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Fresh Del Monte Produce Inc. Message Board

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  • On 12 July the wheels were set in motion on the road to the single tariff for bananas with the EU authorising the EC to open negotiations at the WTO with the major stakeholders. The EC is tasked with designing a simple single tariff system to replace the existing quota and licence system. Instead of requiring a quota allocation and a licence to import bananas, post 1 January 2006 the expanded EU market will be deregulated and open to all.
    To date,at least three econometric analyses have been commissioned to review the impact of varying tariff rates on the EU market and the consequences for the Dollar, ACP and European producer nations. Unsurprisingly perhaps, all of the reports have come to very different conclusions. Unsurprising because of the sheer number of uncontrollable variables involved, the differing motivations of the prime movers and by whom the analyses were commissioned!
    The EC has a tough job -it has to satisfy both its commitment to European and ACP producers and its commitment to the WTO. It is difficult to see how a consensus can be achieved with,at one end of the scale, the Dollar producers demanding a low tariff and implicitly threatening to seek arbitration at the WTO if they don 't get what they want, while at the other end,the EU producers
    claim they are facing meltdown if they don't get above � 300 per ton.Earlier this week,the Spanish Government made a statement supporting the Canary Island producers ' demand for a � 295 per ton tariff.
    In the middle stand the most vulnerable producers of the ACP nations. While the West African producer nations,with multi-national support,are better placed to cope with a low tariff, the long-term future of Caribbean banana production looks bleak given the region 's relatively high production and logistics costs. However unless the West African producers can improve their fruit quality to match that of the Dollar fruit,the multi-nationals may lose their patience, particularly if they continue to experience related logistical problems such as the destruction of the bridge over the River Mongou in Cameroon,which cut a vital supply line from the production area to the port. Only last week Del Monte offered to invest US$120m in banana production in Brazil, ostensibly to encourage the Brazilian Government to negotiate for an increased quota but perhaps also revealing its longer-term intentions.
    reefertrends week31

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