Required Report - public distribution

**Date:** 1/15/2004

**GAIN Report Number:** GR4002

GR4002

**Greece**

**Kiwifruit**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)David Leishman

U.S. Embassy Rome

**Prepared by:**

Stamatis Sekliziotis

**Report Highlights:**

Severe frost during the spring of 2003 had a significant effect Greek
Kiwi production. Nevertheless, planted area is increasing, and Greek
kiwi production could soon become more significant as the industry tries
to improve its processing and marketing capabilities.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Rome \[IT1\]

\[GR\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[I. Situation and Outlook 3](#i.-situation-and-outlook)

[Production 3](#production)

[Consumption 4](#consumption)

[Stocks 4](#stocks)

[Trade 4](#trade)

[Marketing 5](#marketing)

[Policy 5](#policy)

[PS&D Table, Fresh Kiwifruit 7](#psd-table-fresh-kiwifruit)

[Export Trade Matrix, Kiwifruit 8](#export-trade-matrix-kiwifruit)

[Import Trade Matrix, Kiwifruit 9](#import-trade-matrix-kiwifruit)

# Executive Summary

# I. Situation and Outlook

# Production

The severe frost, which prevailed mostly in Northern Greece during April
2003, reduced kiwi fruit production by almost 40 percent compared to a
year earlier and reached only 18,000 MT. This is the worst output in
recent years. The 2002 harvest, which is also considered to be low,
reached 30,000 MT. Under normal weather conditions, Greek output has the
potential to exceed 50,000 MT.

With the reduced 2003 harvest, adverse weather conditions also affected
the size of the kiwi fruit, which appeared to be smaller than average
compared to previous years.

The northern Greek district of west Macedonia, which is the major kiwi
fruit producing area, had one of the worst harvests in terms of quality
and quantity, yielding only 7,000 MT compared to 20,000 MT 25,000 MT in
previous years. After the year 2000, the introduction of new plantings
in this region, which are currently estimated at around 700 hectares,
did not have the chance to increase kiwi fruit output due to continuing
adverse weather conditions.

In the prefectures of Arta and Preveza (western Greece) there was also a
drastic reduction in fruit output. In these areas, 2003 production is
reported to be 5,000 MT compared to 12,000 MT in 2002. The small size of
the kiwi fruit this year was also a serious problem for the region.
Although in 2003 was a small crop, in the Arta prefecture the
cultivation of kiwis seems to be profitable for most farmers. Recently,
another 500 hectares were introduced for planting, replacing traditional
cultivations such as cotton, tobacco and corn .

According to some producers, the average yield of kiwifruit under normal
weather conditions in Greece is close to 30 MT/ha, but this year the
yield decreased drastically to only 5-6 MT/ha due to the severe frost
which hit during the Spring of 2003.

According to farmer groups and local co-operatives, grower prices for
the three major producing prefectures were within the following range:

  ----------------------- ----------------------- -----------------------
  Grower prices                                   

  Prefecture              2002                    2003

                          Euro/kgr                Euro/kg

  Pieria                  0.55-0.60               0.50

  Preveza-Arta            0.65                    0.50-0.60
  ----------------------- ----------------------- -----------------------

Lower farm prices for the 2003 harvest compared to a year earlier were
due to the small size of the kiwi fruit, which tends to be less
desirable among Greek consumers and international markets.

According to EU Reg.No 410/90, which sets the quality standards for
kiwifruit, the timing harvest depends on the Brix of the fruit which for
this year was set at 8,5-9 Brix for EU shipments and 6,2 Brix for
shipments outside EU.

No price supports or subsidies are available because kiwi fruit is not
supported by the EU Common Agricultural Policy .

The introduction of over 700 hectares into acreage in 2003 is considered
to be very positive development for the future output of kiwis in
Greece.

# Consumption

The analysis of the total domestic kiwifruit consumption during the last
two years as compared to forecast figures for the 2003 crop, which are
subject to further revision next year, is as follows:

  ----------------------- -------------- -------------- -----------------
                          2001/02        2002/03        2003/04

  Metric Tons                                           

  Fresh Consumption       18,500         7,784          3,000

  Farm Use                500            400            200

  Processed               Neg.           Neg.           150

  Waste and Losses        2,500          3,586          1,650

  Total Domestic          21,500         11,770         5,000
  Consumption                                           
  ----------------------- -------------- -------------- -----------------

Waste and losses include both fruit rejected during harvest as well as
losses and sorting during prolonged storage. Kiwis in Greece are
consumed mostly as fresh fruit, and only a very small percentage is
dedicated to the processing sector for the preparation of confectionary
products.

Due to the fact that Greek consumers show a high preference for kiwi
fruits of larger size, the small size of the fruit this year may
adversely affect fresh domestic consumption. Fruits of larger size will
be introduced into the market at extremely high prices.

