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Marketing News

2 Foreign Agriculture

U.S. Cooperators Boost The U.S. Feed Grains Council and the American Soybean Association are in the second

Barley Consumption in Tunisia year of a promising program which encourages early weaning of Tunisian sheep to a diet of whole barley, soybean meal, vitamins and minerals. The program could revolutionize Tunisian sheep production through increased litter sizes, higher meat yields and more frequent lambing. It could also lead to expanded barley and soybean meal consumption. The cooperators are conducting similar programs for the dairy and beef sectors, also likely to increase consumption. Tunisia will purchase barley and soybean meal according to foreign aid availability, credit, price and subsidy programs.

New Storage Idea The American Plywood Association (APA) is undertaking an intensive promotional effort From APA in Europe throughout Europe for its 1,100-liter plywood bin. The bin, a sturdy, reusable wooden container lined with an aseptic bag, is the result of considerable design and field efforts by Association engineers and U.S. bin fabricators. The bin was introduced to potential overseas users—producers and processors of liquid or semi-liquid agricultural goods—at the Technoconserve exhibition in Parma, Italy, in November 1985.

M. G. Robert Verhorst, based in APA’s Antwerp office, represented the Association at the Technoconserve fair. He reporis that the bin attracted much attention from the tomato

paste industry, as well as from fruit crush, fruit concentrate and olive oil firms. Further inquiries have been received from European users on the possible use of the bins for animal fats and small fish. The bin also has many industrial packaging applications.

For design and other information on the bin, contact any of the APA’s European offices,

located in London (Tel. 01629-3437), Antwerp (Tel. 3 449 6472) and Hamburg (Tel 40 353047).

Variety Meats Featured at Last spring, U.S. Meat Export Federation staff in Mexico held a dinner featuring U.S. beef

MEF-Sponsored Dinner and pork offals at the U.S. Ambassador's residence. The dishes, prepared by a renowned local chef, were of U.S. origin and included pate, tripe a la mode, head cheese, garlic salami, ox-tail soup, tongue gelee and pickled pork feet.

Attending the dinner were 35 of Mexico's food industry leaders, including importers, supermarket personnel, distributors and independent operators. The Mexican market for variety meats is a significant one, as Mexico imported 59,880 metric tons of variety meats from the United States in 1985.

USW Hosts Yugoslavian Future wheat trade between Eastern Bloc nations and the United States may be

Wheat Marketing Conference more promising as a result of a recent U.S. Wheat Associates—sponsored marketing conference in Yugoslavia. U.S. Wheat hosted the two-day round of information sessions for grain trade officials from Yugoslavia, Romania and Bulgaria. The sessions were aimed at outlining the current world supply and demand situation for wheat and providing foreign officials with the details they need to participate more fully in U.S. government export programs.

Among other items addressed at the conference were trends in world wheat consumption, the workings of the U.S. grain inspection system, current U.S. farm legislation and the role of U.S. farmer cooperatives in wheat export marketing. Of particular importance to the East Europeans were trends in financing wheat imports, the economic factors affecting ocean transportation, U.S. market opportunities for European products and the future role of long-term grain supply agreements.

Volume XXIV No. 10 October 1986 3

The Magazine for

Business Firms Featu res Selling U.S. Farm

Products Overseas

Portugal’s Accession: How Will It Affect Trade Ties With U.S.? Published by

U.S. Department of Agriculture 7 .

Foreign Agricultural Service The future of U.S.-Portuguese agricultural trade has been clouded by Portugal's accession to the European Community.

Managing Editor

Lynn K. Goldsbrough

(202) 382-9442 California’s Table Grapes Enjoy a Great Year

me aren Exporters of high-quality U.S. table grapes experienced a record-shattering export year—and prospects over the near term look good

Writers

David Garten

=dwin N. Moffett

Flobert Moser

per American sweets exporters will face heavy competition from European Community

Jennifer M. Smith nations in selling goods to West Germany.

