COMMITTEE ON COMMODITY PROBLEMS

INTERGOVERNMENTAL GROUP ON CITRUS FRUIT

12th Session

Valencia, Spain, 22-25 September 1998

CURRENT SITUATION AND MARKET OUTLOOK FOR CITRUS FRUIT IN EASTERN EUROPE AND THE AREA OF THE FORMER USSR

I. INTRODUCTION

1. At its Eleventh Session, the Intergovernmental Group on Citrus Fruit, after reviewing the demand prospects for fresh citrus fruit, agreed "that there was potential for demand expansion in markets of Eastern Europe and the area of the former USSR". The Group concluded that continued economic growth was a prerequisite for further expansion of citrus markets in these countries. It was concluded that the Secretariat should attach high priority to monitoring the market situation and outlook for citrus fruit and products in these countries.

2. For this reason, a first attempt has been made to analyse market developments and outlook for citrus fruit in these countries. Poland and the Russian Federation constitute the two most important citrus markets among those covered in this report. While the Russian Federation accounted for about 1.5 percent of world citrus imports in 1992, by 1996 the figure reached 5.4 percent. Between 1992 and 1996 the Russian Federation enjoyed an import growth rate of 39 percent. Poland imported 3.3 percent of world citrus imports in 1992, but in 1996 that percentage had only reached 3.5 percent.

3. Neither of these important potential emerging markets have come up to expectations as per caput consumption remains low, particularly in the Russian Federation, at 3.0 kg in 1996, while it has barely grown in Poland, where it now stands at 7.62 kg per caput. However, the situation is certainly not to be viewed pessimistically. Citrus marketing chains in both countries are developing, new groups with more sophisticated marketing skills are now engaged in the trade, and per caput income growth, particularly in Poland, should encourage further growth.

II. POLAND

A. EVOLUTION OF THE MARKET

4. Subsequent to the liberalization of the Polish market in the late 1980s, citrus imports showed a rapid increase, but between 1992 and 1996 imports rose by 12 percent. Per caput consumption has risen by 800 grams between 1992 and 1996.

5. Citrus imports arrive by ship or truck, depending on the quantities required. Transport cost varies widely, with ship transport being considerably cheaper. For example, transport cost from Spain by refrigerated trucks amounts to DM 0.35 per kg (US cents 21/kg) compared to DM 0.10 per kg (US cents 6/kg) by ship. Consumer packs are small, partly due to consumer preferences and due to low levels of personal income. South Poland is mainly supplied by Greece and Italy, while Central and North Poland receive fruit from Spain. There are only minimal imports of citrus juices. Concentrates are imported, mainly from Brazil and Germany (re-export) for orange, and from the Netherlands (re-export) and the United States for grapefruit. Single strength juices are produced and retailed in Poland.

Table 1 - Poland: Citrus imports and per caput consumption, 1992-96

1992 1993 1994 1995 1996
IMPORTS ‘000 tonnes
Citrus 261.7 252.3 252.7 278.6 294.1







kg/year
PER CAPUT




Citrus 6.83 6.57 6.56 7.23 7.62

B. IMPORTS BY ORIGIN AND VARIETY

6. Looking at individual types of citrus, import growth has varied considerably among types. Between 1992 and 1996 total citrus imports rose by 12 percent, but oranges declined by 28 percent, tangerines rose by 151 percent, grapefruit rose by 55 percent and lemons rose by 5 percent. Imports into Poland of citrus by variety between 1992 and 1996 are shown in Table 2.

7. Apart from grapefruit, where the largest supplier is Israel, Spain remained the dominant supplier of citrus during the 1992-96 period. In the case of tangerines and oranges, Morocco played a role as a growing supplier, as did Argentina for lemons. The value of citrus imports rose by 8.5 percent between 1992 and 1996, to a total of US$80.4 million. Import unit values in terms of US dollars for oranges rose only two percent between 1992 and 1996, from US$251 to US$256 per tonne, but the Zloty import price rose by 69 percent and retail prices almost doubled.

