Global coalition calls for action as crisis worsens
Global fresh produce industries have come together to call for urgent action from regional public authorities and multilateral bodies such as the WTO, FAO, UNCTAD, OECD and others as the global supply chain crisis worsens.
The Global Coalition for Fresh Produce, which comprises Freshfel, SHAFFE, the International Fresh Produce Association, Copa-Cogeca, ColeACP, Afruibana and the Chinese Chamber of Commerce, said significant increases in logistics costs, inputs such as fertilizers, materials packaging and energy. , and a general labor shortage are jeopardizing the economic viability of the fresh produce industry globally.
“While the sector has shown its resilience during the last two years of the Covid pandemic, the current global supply chain challenges have had cascading negative effects for all parts of the industry,” it said in a statement.
“The sector has seen cost increases in multiple areas, including: 150-400% in container prices, 20% in trucking, up to 80% in air freight, up to 100% in fertilizer costs and up to 100% in the prices of wooden pallets.”
Southern Hemisphere producers estimate costs will increase by US$3.800bn in 2022 as a result of higher container prices.
In Europe, growers and traders said they face a total cost increase of €10.000bn for this year from all the challenges along the supply chain, plus an additional €4.000bn for additional logistics costs. .
The North American fresh produce industry reports container prices have risen to as high as US$25.000, a "huge" increase from pre-pandemic costs of around US$3.000.
Elsewhere, more than 86 percent of ColeACP members are concerned that their economic viability will be affected by current logistics disruptions, and more than 70 percent said they are considering implementing business changes.
"In light of the above, the Global Coalition for Fresh Produce urges key stakeholders and public authorities to undertake urgent solutions to stabilize the sector in a period of crisis," the statement said.
The group has established several potential mechanisms to preserve the economic viability and short-term sustainability of the sector:
- Greater attention and recognition of fruits and vegetables as a "strategic good" that has a significant contribution to the long-term sustainability of the planet and public health policies.
- The creation of stabilization mechanisms to improve the accessibility of fresh products, to ensure that fruits and vegetables can continue to be available to all.
- The introduction of transport subsidies for producers and exporters of fruit and vegetables in order to alleviate the immediate impact of inflated price distortions in the shipping market.
- Introduction of a worldwide zero VAT strategy for fruit and vegetables that would directly benefit producers, exporters and consumers.
- Greater access to key export markets through the reduction of tariffs and quotas.
- Avoid aggressive promotional price discounts available to end consumers that undermine the value of fresh produce and ultimately reduce already stretched margins for growers and exporters.
- More investment in public promotions aimed at increasing the consumption of fresh fruits and vegetables during the off-season in the Southern Hemisphere.
The Global Fresh Produce Coalition said it was committed to continuing to work on sector-based solutions, both together and in their respective regional contexts. But he warned that these issues can only be addressed through public-private collaboration, "in which we intend to be a constructive and proactive part."