U.S. Sweets Exporters Face Long Road in German Market

Associate Designer

Sylvia Duerksen Hong Kong Is Tops at Cracking U.S. Shell Eggs

Victor Newman

Although Chinese homemakers prefer brown eggs, U.S. white eggs are big on the

, menus at hotels, western-style restaurants and fast food outlets.

ext of this magazine may be reprinted

freely. Photographs may not be reprinted

without permission. Contact the Design

Director on (202) 447-6281 for instructions Taiwan Holds Opportunity for U.S. Citrus Sales

Use of commercial and trade names does

not imply approval or constitute e . endorsement by USDA or the Foreign Taiwan's imports of oranges, grapefruit and lemons have been growing steadily. pe acerca ahi The United States supplies a good share of those imports

Agriculture has determined that publication

of this periodical is necessary in the

transaction of public business required by

law of this Department. Use of funds for

printing Foreign Agriculture has been D rt t

approved by the Director, Office of epa men Ss

Management and Budget, through March 31 1987. Yearly subscription rate $16.00 domestic, $20.00 foreign, single copies $2.75 domestic, $3.45 foreign. Order from Superintendent of Documents, Government Printing Office, Washington, DC 20402

Marketing News

Fact File: The Targeted Export Assistance Program

Country Briefs

Portugal’s Accession: How Will It Affect Trade Ties With U.S.?

4 Foreign Agriculture

By Homer Sabatini

The accession of Portugal to the European Community (EC) on Jan. 1, 1986, has raised a number of questions about the future of U.S. agricultural trade with the Iberian Peninsula. U.S. exporters are concerned about the status of traditional exports as well as expansion in new product areas.

Many of the expected changes will be a result of the integration of Portugal's agriculture into that of the Community. Integration of Portugal's agricultural sector into that of the EC began March 1, 1986. About 85 percent of Portuguese agricultural production will have a two- stage transition period of five years each—10 years in all.

The major products in this group are grains, rice, dairy products, beef, pork, poultry and eggs, fresh fruits and vegetables and wine. For most of these products, EC rules are introduced gradually, and mostly after the end of the first period.

Another group of products, such as processed fruits and vegetables, tobacco, seeds, mutton, goat meat and cotton have a one-stage, seven-year transition period. For these products, the EC regime for imports from third countries was adopted upon accession, while alignment of duties will be gradual.

Fats and oils have a 10-year transition period with special limitations on seed oil consumption and oil and meal imports in effect during the first five years.

Impact of Accession on U.S. Farm Trade

The principal U.S. exports to Portugal— grains and oilseeds—are the very commodities that will be most adversely affected by Portugal’s membership in the EC.

The Community's trade policy measures will erode the U.S. grain market and threaten to prevent the growth of Portugal’s oilseed imports. On the other hand, Portuguese accession into the EC should not necessarily have an immediate and direct adverse impact on U.S. exports of commodities such as cotton, tallow, hides and skins.

In these cases, especially cotton, competition from other countries will generally outweigh EC trade impediments. (EC retaliatory measures against U.S. tallow imposed in response to U.S. action on EC steel do not apply to U.S. exports to Portugal.)

For a variety of U.S. exports, this is the likely scenario for trade in the near to medium term:

Grains and Rice

During the first phase of the transition period, Portugal is formally committed to buying at least 15.5 percent of its grain imports from the EC. It also must grant import levy preferences to the EC on an increasingly larger portion of its grain imports.

These preferences apply to the private portion of the grain trade, which is 20 percent of total grain imports in 1986 and an additional 20 percent in each of the following years.

Through 1990, the non-private imports will continue to be made by a government agency and will not be subject to an import levy. The levy on private imports is determined by bids on tenders opened by Portugal’s grain commission. The firm that offers the highest levy wins the bid.

October 1986 5

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6 Foreign Agriculture

Since EC grain is higher priced than grain from third countries, importers of EC grain could not be expected to offer levies higher than those on imports from third countries.

Therefore, a corrective element has been introduced to offset the difference between the EC and the world price. In addition, imports from the EC have a

preferential element of 5 ECUs per metric ton.

There is widespread feeling in Portuguese grain circles that the EC Commission could turn the corrective element into an additional preferential element. The first tender for 70,000 tons of corn by the private sector was opened in June

In 1991, the Portuguese grain system will be fully integrated into that of the EC. Imports from third countries will pay the full EC levy while imports form the EC will be levy-free.

Corn is the principal U.S. export to Portugal. Through 1985, the United States was virtually the sole supplier of Portugal's corn imports, but Argentina made some sizable sales in January 1986. For the next few years, CCC credit, if available, should help the United States retain its predominant position in Portugal's corn import market.

