Required Report - public distribution

**Date:** 10/1/2004

**GAIN Report Number:** GR4026

GR4026

**Greece**

**Canned Deciduous Fruit**

**Semi-Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Ann Murphy

U.S. Embassy Rome

**Prepared by:**

Stamatis Sekliziotis

**Report Highlights:**

Greek freestone and cling peach production in 2004 is estimated at
780,00 tons, a bounce back from the 2003 crop which was only about one
seventh of the 2004 crop. The 2004 processed peach product estimate is
for 315,000 tons and exports of these are estimated at 280,000 tons.
Apricot production for 2004 is not revised from the previous report, GR
4006.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Semi-Annual Report

Rome \[IT1\]

\[GR\]

Table of Contents

[Executive Summary 3](#executive-summary)

[PS&D Table, Canned Peaches 6](#psd-table-canned-peaches)

[PS&D Table, Canned Mixtures 7](#psd-table-canned-mixtures)

[PS&D Table, Canned Apricots 8](#psd-table-canned-apricots)

# Executive Summary

Weather conditions for 2004 were relatively favorable for the Greek
peach crop. In the beginning of April 2004, peach trees promised a rich
crop. At this point the 2004 total peach production (both clingstone and
freestone) is reported at a high yield, estimated at 780,000 tons
(figure is revised downwards from that reported in GR 4006 in April
2004). About 50,000 tons were not harvested due to hail damage occurring
in a few pockets of central Macedonia. The damaged, unmarketable amounts
are not included in the attached PS&D for canned peaches, as they are an
un-utilized amount of fruit. These figures are subject to further
revision later in the season.

  ------------------------------------ ----------------- ----------------
                                       2003              2004

  Metric Tons                                            

  Peaches                                                

  Clingstone                           64,000            450,000

  Freestone                            44,000            280,000

  Not Harvested (left on Trees)        \-                50,000

  Total peaches                        108,000           780,000
  ------------------------------------ ----------------- ----------------

The utilization of the 2004 and 2003 peach crops, based on official data
and the latest estimates, is as follows. The 2004 figures and breakdowns
per category of product are preliminary and subject to further revision,
due to lack of accurate estimates by both farmer and processing
organizations. Processed amounts cited, are to be considered more
accurate.

  -------------------------------------- ---------------- ----------------
                                         2003 (MTs)       2004 (MTs)

  Processed for canned peaches           50,000           260,000

  Processed for other products           20,000           150,000

  Fresh Domestic Production              32,262           280,000

  Fresh Exports                          11,738           90,000

  Total Marketed peaches                 114,000          690,000

  Withdrawals (clingstone)               \-               40,000

  Farm Use, Waste (left on tree)         \-               50,000

  Total                                  114,000          780,000
  -------------------------------------- ---------------- ----------------

The amount of clingstone peaches to be delivered to processors for
canned peaches is currently estimated at 260,000 tons. An additional
150,000 tons will be channeled to processing for other products (puree,
diced and frozen) as well as to the juice sector (approximately 80,000
tons). Withdrawals took place according to the EU Regulation in effect,
which cannot exceed 10% of the total marketable amount.

In MY 2003/04 clingstone peach farmers received the record price of
€0.60/kg, which was extremely high due to the shortage of clingstone
peaches. This year was a very different case and the final price for
farmers has been decided at € 0.22 /kg after long negotiations between
their organizations and the processors. Initially, farmers asked for €
0.26 /Kg, while processors were offering only € 0.18. The final figure
agreed was € 0.22/kg farm gate price. This year, farmer organizations
and producers stated price negotiations in May 2004 and continued for
almost two months. Farmers have asked the Minister of Agriculture to
intervene and influence processors to take their initial proposed price,
but a final compromise was achieved for € 0.22/kg. For the MY 2004/05 a
support price, which is paid directly to growers, is still set at
€.0477/kg.