# Stocks

The small 2003 crop did not encourage long-term cold storage of kiwis
since fruits of larger size and better quality were already being sold
in the EU and in the international market.

# Trade

According to the Greek Ministry of Agriculture, exports of kiwis are
still under way. As of December 5, 2003, 3,605 MT have already been
exported (2,075 MT to EU countries) compared to 35,061 MT the same
period a year earlier (2,307 MT to EU destinations).

The drastic reduction of exports this year, due to a lack of kiwifruit,
caused anxiety among co-operatives and exporters, who are now hoping for
better weather conditions next season.

An indicative ex-factory price for kiwis this year is 2 Euros/kg (packed
and ready to be marketed). The most common exported packaging of kiwis
in Greece is in paper carton boxes of 10 kgr, 3kgr and 1kgr.

In the prefecture of Arta, very few trade agreements have taken place
this year due to the small size of the fruit.

A large percentage of Greek kiwis are destined mostly to the Eastern
Europe, In MY 2002/03 a total of 6,259 MT was exported to EU countries
compared to 6,495 in MY 2001/02. Exports to the EU are mostly destined
to England and Germany.

# Marketing

The Organization for Certification and Supervision of Agricultural
products (OPEGEP), which was established by the Ministry of Agriculture,
has the responsibility to certify agricultural products, to promote
exports and to apply specific labeling. OPEGEP is also responsible for
EU subsidy payments to farmers all kind. This organization certifies and
supervises agricultural organic products and the implementation of
environmental friendly agricultural practices, which are set and
subsidized by the EU. Kiwifruit are, along with other products such as
olive oil, peaches, asparagus, table grapes, fish farming and cheese
industry products, under the supervision of OPEGEP.

"ZEUS kiwis S.A" is the first kiwi packing and trading company in Greece
to obtain certification for environmental friendly agricultural
practices and for the cultivation of kiwis under an integrated system,
which minimizes the use of agrochemicals, According to the Ministry of
Agriculture, the eco-friendly certification gave the company a boost in
its exports. Currently, the company exports kiwifruits to more than 30
countries all over the world.

Organic kiwis certification is also carried out by private organizations
and/or companies, which are accredited by the Greek Ministry of
Agriculture. The key Quasi-Governmental Certification organization of
Greece is AGROCEPT. AGROCEPT was established a few years ago and
operates under a private company law, but also receives funding from the
Greek Government to supplement farmer contributions (product
certification charges).

Despite the potential of kiwis to increase market penetration, the cost
of production and certification is still extremely high, currently
estimated at 200 Euro/ha. The international market, particularly the
market in Western Europe, has not been very willing to pay higher prices
for certified products. Due to this, the kiwi crop in Greece is
considered to be a supplementary cultivation, which is carried out not
only by full-time farmers, but also by part-time producers who have
other income sources.

# Policy

According to EU Regulation No. 2066/2002, the kiwi of Pieria (Aktinidio
Pierias) was registered as a product under Geographical Indication (GI).
In this region, one of the most important agricultural unions in Greece
is the Union of Agricultural Co-operatives of Pieria, which among other
products also trades large quantities of kiwis. The cooling facility and
packing capacity of this co-operative is exceptional and is estimated at
10,000 MT/year of fresh fruit basis.

In recent years new plantings in all regions of Greece are estimated at
approximately 1,000 ha, which will potentially increase kiwi output to
more than 70,000 MT in the near future. According to trade and
co-operative sources, with this increase in production, the trading and
marketing sector may not be prepared to handle such an increase. To
avert the possibility of oversupply, the kiwi sector is thinking about
establishing an inter-professional organization that will deal
exclusively with the promotion of kiwis.

The small size of orchards and their scattered distribution is a major
difficulty with Greek kiwi production, especially in the prefectures of
Arta and Preveza. Cultivation costs tend to be fairly high and it is
difficult to achieve economies of scale. The lack of a kiwi processing
industry is another problem, which has been an obstacle for the
development of the kiwi sector. The low output does not facilitate the
operation of such an industry. As kiwi production increases, a
well-organized processing sector will be necessary, especially in order
to absorb the smaller sized kiwi fruits.

The Agricultural Insurance Fund (ELGA) has already initiated
compensation payments for the spring frost. Payments were calculated by
ELGA's field agronomists based on estimates of the magnitude of crop
damage. No compensations were made if kiwi damage is less than or equal
to 30 percent of the farmer's total crop. For damages that exceeded the
threshold, farmers could receive a compensation for up to 88 percent of
total damages.

In view of the EU-25 expansion, trading of fresh Mediterranean products
is expected to grow.

# PS&D Table, Fresh Kiwifruit

![](media/image2.wmf)

# Export Trade Matrix, Kiwifruit

![](media/image3.wmf)

# Import Trade Matrix, Kiwifruit

![](media/image4.wmf)