However, in about two years, Portugal’s use of corn could well drop by half from the 1984/85 level of 2 million tons because of increased use of non-grain feed ingredients and, more importantly, increased use of EC barley and feed wheat. Furthermore, corn from the EC will likely displace part of the imports from third countries.

The Portuguese government aims to reduce the country’s dependence on corn and to re-orient livestock rations from corn to ingredients more prevalent in the rest of the EC. On the other hand, as Portugal tries to bring about this switch, for the next two or three years, there might be some limited export opportunities for U.S. barley and sorghum.

U.S.-Portuguese Trade

Portugal imports about 60 percent of its food needs and all its fiber requirements. With the help of USDA's Commodity Credit Corporation (CCC) credit programs, the United States was the largest supplier of agricultural products to Portugal prior to accession. In 1985, U.S. exports to Portugal were valued at $428 million, accounting for roughly 35 percent of the Portuguese import market.

The U.S. share was down from nearly half of Portugal's total farm imports just a year earlier. One of the primary reasons for the drop was high U.S. prices due to the strong U.S. dollar.

Although Portugal has less than 10 million people and the lowest per capita income in Western Europe (about $2,150 per year), during most of the past decade it was a major and growing market for U.S. agricultural products.

Two product groups—grains (including rice) and oilseeds—account for 92-93 percent of U.S. farm product exports to Portugal. Cotton, tallow, hides and skins and tobacco account for another 6-7 percent.

The remaining 1 percent or so consists of some 125 products or groups of products of varying degrees of importance.

The U.S. farm bill signed in December 1985, a weakened dollar and quality control measures should help restore U.S. competitiveness in the Portuguese market.

Nevertheless, while Portuguese farm imports should hold steady this year, the U.S. share of the import market will likely show a further drop because of new and serious trade impediments resulting from Portugal’s accession to the EC.

Sales of corn gluten feed should also expand, if no policy restrictions are imposed. But the value of these anticipated gains, if they occur, will be far smaller than the anticipated loss in corn sales.

In wheat, the U.S. position as the predominant supplier will be gradually eroded by EC competition. Canada also entered the Portuguese wheat market recently. In 1986/87, the United States should still be able to supply about 80 percent of the import market if CCC credit remains available.

For the time being, Portuguese imports of U.S. hard red winter wheat (normally some 250,000 tons a year) should not be affected by Portugal's accession to the EC. However, for the longer term, the unknown factor is whether wheat gluten from the EC wil reduce the need for hard red winter wheat.

CCC credit, more competitive U.S. prices for the portion of imports not subject to the levy and promotional activity at the consumer level could help brighten prospects for U.S. rice, which have suffered considerably in recent months.

Oilseeds

Expansion of the Portuguese soybean market is threatened by EC-imposed quantitative restrictions on imports of oilseeds based on estimated Portuguese domestic consumption requirements for vegetable oils. These measures will be in place for the first five years after accession.

Based on an estimated domestic soybean oil consumption for food use requirement of 42,000 tons for March-December of this year, Portugal will be allowed to import 240,000 tons of soybeans without restrictions in 1986. Imports above this amount are permitted provided that all the oil produced is exported.

8 Foreign Agriculture

The EC also has introduced quotas on imports of oilmeals for domestic use (110,000 from third countries and 118,000 from the rest of the EC), but there are no restrictions on the domestic use of meal obtained from oilseeds crushed in Portugal.

The United States maintains that the quantitative restrictions on imports of oilseeds and products cannot be justified under the General Agreement on Tariffs and Trade. It also fears that the domestic soybean oil consumption quota could become restrictive. Because of these concerns, last May the United States introduced quotas of its own on imports of some EC products, including Portuguese wines.

However, the U.S. quotas will not be restrictive if the EC/Portuguese quotas are not. A future upward revision of the soybean quota is not excluded, as all quotas are subject to quarterly review.

The EC maintains that all these quantitative restrictions will be eliminated at the end of 1990, but extreme U.S. vigilance will be required to prevent the quotas from becoming restrictive and to make certain that they do not set a precedent for curbs on U.S. exports of soybeans and products to the entire EC.