Table 2 - Poland: Volume and value of citrus imports by origin, 1992-96



















1992 1993 1994 1995 1996 1992 1993 1994 1995 1996 1992 1993 1994 1995 1996


‘000 tonnes million US$ US$/tonne


















ORANGES















Total 133 105 91 109 95 33 27 19 25 24 251 253 210 226 257

of which:















Spain 57 79 66 85 64 15 20 14 19 16 267 247 216 223 253

Greece 33 8 2 5 4 6 2 1 1 1 191 226 216 222 307

Italy 4 3 0 1 1 1 1 0 0 0 277 298 246 231 283

S. Africa 1 6 6 8 8 0 2 2 2 3 338 379 262 300 335

Morocco 2 1 10 6 16 1 0 1 1 3 252 206 129 179 217

Turkey 5 0 - 0 0 1 0 - ... 0 279 295 - - 275

Uruguay 6 1 1 1 1 2 0 0 0 0 290 195 202 189 203

Others 36 6 6 3 2 10 1 1 1 1 277 228 224 212 247


















LEMONS















Total 74 72 66 74 77 23 21 18 20 23 316 291 264 264 302

of which:















Spain 30 63 53 59 56 10 18 14 15 18 316 290 267 262 321

Greece 3 1 - 3 2 1 0 - 1 1 214 268 - 283 317

Italy 8 0 1 1 0 3 0 0 0 0 327 330 279 257 305

S. Africa 0 1 1 2 1 0 0 0 1 0 323 442 249 485 494

Morocco - - - - - - - - - - - - - - -

Turkey 19 4 6 4 4 6 1 1 1 1 327 283 243 256 250

Uruguay 4 1 2 2 1 1 0 1 0 1 326 255 268 216 381

Argentina 2 0 2 3 13 1 0 0 1 3 319 379 229 198 212

Others 8 2 1 1 0 2 0 0 0 0 312 276 275 308 377


















TANGERINES















Total 37 64 77 73 93 12 18 19 19 26 311 282 250 260 279

of which:















Spain 14 35 44 47 47 5 11 12 12 13 353 308 264 261 285

Greece 4 4 3 3 3 1 1 1 1 1 299 293 272 251 286

Italy 1 3 3 5 14 0 1 1 1 4 415 308 265 267 281

S. Africa - 0 - 1 2 - 0 - 0 1 - 359 - 508 354

Morocco 5 17 21 14 23 2 4 4 4 6 289 219 204 244 246

Turkey 6 2 1 0 1 2 1 0 0 0 304 298 291 319 298

Uruguay 0 - 1 1 1 0 - 0 0 1 438 - 265 240 400

Others 7 4 5 2 2 2 1 1 0 1 231 268 286 256 313


















GRAPEFRUIT















Total 18 11 18 23 29 6 3 3 5 7 322 245 186 212 236

of which:















Spain 1 2 3 4 3 0 1 1 1 1 356 306 233 270 288

Israel 2 1 1 5 11 0 0 0 1 3 224 111 165 188 238

S. Africa 0 1 4 4 4 0 0 1 1 1 258 187 178 230 207

Cyprus 3 2 3 2 1 1 0 1 0 0 314 244 187 195 225

Turkey 6 2 2 3 2 2 0 0 1 0 342 252 187 199 229

Cuba 2 1 2 1 1 1 0 1 0 0 407 314 272 372 201

Others 4 2 3 5 6 1 0 0 1 1 287 227 116 145 235


















TOTAL CITRUS 262 252 253 279 294 74 68 59 68 80 283 271 235 244 273

Table 3 - Poland: Import and retail prices, 1993-96

April 1993 April 1994 April 1995 April 1996
Import price, Zloty/kg 0.45 0.48 0.55 0.76
Retail price, Zloty/kg 1.76 2.34 2.80 3.63

C. IMPORT DUTIES AND TAXES

8. The general MFN rate is 15 percent for oranges, with a 10.5 percent preferential rate for supplying countries having an average GDP lower than that of Poland or for least developed countries; a 20 percent rate on tangerines, with a 14 percent preferential rate; a 10 percent rate on lemons, with a 7 percent preferential rate; and a 15 percent rate on grapefruit, with a 10.5 percent preferential rate.

Table 4 - Poland: Import duties and taxes

MFN Rate

%

 Preferential Rate

%
Oranges 15 10.5
Tangerines 20 14
Lemons 10 7
Grapefruit 15 10.5
Frozen concentrated orange juice

Density exceeding 1.33 gm/cm3 at 20º 50 Not applicable
Density under 1.33 gm/cm3 at 20º 30 Not applicable
Grapefruit juice

Density exceeding 1.33 gm/cm3 at 20º 50 Not applicable
Value exceeding ECU 30 per 100 kg net weight and added sugar content exceeding 30% by weight 30 Not applicable
Single strength citrus juice

