The Citrus Management Committee (CGC) is very interested in the Government outlining as soon as possible what the future conditions could be for citrus shipments to the UK after Brexit.
"We shouldn't wait for the end of the negotiations before outlining what the future commercial, phytosanitary and customs conditions may be in all three possible scenarios: a soft Brexit, a hard Brexit or a lack of agreement," said the vice president of the CGC, Marcos Gual.
He said that this organization wants to get involved in the round of meetings scheduled for later this month by the Secretary of State for Trade, the Ministry of Agriculture, Fisheries and Food (MAPA) and the Ministry of Finance, so that "everything is ready from day one after brexit and, consequently, exports can continue."
Decline in shipments after the British referendum
Gual explained that the Spanish export of citrus fruits has already suffered from the devaluation of the pound sterling since the British referendum was held on June 23, 2016, which will result in the UK leaving the European Union as of March 29, 2019.
Spain produces around six million tons of oranges and mandarins each year and ships 50% of its production outside its borders. Germany is the number one destination (975,000 tons in 2017/18), followed by France (760,000 tons) and the United Kingdom (286,000 tons; 30,500 tons less than in the 2016/17 campaign).
The worst scenario, a Brexit without agreement
"On a practical level, sending a truck to London or to Albacete is currently the same, since both are inside the same market," but if there is no agreement for Brexit, "everything will become more expensive in the English capital."
The sector believes that "the lack of a pact could lead to the price of Spanish oranges increasing by 7 to 10%" for British consumers, since the costs related to "transport, bureaucracy and time would rise."
In the scenario without agreement, he added, "the pound sterling could fall again, which would make the British market less attractive to Spanish orange exporters," and the EU would have to "prohibit the re-export of citrus from third countries through the United Kingdom or enforce stricter controls to prevent the spread of pests."
Recovery of exports if there is a customs union
"But if there is eventually a customs union, or if, in the end, the United Kingdom is considered a country associated with the EU, like Norway or Switzerland, the controls would not increase the cost of the product and the price increase for the British consumer would likely not be as bad and be limited to perhaps 1%."
In such a case, "there would be a chance to go back to the point where we were initially, but it would never be better," he said, after recalling that, from the beginning, the European negotiator for Brexit, Michel Barnier, has described the situation as a "lose-lose", since both the British market and the EU will be affected in all cases.
Good prospects for the 2017/18 campaign
As for the citrus campaign that has just begun, and while still waiting for the official production prospects, which will be published in a few weeks by the governments of the producing regions (Valencia, Andalusia and Murcia), Gual has shown his optimism, claiming that it will be satisfactory, both in terms of quantity and quality.
"The conditions in the spring and summer have been favorable and we expect a quiet campaign, very staggered, with a good product and normal volumes, greater than those of the 2017/18 season, and without oversupply or shortages," he said.
Source: efeagro.com