In addition to policy constraints, the United States also faces strong competition from Argentina and Brazil in

the Portuguese soybean market. The U.S.

share of the market dropped from virtually 100 percent in 1983 to less than 50 percent in 1985.

RABSLOSS

It will be extremely hard to reverse this trend, but more competitive pricing and imaginative promotional initiatives might help. EC policies hinder overall market growth, but it will be up to the United States to regain the share of the market lost to foreign competition. The same considerations apply to sunflowerseed.

Cotton

Portugal is one of Europe's largest consumers of cotton and an important exporter of fabrics. Traditionally, the United States has supplied 10-14 percent of total raw cotton imports, but purchases of U.S. cotton came to a halt in the second half of 1985, mostly because of high U.S. prices.

October 1986 9

Traders are confident that prospects will start to brighten this fall. With more competitive U.S. prices, a weakened dollar and stepped-up promotional activity, the United States should be able to regain part of its lost market share in 1986-87, and possibly enlarge it later on.

Livestock and Products

The main markets are likely to remain hides and skins and tallow, as well as sausage Casings and semen. U.S. hides and skins are preferred to those of EC and domestic origin. Most imports are made through brokers in the Netherlands, with little direct contact between U.S. exporters and Portuguese importers.

Increased contacts and better credit terms (to match those offered by European competitors) could help boost U.S. sales. Imports of tallow vary widely from year to year, depending on local production.

In 1986/87, domestic production should be relatively high, but there may be stronger overall demand for tallow for exports of soap to other EC members.

Semen has been actively promoted. Though the total value is small, near-term prospects remain fairly good, and opportunities could develop for embryos.

High-Value Products

About 13 percent of Portugal's agricultural imports consist of processed products, but only about 3 percent of agricultural imports from the United States are in this category.

Actually, the share of processed products in Portugal's total farm imports has declined during the past decade as Portugal has developed its own oilseed crushing facilities.

Development of the market for high-value U.S. products will be an uphill struggle and a long-term proposition. Per capita income is low, and the country is small U.S. exporters will have to be willing to respond to rather small orders and to do business with small companies with relatively little experience in international trade. EC suppliers wil! have a built-in advantage.

Furthermore, Portugal's entry into the EC could stimulate the development of food processing industries and production of

Portugal at a Glance Land

Some 92,000 square kilometers, including the Azores and Madeira Islands; 49 percent arable; 31 percent forest; 6 percent meadow and pasture; 14 percent waste, urban, inland water or other.

People

Population: 10,095,000 (July 1986), including the Azores and Madeira Islands, average annual growth rate 0.5 percent.

Language: Portuguese

Literacy: 80 percent.

Labor Force: 4.5 million (1984); 37 percent services; 36 percent industry; 27 percent agriculture; 10.6 percent unemployment (December 1984). Government

Official name: Portuguese Republic.

Type: Republic, first government under new constitution formed July 1976.

high-priced horticultural crops, not just to service the small Portuguese market, but principally to export to the rest of Western Europe. Nevertheless, with appropriate promotional and follow-up activities, a small market for typically U.S. high-value products might gradually be

developed. Lj

The author is U.S. agricultural counselor in Lisbon

Capital: Lisbon.

National holiday: April 25. Economy

GNP: $19.2 billion (1984).

Agriculture: Generally underdeveloped; main crops—grains, potatoes, olives, grapes for wine; deficit foods—sugar, grain, meat, fish, oilseeds.

Major industries: Textiles and footwear, wood pulp, paper, cork, metalworking, oil refining, chemicals, fish canning, wine.

Exports: $5.2 billion (f.0.b., 1984); principal items—cotton textiles, cork and cork produts, canned fish, wine, timber and timber products, resin, machinery, appliances.

imports: $7.8 billion (c.i.f., 1984); principal items—petroleum, cotton, industrial machinery, iron and steel, chemicals.

Major trading partners: 58 percent European Community, 9 percent United States, 2 percent Communist countries, 18 percent other developed countries, 11 percent less-developed countries.

10 Foreign Agriculture

By Scott Horsfall

Exporters of California table grapes just experienced a banner year in overseas markets. Export sales reached a new high during the past marketing year, breaking the old mark set in 1982. Such success doesn't happen overnight. This month, Scott Horsfall, director of advertising and foreign market development of the California Table Grape Commission, tells FOREIGN AGRICULTURE how the Commission works to bring high-quality U.S. table grapes to consumers around the world.