Density exceeding 1.33 gm/cm3 at 20º 50 Not applicable
Single strength citrus juice containing added sugar 30 Not applicable
Lemon juice 30 Not applicable
Other citrus juices 30 Not applicable

III. RUSSIAN FEDERATION

A. EVOLUTION OF THE MARKET

9. The Russian Federation’s citrus imports fell subsequent to the break-up of the USSR. However, there was a rapid recovery in 1993 to around 287 000 tonnes and by 1994 a record of almost 680 000 tonnes was reached. However, after the 1994 peak, citrus imports and consumption started to decline. A slow-down in economic growth accompanied by increasing unemployment and lower purchasing power led to a drop in citrus imports in 1995 by 22 percent and a further smaller reduction in 1996 by 4.1 percent to reach 444 000 tonnes. Indications for the first quarter of 1997 are that a slight recovery could be possible. During the first three months of 1997 citrus imports were 4 percent above the level during the same period of the previous year.

10. Per caput consumption has risen rapidly, peaking in 1994. There was a reduction in citrus intake in 1995 and a further small decrease to around 3 kg/head in 1996.

11. Considering the imports of individual types of citrus from 1992 to 1996 there was a significant growth of all varieties to 1994 and then a sharp decrease in 1995. However, while orange imports declined by 27 percent in 1995 and 23 percent in 1996, other citrus varieties returned to higher levels. For instance, imports of tangerines increased by 64 percent compared to 1994, to the highest level ever reached (in 1996).

Table 5 - Russian Federation: Citrus imports by variety and per caput

consumption, 1996-96

1992 1993 1994 1995 1996



metric tonnes
IMPORTS




Total Citrus 118 880 286 879 629 137 466 731 443 841
Oranges 80 000 200 000 458 397 332 434 257 568
Tangerines 1 000 21 000 58 703 51 638 96 489
Lemons 8 130 53 000 79 388 65 973 70 675
Grapefruit 29 740 12 000 28 074 16 686 18 843
Citrus n.e.s. 10 879 4 575 - 266







kg/year
PER CAPUT




Total Citrus 0.80 1.93 4.23 3.14 3.00

B. IMPORTS BY ORIGIN AND VARIETY

12. Imports of citrus by origin during 1994-96 are shown in Table 6. In 1994 Greece was by far the largest supplier of citrus fruit to the Russian Federation, accounting for almost 30 percent, followed by Turkey and the Netherlands as a re-exporter, supplying about 8 percent each. In 1996, Greece remained the largest supplier, with a share of 28 percent, but Turkey’s share rose significantly to 18 percent. Other citrus producing countries like China, Israel, Morocco and Spain increased their combined shipments to the Russian Federation from 15 percent in 1994 to 27 percent in 1996. During the period, supplies from re-exporters were increasingly substituted by imports directly from producing countries.

13. Despite declining volumes, Greece remained the dominant supplier of oranges between 1994 and 1996; however, imports from Turkey and Israel continued to grow during the same period. By 1996 Greece accounted for 43 percent of the orange market, Israel ten percent and Turkey twelve percent.

14. As regards tangerines, China remained the major supplier with a market share of 28 percent in 1996, followed by Turkey, Georgia, Morocco and Spain, which together accounted for 52 percent of the market.

15. In the case of lemons, Turkey with 29 percent and Greece with 20 percent of the market, were the two most important suppliers.

16. In grapefruit, Israel, Turkey, and Cyprus together supplied 69 percent of consumption in 1996. In 1994 Cuba held 60 percent of the market but by 1996 it accounted for only 0.04 percent. Cuba in the earlier years was particularly competitive in grapefruit supplies, both white and red. However, the quantities shipped were often too large, depressing prices and reducing profits in the import and wholesale chain.

17. Data on juice imports are not readily available, but based on information for 1994 and 1995, it would appear that substantial imports of orange juice are in consumer packs of single strength, rather than in concentrates for further processing. Good quality non-concentrated orange juices which are imported, are generally only available in up-market supermarkets. One litre bottles may cost US$6 and more at retail.

