.16

Presentation by the Common Fund for Commodities

 

CCP: SG TF 98/CRS.17

Perspective and prospects of fruit crops in Pakistan