Q. How did the California Table Grape Commission come into existence and what role does it play in promoting exports?

A. The California Table Grape Commission is the marketing and promotion arm of California's fresh grape industry. Established in 1968, the

California Table Grapes Enjoy A Great Year

Commission is a quasi-governmental organization which represents all of the state’s growers of fresh table grapes.

The Commission's domestic advertising and merchandising programs are well known, but it has not overlooked the foreign marketplace. For almost as long as the Commission has been in existence, it has devoted an important part of its efforts to export promotion. Last season, we conducted promotional activities in 15 countries.

Q. How many members belong to your organization and how does the Commission help them with exporting?

A. The Commission represents all fresh grape producers in California, about 1,100 today. Exports are promoted through merchandising programs in many countries throughout the worid. These programs are designed to increase demand for U.S. grapes in the target countries.

Q. How substantial is the export growth of California table grapes in recent years?

A. The table grape industry in California has just enjoyed its most successful export season ever. In 1985/86, some 38,479 metric tons of grapes were shipped to export markets, 58 percent more than the previous year and 24 percent more than the old record set in 1982.

The new record capped a decade of steady growth in table grape exports. Ten years ago, the U.S. grape industry exported just 15,985 tons of grapes to offshore markets. Since then, exports have grown at an average rate of 14 percent per season

Q. What triggered last season’s record export sales?

A. Although we'd love to say that the big increase in exports came as a direct result of our promotional campaigns, we must realistically look at a few other factors as well.

First of all, we saw a 30-percent reduction in the value of the U.S. dollar during the course of the 1985/86 marketing season This helped boost exports dramatically, especially in markets like Europe and Japan where the strong dollar has been a constraint on sales for several seasons

In addition, the huge domestic crop resulted in a lowering of shipping costs throughout the season. This served as a further price incentive to foreign buyers

And we promoted more heavily than ever in 1985/86. New programs in Singapore, Malaysia and Taiwan, as well as increased activities in Japan, Hong Kong and Panama, helped push exports to each of these markets to record levels

Q. Where are your largest export markets?

A. Hong Kong is far and away the leading export market for California table grapes In 1985/86, we shipped over 18,000 tons of grapes to Hong Kong—a 104-percent increase over the previous season

October 1986 11

To put this in perspective, the per capita consumption of California table grapes in Hong Kong last year was 7.7 pounds. In the United States, the per capita consumption of a// grapes—both domestic and imported—was only about 6 pounds.

Our other leading markets are also in the Far East, the region which has shown the most sustained export growth in recent years. Singapore, Taiwan, Japan and Malaysia are all expanding markets for California grapes.

In Central America, Panama continues to increase imports of fresh grapes despite economic and political uncertainties there.

Q. What about markets in Europe and elsewhere?

A. Last season, our exports to Europe reversed a five-year slide and began to show some renewed signs of life.

The lower dollar and a general boycott of South African grapes led to the increased interest in California grapes. Exports rose from 642 tons in 1984 to 2,026 tons in 1985/86.

Although we still have a long way to go to recapture market shares lost in Europe last season's gains were a welcome beginning. Prospects for the immediate future also look very good in Europe

Unfortunately, shipments to the Middle East failed to turn around. Despite lower prices and increased promotional activities, exports to Saudi Arabia and its neighbors fell for the fourth successive season.

When the Middle East economies were doing well a few years back, shipments of California grapes soared. However, the continuing worldwide oil glut has put these economies on shakier ground, and we found it harder to compete with the inexpensive grapes which are grown in the region, even though our quality is far superior.

In what was an excellent overall season for grape exports, this was the single negative development.

Q. How would you describe the typical growth market for U.S. table grapes today?

A. Generally, table grape exports are growing in countries that have stable, healthy economies. Because grapes are relatively expensive, many governments and importers consider them

unessential,” which leaves them way down on the lists of required imports. For this reason, developing and third-world countries have not been good grape markets.

Q. Who are our biggest competitors?

A. It used to be that California's grape exporters enjoyed a marketing “window” in the autumn and early winter months. During this period there was little competition from other countries.