Table 5 - Russian Federation: Volume and value of citrus, imports by origin, 1994-96

1994 1995 1996
1994 1995 1996

tonnes ‘000 US$
ORANGES







Total 458 397 332 434 257 568
222 192 164 038 109 686
of which :







Argentina 3 568 1 300 2 389
1 668 584 1 068
China 9 390 3 781 1 996
4 726 1 890 906
Cuba 13 870 3 162 19
4 851 988 14
Cyprus 30 426 15 000 12 971
7 247 8 114 8 731
Egypt 9 789 6 099 10 208
4 078 3 257 4 300
Finland 8 079 1 622 49
6 980 1 244 47
Germany 5 518 1 853 321
4 002 1 152 154
Greece 182 275 141 862 110 436
78 201 60 361 39 991
Israel 12 880 25 604 26 798
6 926 13 798 11 113
Italy 2 894 1 490 1 686
1 458 718 732
Latvia 8 869 19 660 -
5 792 13 161 -
Morocco 19 601 3 644 15 022
11 744 2 004 6 250
Netherlands 30 554 25 761 5 421
17 790 14 324 2 255
Poland 10 415 5 748 284
5 926 3 689 216
Spain 14 300 4 654 7 702
7 363 2 235 3 579
South Africa - 17 682 18 355
- 9 234 8 545
Turkey 23 999 18 779 30 718
11 789 8 610 13 304
Uruguay 24 535 12 227 2 519
12 223 6 144 1 428
TANGERINES







Total 58 703 51 368 96 489
42 602 32 578 42 523
of which :







China 18 456 17 590 27 218
9 906 8 369 10 129
Georgia 7 930 3 113 15 603
4 487 2 677 8 110
Germany 1 571 1 481 62
1 501 1 030 19
Greece 1 347 1 146 1 606
1 212 841 1 146
Morocco 3 185 920 5 329
2 933 779 2 297
Netherlands 7 889 8 207 1 931
7 758 6 144 1 081
Poland 1 064 481 37
1 019 460 13
Spain 1 824 821 4 954
1 599 612 2 549
Turkey 4 508 8 666 24 839
2 680 3 816 8 337
LEMONS







Total 79 388 65 973 70 765
53 381 39 152 36 086
of which :







China 1 226 639 486
710 382 217
Cyprus 6 825 3 730 4 032
4 707 2 296 2 950
Finland 3 938 1 081 41
3 909 944 27
Germany 1 738 2 522 619
1 467 1 364 240
Greece 20 329 16 226 13 946
11 683 8 349 6 623
Italy 1 035 3 123 4 771
677 1 984 2 442
Netherlands 9 511 13 463 3 310
7 612 9 327 1 787
Spain 3 462 1 554 8 576
2 323 945 4 978
Turkey 21 146 13 782 20 442
12 686 6 533 8 215
GRAPEFRUIT







Total 28 074 n.a. 18 843
46 135 n.a. 8 493
of which :







Cuba 16 937 ... 792
39 060 ... 385
Cyprus 1 029 ... 2 526
629 ... 1 518
Israel 4 088 n.a. 6 303
2 497 n.a. 2 365
Netherlands 1 765 ... 1 157
1 413 ... 551
Turkey 1 477 ... 4 247
690 ... 1 601

Source: Russian Federation - Foreign Trade, Statistical Yearbook.

C. IMPORT DUTIES AND TAXES

18. A 20 percent value-added tax (VAT) is charged on the cost price, i.e. in addition to customs duties. While import duties are relatively low, other customs regulations can pose difficulties. For example, there is a 30 tonne weight restriction for truck loads. If the weight is higher, a special permit is required. Since this procedure takes generally two weeks, the fruit is often spoiled.

Table 7 - Russian Federation: Import duties and taxes

VAT Duty rate

(in percent of custom value)



Citrus fruits, fresh or dried

Oranges 20 5
Mandarins, including tangerines 20 5
and yunshiyu (satsum), clementines,

wilkings and other analogous

citrus fruit hybrids.

Lemons and limes 20 5
Grapefruits 20 5
Orange juice 20 10
Grapefruit juice 20 10
Lemon juice 20 10
Any other single citrus fruit juice 20 10

D. TRANSPORT, DISTRIBUTION AND ORGANIZATIONAL ISSUES

19. There are two major points of import of citrus fruit into the Russia Federation. Fruit from Greece, Turkey, Cyprus and Israel come through Black Sea ports; those from Argentina, Uruguay and Cuba arrive via the Baltic Sea. There are also arrivals by truck, often from ports in the Netherlands and Germany.

20. The major transport problems in the northern ports, mainly Saint Petersburg, are ice and strong frost in the winter. Regarding arrivals through Black Sea ports, available vessels are not particularly suited to rough seas, which is generally the case in the winter when citrus is being marketed.

21. Arrivals at smaller ports are limited because often the fruit does not find sufficient demand. Furthermore, financial losses occur through the leasing of vessels, and long and expensive rail transport, with excessive waste.