The 2004 processed product output is estimated at 315,000 T (over
14,000,000 Boxes equivalent to 24X1kg). According to processors, the
cost of production is very high and Greek peaches are currently priced
at € 11 per box 24X1kg (ex-factory basis). In 2003/04 MY, there was a
remarkable rise in export prices due to the failure of the peach crop in
2003. According to the industry, the absence of Greek canned products
from international markets in MY 2003/04 has created instability in the
market and has allowed other competitors like Spain to sell canned
products at higher prices. For the MY 2004/2005, Greek exports are
expected to recover although competition from other countries is
particularly stiff, mainly from similar Chinese products. A preliminary
estimate for Greek exports in MY 2004/2005 is for 280,000 T of processed
product. By the end of 2004/05 MY, processors are expecting to increase
stocks significantly, compared to the previous year, in order to become
competitive in the future.

Reportedly, exports to the US are expected to be reduced further during
the upcoming marketing season, due to the dollar value against the euro.
In CY 2002, Greek processors have sold only about 16,000 T of canned
peaches to the US, followed by a drop to 6,000 T in CY 2003 and this
year it may drop further.

Concerning the recent US Proposal for potential withdrawal of Tariff
Concessions and Increase in Applied Duties in response to EU Enlargement
and EU Changes to its Rice Import Regime, the Greek Deciduous Fruit
Processing Industry has strongly reacted, after peaches were added to
the list of goods for which tariff concessions might be withdrawn and
duties might be increased from 17 to 55 percent for their processed
products destined to the US. The Greek processing Association
representatives in Northern Greece have characterized the proposal as
"totally unacceptable" and they are planning to submit their complaints
to GOG Ministries of Agriculture and Commerce.

For the 2003 severely damaged peach crop, farmers, according to measures
taken by the Government of Greece to compensate them (discussed in
detail in GR3021 and GR4006) have received the amount of €0.278/kg plus
the EU support price of €0.048/kg and the price paid by the processors,
which was set at €0.6/kg. All compensation payments have been made by
March 2004. For those farmers who lost part or their entire 2004 crop,
after last summer's hailstorms, the ELGA Organization (Hellenic
Agricultural Insurance Fund) will proceed with compensation payments,
after accurate fruit damage estimates are completed per area and grower.
No actual compensation payments have yet been announced by ELGA.

Farmers and processors agree that last year (2003) was profitable for
the farmers despite the short peach crop mostly due to the package of
compensation measures taken by the Greek Government. In addition,
farmers were relieved from their old debts to the Agricultural Bank of
Greece, after a recent GOG Ministry of Agriculture political decision,
that old debts of individual farmers and/or farmer groups and
cooperatives to the Agricultural Bank of Greece, can be rescheduled up
to the end of October 2004 with as many as 60 monthly installment
payments. This political decision affects all farmers in Greece. It was
made by the new GOG (elected March 2004) and it applies to all loans
taken for various reasons (purchase of agricultural machinery &
equipment, chemical supplies, irrigation systems, farm buildings, etc).
Under this decision, the total loan pay offs must be less than double
the initial capital borrowed by farmers. Farmers of less favored areas
around the country were favored the most, but also tree fruit growers in
Central Macedonia were helped by this measure.

On the other hand, the Greek Government has not favored the processing
industry which was the only sector adversely affected by bad weather
conditions last year. Not surprisingly, the GOG's recent measures for
support to the primary sector, such as the rescheduling of bank loan
payments, were criticized severely by processors who believe that
similar measures should be taken for their sector.

The production of canned mixtures reached the level of 1,200,000 boxes
(24x1) in 2003/04. In MY 2004/05, canned mixtures production is
preliminarily estimated to reach satisfactory levels at approximately
1,870,000 cases (24x1) and possibly more. This figure is subject to
further revision later in the year. Processors are hoping to increase
the amount of canned mixtures exports this year.

For the 2004 apricot crop no changes are reported until this present
time and processing amounts and output remain at levels reported in GR
4006.

# PS&D Table, Canned Peaches

![](media/image2.wmf)

#  

# PS&D Table, Canned Mixtures

![](media/image3.wmf)

#  

# PS&D Table, Canned Apricots

![](media/image4.wmf)