This is no longer the case. Worldwide grape production has risen dramatically— as has the emphasis many countries now put on exports.

California's “window” no longer exists. As a result, our growers are becoming more export-conscious. To compete successfully, we have to continue to provide the finest quality grapes available in the world. And we have to promote vigorously and effectively.

In Europe, we compete during the early season with fresh grapes from Spain, Italy and Greece. These grapes are heavily subsidized by the European Community, which makes the competition harder for us.

During the late fall and early winter months, competition is increasing from Southern Hemisphere producers, such as Chile, South Africa, Australia and Argentina. The growing seasons in these countries start earlier each year, and competitors, such as Spain, continue to improve their cold storage facilities.

So, competition is going to become even more fierce in the future.

12 Foreign Agriculture

Q. How many other U.S. states produce and export table grapes?

A. California produces about 97 percent of all fresh table grapes grown in the United States. The rernainder is produced in Arizona. It is safe to say that virtually all exports of U.S. fresh table grapes are grown in California.

Q. How extensive have your market promotion activities been in recent years?

A. We have seen a real expansion. In the past three years we have begun significant new programs in Taiwan, Japan, Panama, the Middle East, Singapore and Malaysia. With the exception of the Middle East, each of these campaigns already has begun to pay big dividends.

In Panama, for instance, we began promoting table grapes on television and in local newspapers three seasons ago. Since then, each successive season has seen a new record for grape exports to Panama.

Our goal was to publicize the fact that grapes from the United States are available at times other than the traditionally strong Christmas season. Since our TV campaign began in 1984, our exports to Panama during September, October and November have doubled.

In Japan, where exports had long been sluggish, our new retail-oriented promotions have helped spur sales to record highs. We believe Japan is now on the verge of becoming a major U.S. grape market.

Q. What are your promotion plans for the future?

A. We plan to take full advantage of the current positive export environment by aggressively pursuing marketing activities worldwide. Our 1986 foreign marketing plan is our most aggressive ever, thanks in part to the increased funding we have received under the Targeted Export Assistance (TEA) program administered by the Foreign Agricultural Service.

The TEA money is intended to help the grape industry overcome the negative effects that European subsidies and other unfair trading practices have on U.S. grape exports. It has allowed us to launch a major promotional campaign in Japan, and to considerably strengthen most of our other existing programs.

As | mentioned, Japan appears poised to become a major factor in the grape export picture, and we're spending the largest portion of our TEA money there. The program targets both the retail trade and consumers, and it is the most extensive campaign we have ever undertaken.

In Hong Kong, a new program of in-store promotions with the increasingly important retail trade began earlier this year. This program complements our ongoing media advertising campaign in this crucial market.

In addition, this year will see a continuation—and, in many cases, an expansion—of existing market development programs in the Far East, Central America and Europe. However, we are putting our Mideast program on hold for the time being, at least until the market there becomes more promising.

Q. How would you describe the export

outlook over the next few years?

A. Exports are going to become more and more important to California growers. As crops continue to increase, as imports continue to put pressure on our early and late-season crops, and as production in peak growing periods continues to prove too great for domestic demand, we must look more to exports to market our crop.

The immediate future certainly looks positive. All the conditions that led to our big year in 1985/86 are still in place, and we anticipate another banner year. Perhaps it may be even stronger since quality is reported to be better this season.

So, | would say the export outlook for U.S. table grapes is excellent. A favorable exchange rate certainly helps, but the strongest factor is that we have a product which is highly prized throughout the world. Foreign demand is growing, and that augurs well for the California table grape industry. &

The author is Director of Advertising and Foreign Market Development, California Table Grape Commission, Fresno, Calif. Tel. (209) 224-4997.

U.S. Sweets Exporters Face Long Road in German Market

14 Foreign Agriculture

By Hilton P. Settle

West German consumers have a sweet tooth worth about $80 per person, but U.S. exporters who hope to cater to it should expect heavy competition from other European Community (EC) countries

West Germany's per capita consumption of chocolate, candy, sweets, cookies and crackers, other snack articles and ice cream stands at about 51.3 pounds per person

Per capita consumption levels were highest for chocolates, amounting to approximately 15 pounds per person. Consumption levels nearing 12 pounds were also reported for both candy and sweets, and cookies and crackers. These three food categories accounted for more than two-thirds of all 1985 snack food consumption in West Germany, and 77 percent of the money spent on snack foods

Sweets Sector Highly Competitive

The sweets sector of the West German market is marked by stiff competition, which generally results in low prices on the domestic market, especially for chocolates.