22. Internal transport accounts for a large share of the cost structure of imported citrus. The distances and costs per tonne of fruit for distributing citrus to the more distant areas of the Russian Federation are shown in Table 8.

Table 8 - Russian Federation: Distance from St Petersburg and Novorossiysk

and cost of transport



ST PETERSBURG
NOVOROSSIYSK



(Baltic Sea)
(Black Sea)













Distance Railway Cost
Distance
Railway Cost



Km
US$/ton
Km
US$/ton
























Moscow 705
75
1 628
116


Ekaterinenbourg 2 098
130
2 803
153


Omsk 3 001
160
3 486
176


Novosibirsk 3 632
181
4 117
199


Barnaul 3 809
188
4 294
204


Krasnojarsk 4 407
210
4 892
226


Irkutsk 5 467
246
5 952
264


Chita 6 484
278
6 969
292

23. There are two major market centres for fruit in the Russian Federation: (1) Saint Petersburg and the surrounding areas with the natural privilege of having a large port, even if harbour facilities still need improvement, in particular a fruit terminal; (2) Moscow where income levels and purchasing power are higher than in the rest of the country.

24. To address joint concerns, the eleven largest Russian importing companies decided to establish the Russian Fruit Association (RFA). These companies, all located in St. Petersburg and Moscow, work closely in areas of common concern, but still operate as independent businesses. The major activities of the Association with respect to citrus trade are: to provide information for members through frequent reports on international movements, prices, government policy on trade, etc.; assistance to and co-operation between members during difficult market situations; protection of the rights of companies; common advertising; promotion of investment programmes for development of infrastructure, such as storage facilities or cooling chambers; and establishment and expansion of international co-operation. Eleven additional fruit trading companies from France, Netherlands, Belgium, Germany, Italy and Israel have joined RFA as associate members.

25. The Turkish citrus trade has founded a marketing company known as ASM (Mediterranean Fruit and Vegetable Exporting Foreign Trade Corporation) made up of ten Turkish enterprises, to market fresh fruit and vegetables to the Russian Federation and the Ukraine. An important part of the effort will be in citrus, but other fruits and vegetables will be handled, as well as citrus from the Southern Hemisphere. ASM plans to ship cargoes directly to Novorossiysk and St. Petersburg and establish its own cold storage facilities. ASM will also work with a major trading company in Moscow and St. Petersburg. This new venture will try to improve distribution also to interior points.

IV. OTHER COUNTRIES OF EASTERN AND CENTRAL EUROPE AND AREA OF THE FORMER USSR

A. CZECH REPUBLIC

26. The Czech Republic has had a growth of 1.2 percent annually in citrus imports between 1993 and 1996. Spain accounts for 56 percent of the market, with Italy, Greece and Turkey also being important suppliers. The current obligation for importers to deposit 20 percent of the value of imports for 180 days without interest, while not directed at citrus imports, is likely to weaken the capital structure of citrus importers.

B. SLOVAKIA

27. As the GDP per caput in Slovakia is lower than in the Czech Republic there is a tendency to shop for citrus based on price as compared to quality considerations. Nevertheless, imports have enjoyed a growth rate of 4 percent per year between 1993 and 1996. Spain supplies about 55 percent of the market, while Italy, Greece , Cyprus and Turkey account for the majority of the remaining supplies.

C. HUNGARY

28. Since 1993 Hungary’s citrus imports have been declining at an average annual rate trend of 14 percent from a high of 101 000 tonnes in 1993 to 63 000 tonnes in 1996. High VAT rates on citrus, combined with customs duties and competition from other fruits, such as bananas and locally produced fruits create keen competition for citrus sales. Spain supplies about 37 percent of the market, but Turkey, Italy and Greece are also important suppliers. There is a considerable concentration in the market, with 60 percent of sales in the Budapest area. Hungarian consumers are very knowledgeable of citrus and other fruits as the country is itself a major fruit producer. As a result the consumer is demanding regarding quality. Customs duties are five percent, but the VAT is 25 percent.