Germany itself produced about 1.4 million tons of chocolate, candy, sweets, cookies and crackers, snack articles and ice cream in 1985, up 2 percent from the year before

About 19 percent of total production, or 261,000 tons, is estimated to have been exported during 1985—an increase of nearly 18 percent over that of the previous year. The value of these exports increased 18 percent to almost $740 million

Nearly two-thirds of the exports went to other EC countries, primarily France, the Netherlands, Belgium, Luxembourg and the United Kingdom. The remainder went to another 125 countries around the world, of which the United States and Switzerland were the most important.

At the same time, Germany also imports a sizable amount of sweets and snack items. Imports in this sector during 1985 rose nearly 9 percent to 280,000 metric tons, However, nearly 80 percent of the imports originated from other EC countries, reflecting the high duties that third countries generally face in exporting to the West German market.

Due to the heavy competition and relatively high import duties, U.S. companies interested in exporting these products should work with a potentially interested importer to obtain relevant market and tariff information.

While some shipments of chocolates and candies from the Unites States are taking place, the greatest potential exists in the snack foods area and in supplying raw materials to product manufacturers in this sector.

Germany imported 157,000 tons of raw ingredients, including nuts, dried fruits, fruit fillings, egg products, flavorings and spices in 1985. U.S. companies interested in exporting these products should contact the U.S. Agricultural Trade Office in Hamburg for lists of potential importers.

Annual Sweets Fair in Cologne

In addition, companies interested in this sector may wish to visit, or exhibit at, the International Sweets and Biscuits Fair which is held annually in Cologne

A total of 15,500 trade visitors from 83 countries attended the 1985 fair, where 878 firms from 39 nations exhibited

Exporters interested in participating in the International Sweets and Biscuits Fair in Cologne, West Germany, on Jan. 25-29, 1987, should contact

Mr. Hannes Bucerius Messe-und-Ausstellungs-Ges. m.b.H.- Koehin

Phone: (221) 821-22-14 or 821-29-02 Telex: 8873426 mua d

Cable: Intermess Koeln &

The author is U.S. agricultural trade officer in Hamburg, West Germany. Tel (011-49-40) 341-207

Fact File: The Targeted Export ee Assistance Program

The Food Security Act of 1985 authorized a new export promotion effort called the Targeted Export Assistance (TEA) Program. Under the TEA program, the U.S. Department of Agriculture (USDA) uses surplus stocks from the Commodity Credit Corporation (CCC) to partially reimburse agricultural organizations for export promotion programs they undertake. The specific goal of the program is to help producers who are disadvantaged by the unfair trade policies of competitor nations. USDA gives first consideration for TEA programs to agricultural products which have been found, under Section 301 of the Trade Act of 1974, to have had their exports adversely affected by a foreign government's policy. The law requires USDA to spend at least $110 million in funds or CCC commodities for each fiscal year from 1986 through 1988.

How the Program Works

The TEA program is administered by the Foreign Agricultural Service (FAS) and funded through the issuing of CCC certificates under agreements between CCC and U.S. trade associations, state marketing organizations or private companies. These organizations conduct foreign market development projects for eligible commodities in specified countries. There are two basic types of TEA programs: a generic promotional program with nonprofit agricultural associations and state organizations, or a brand-identified or high-value promotional program with private U.S. firms.

Program proposals may be developed by FAS, trade associations or state marketing organizations. Once approved, program agreements are drawn up and signed by the participating organization or private firm and CCC. The TEA participant then submits an activity plan to FAS describing specific activities and proposed budgets, which are reimbursable with

CCC certificates. These certificates may be redeemed for commodities from CCC stocks or sold.

When FAS approves the activity plan, the organization can request an advance of CCC commodity certificates equal to 40 percent of the dollar amount stated in the agreement. No further certificates are issued until the organization submits expense claims sufficient to offset the original advance.

Afterwards, certificates are issued on a reimbursement basis up to the dollar limit in the agreement.