Table 9 - Eastern Europe: Imports of citrus fruits









Growth Rate



1992 1993 1994 1995 1996
1993-1996





‘000 tonnes

%













Eastern Europe 528.8 671.5 724.7 746.3 665.2
-0.3













Albania - 13.2 22.0 20.8 13.1
-0.3


Bulgaria 30.2 56.0 101.1 88.0 39.2
-11.2


Czechoslovakia 116.7








Czech Rep.
126.7 141.5 153.4 131.5
1.2


Slovakia
53.5 61.1 57.7 60.2
4.0


Hungary 68.0 101.2 80.3 71.5 63.5
-14.4


Poland 261.7 252.3 252.7 278.6 294.1
5.2


Romania 82.4 68.6 66.0 76.3 63.6
-2.5






















D. AREA OF THE FORMER USSR

29. Leaving aside the Russian Federation, dealt with above, apart from Uzbekistan, Azerbaijan, and Georgia, every nation comprising the area of the former USSR has experienced a growth in citrus imports since 1992. Imports of citrus fruit into these countries during 1992-96 are shown in Table 10. In most cases, growth has been pronounced. The Ukraine, with a population of over 51 million, should provide interesting market opportunities for citrus as incomes increase.

Table 10 - Area Former USSR: Imports of citrus fruits









Growth Rate



1992 1993 1994 1995 1996
1992-1996



‘000 tonnes
%













Armenia - - - 3 357 5 971
-


Azerbaijan - 9 663 21 125 13 494 7 771
-


Belarus 5 500 5 600 9 600 45 700 49 600
73.3


Estonia 413 3 819 5 251 5 877 6 054
95.7


Georgia - 2 400 440 1 450 1 450
-


Kazakstan 1 000 1 690 7 920 6 067 6 141
57.4


Kyrgyzstan - 70 300 828 1 555
-


Latvia 542 5 134 6 443 7 857 9 565
105.0


Lithuania 150 6 000 16 359 14 470 15 511
218.9


Moldova Rep 1 150 1 600 1 992 3 967 3 319
30.3


Turkmenistan - 550 135 19 381 2 253
-


Ukraine 48 500 44 820 64 700 45 500 56 200
3.8


Uzbekistan 500 520 221 201 201
-20.4


Total 57 755 81 866 134 486 168 149 165 591
30.1













Russian Fed 118 880 286 879 629 137 466 731 443 841
39.0













Area Former USSR 176 635 368 745 763 623 634 880 609 432
36.3

30. As can be seen in Table 11, 1996 imports by this group of nations are now 50 percent higher than the 1988-91 average. Per caput consumption is also higher. As with the Russian Federation, in the last few years consumption is shifting to tangerines away from oranges and grapefruit.

Table 11 - Former Area USSR: Citrus imports by variety and

per caput consumption, 1988-96

1988-91

(Average)

 1992 1993 1994 1995 1996

metric tonnes
IMPORTS
Total Citrus 404 971 176 635 368 745 763 623 634 880 609 432
Oranges 243 119 127 257 261 346 538 120 438 017 354 359
Tangerines 6 446 2 000 25 290 86 634 80 302 125 556
Lemons 54 156 17 578 67 990 102 973 96 474 107 583
Grapefruit 101 250 29 744 12 878 30 947 20 006 21 391
Citrus n.e.s. - 56 1 241 4 949 81 543

kg/year
PER CAPUT
Total Citrus 1.40 0.60 1.26 2.61 2.16 2.08

V. OUTLOOK

31. There are several factors relevant to the future outlook for citrus in Eastern Europe and the area of the former USSR. The rate of GDP growth will play a key role in per caput income levels, an important factor determining citrus consumption. Although prospects exist for further market growth, transport difficulties will continue to inhibit trade in fresh citrus, as do commodity taxes which curtail consumption in the light of the relatively weak purchasing power of consumers. The absence of administrative transparency in regulatory measures, particularly with regard to imports, is also likely to dampen the growth of the market. Generally speaking, per caput consumption is likely to remain low by western European standards for some time, although some encouragement is found in the growth in imports among the nations of the former USSR, as well as in Slovakia, the Czech Republic and Poland. Much of the positive side of the ledger comes from improved marketing organization and better fruit distribution infrastructure.

32. With respect to sources of imports, the trend towards purchases directly from producing countries is likely to continue, with Mediterranean countries being the major suppliers. Turkey, with a major production expansion and favourable prices, could further expand its market share in the Russian Federation. Israel could also strengthen its market position. Approximately 20 percent of Israeli citrus is now destined to Eastern Europe. There may be increased competition in the future from Argentina and Uruguay, with improved quality and reasonable prices, while Cuba may be expected to recover from the dramatic drop in sales to the Russian Federation.

33. The Group may wish to recommend that the Secretariat continue to monitor closely the citrus markets of the countries covered in this paper, as they constitute an area of important future potential consumption.