TEA Programs in Operation

As of August 21, USDA has approved proposals for 18 TEA programs worth nearly $70 million. Activities financed by the programs vary from commodity to commodity. For example, a program to promote exports of U.S. wood products to Japan has financed the construction of

a three-story wood demonstration building featuring advanced timber technology. The demonstration unit will provide the focal point for a promotional and technical program.

The goal of a promotion program targeted to Algeria is to promote exports of U.S. feed grains, soybean meal and dairy cattle to that country by helping the Algerians develop livestock and poultry production industries. The export assistance will be used to build model beef, dairy, poultry and sheep farms and a feedmill.

Some TEA programs have been in operation for several months and have already produced results. For example, the TEA program for canned fruit, approved in April, helped increase exports by the next month. U.S. exports of cling peaches to Japan during May exceeded exports for the entire previous season and pushed the yearly total for Japan 176 percent over last year.

16 Foreign Agriculture

A brief summary of each TEA program is presented below.

Potatoes: The National Potato Promotion Board is undertaking a $2-million program for frozen potatoes in the Pacific Rim countries of Japan, Hong Kong, Taiwan, Malaysia and Singapore.

California and Arizona Citrus: Private U.S. firms are participating in a TEA program totaling $8.5 million to promote California and Arizona fresh and processed citrus in the Pacific Rim countries of Japan, Hong Kong, Singapore, Malaysia, Taiwan, Korea and New Zealand.

Raisins: The California Raisin Advisory Board is conducting a $6.3-million promotion effort in Western Europe and Pacific Rim countries.

Wainuts: The Walnut Marketing Board is spending $9 million on market promotion in Western Europe, Japan, Taiwan and Australia.

Canned Fruit: The California Cling Peach Advisory Board is using $2.5 million to promote canned peaches and fruit cocktail in Japan and Taiwan in 1986 and has a $5.1-million program approved for Pacific Rim and Middle East countries in 1987.

Almonds: Qualified industry participants will receive $900,00G to promote almonds in Western Europe, Japan and Korea.

Wine: The Wine Institute is receiving $2.3 million to promote wine in Japan, the United Kingdom, Hong Kong and Singapore.

Wood Products: The American Plywood Association is spending $1.95 million promoting

wood products in Japan in 1986 and has a $653,000-program approved for the United Kingdom in 1987.

Dried Prunes: The California Prune Board is receiving $4 million to promote dried prune exports to Western Europe.

Florida Citrus: The Florida Department of Citrus is spending $4.6 million to promote fresh and processed citrus exports in Western Europe and the Pacific Rim.

Feed Grains, Soybean Meal and Dairy Cattle: FAS and three organizations—the U.S. Feed Grains Council, the American Soybean Association and the Holstein-Friesian Association of America—will carry out a three-year, $9-million export market promotion program for feed grains, soybean meal and dairy cattle to Algeria. Funds will be used to develop livestock and poultry production in that country.

Poultry and Eggs: The USA Poultry and Egg Export Council will work on a $6-million program to expand poultry and egg exports to Pacific Rim and Middle Eastern countries.

Wheat: U.S. Wheat Associates will receive $1.1 million to expand wheat exports to developing countries.

Washington Apples: The Northwest Horticultural Council will use $1.4 million to expand

exports of Washington State apples to the United Kingdom and Scandinavian, Pacific Rim and Arab Gulf countries.

Dry Peas and Lentils: The U.S. Dry Pea and Lentil Council will spend $2.5 million to expand exports of dry peas and lentils to the European Community, Colombia and India.

Table Grapes: The California Table Grape Commission will receive $350,000 to expand exports of California table grapes to Pacific Rim countries.

Feed Grains: The U.S. Feed Grains Council will spend $2.1 million to expand exports of U.S. feed grains and feed grain products (corn, sorghum, barley, corn gluten and malt).

For more information on the TEA program, contact: Beth Callanan, FAS. Tel. (202) 447-5521.

BSE SD Hong Kong Is Tops At Cracking U.S. Shell Eggs

By Michael L. Humphrey

While most people think of Hong Kong as a small market, it is, in fact, the largest export market for U.S. shell eggs. In 1985, the United States exported over 7 million dozen shell eggs valued at $4 million for food use in Hong Kong. That market alone accounted for half of the volume and 40 percent of