Required Report - public distribution

**Date:** 6/22/2004

**GAIN Report Number:** UK4015

UK4015

**United Kingdom**

**Asparagus**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Valerie Brown-Jones

U.S. Embassy

**Prepared by:**

Phil Bicknell

**Report Highlights:**

UK asparagus production for the marketing year beginning January 2004 is
forecast at 1,800 MT. Although improved varieties and technology may
extend the UK growing season in the future, the UK is reliant on imports
to meet year round demand. Peru and Spain are the preferred suppliers to
the UK, with the U.S. exporting just 477 MT of asparagus to the UK in
MY2003.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

London \[UK1\]

\[UK\]

Table of Contents

[PS&D Table 3](#psd-table)

[Production 3](#production)

[Consumption 4](#consumption)

[Trade 5](#trade)

[Import Matrix 6](#import-matrix)

[Export Matrix 6](#export-matrix)

[Policy 7](#policy)

[Marketing 7](#marketing)

# PS&D Table

  ------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------
  Country       United                                                              
                Kingdom                                                             

  Commodity     Asparagus,                                    (HA)(MT)              
                Fresh                                                               

                2001         Revised    2002       Estimate   2003       Forecast   UOM

                USDA         Post       USDA       Post       USDA       Post       
                Official     Estimate   Official   Estimate   Official   Estimate   
                \[Old\]      \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  Market Year                01/2002               01/2003               01/2004    MM/YYYY
  Begin                                                                             

  Area Planted  856          806        870        874        0          910        (HA)

  Area          856          806        870        874        0          910        (HA)
  Harvested                                                                         

  TOTAL         1800         1673       1925       1847       0          1900       (MT)
  Production                                                                        

  Imports,      5699         5699       5625       6131       0          6550       (MT)
  Fresh                                                                             

  TOTAL SUPPLY  7499         7372       7550       7978       0          8450       (MT)

  Exports,      54           54         50         138        0          100        (MT)
  Fresh                                                                             

  Domestic      7445         7318       7500       7840       0          8350       (MT)
  Fresh Market                                                                      

  For           0            0          0          0          0          0          (MT)
  Processing                                                                        

  TOTAL         7499         7372       7550       7978       0          8450       (MT)
  UTILIZATION                                                                       
  ------------- ------------ ---------- ---------- ---------- ---------- ---------- ---------

# Production

UK fresh asparagus production for Marketing Year (MY) 2004 is forecast
at 1,900 MT. This represents a small increase on the production levels
recorded in MY2003. Domestic production is being driven by the long-term
growth of the planted area of asparagus, as illustrated in the chart
below. The current crop represents the fourth successive year on year
increase in planted area.

Chart 1: Planted Area of Asparagus in the UK MY1990 - MY 2004 (forecast)

![](media/image2.wmf)

Source: Department for Environment, Food and Rural Affairs (Defra)

The PS&D table contains revisions to area and production data for MY2002
and MY2003. This follows the publication of updated information from
Defra and is based on the latest Agricultural and Horticultural Census
for the UK.

The major asparagus growing areas are Norfolk, Suffolk, Cambridgeshire
and Lincolnshire in the East, Essex and Kent in the South East and the
Vale of Evesham in Central England. UK commercial production is
monopolized by green varieties; purple and white varieties have been
trialed in the past with little success. European varietals dominate in
the UK, accounting for approximately 90 percent of UK asparagus.

Traditionally, the UK asparagus season lasts eight weeks and harvesting
is typically complete by mid/late June. However, the increasing use of
technology could help to extend the season. Use of plastic covers means
that beds which are only two years old can come into production in early
April. Growers utilizing plastic tunnels have also observed improved
quality and less variation in crops. In mainland Europe, the use of
plastic tunnels is reported to have boosted asparagus yields. In
addition, the adoption of new varieties could further extend the UK
asparagus season. With new asparagus area set to come online, the
domestic industry is expected to grow steadily. Although the industry
have identified the potential for import substitution, the growth in
demand for asparagus is unlikely to yield any significant reduction in
import reliance.

Although the asparagus area is increasing, the UK asparagus industry
remains on a small scale when compared globally. According to FAO data,
the UK does not feature in the leading 20 producers of asparagus in
terms of either area or production. Total UK production in MY2003
equated to less than 1 percent of the Peruvian crop and less than 1.5
percent of the U.S. asparagus harvest.

# Consumption

With both domestic production and imports on an upward trend, there is a
belief among the industry that asparagus is no longer a minority
vegetable. The retail value of the sector is estimated at some £49m
(US\$ 88m). Domestic asparagus accounts for just over one third of this
sales value, reflecting the premium price that it typically commands
over imported varieties.

There is still huge potential for further expansion even though the
market for fresh asparagus has grown over recent years. Market
penetration remains low, with only 11 percent of consumers buying
asparagus regularly. Although it may no longer be described as a
minority vegetable, there is certainly the consumer perception that
asparagus is a luxury vegetable. That said, distribution is now
widespread, with in excess of 80 percent of sales occurring through the
supermarket sector. Consumers may still regard asparagus as a luxury,
but it is certainly not an exclusive product and is likely to be
obtainable in most supermarkets.

Asparagus is increasingly likely to be pre-packaged in supermarkets and
loose bundles of asparagus are being replaced by enhanced packaging
variants. This allows for the effective communication of preparation
instructions and recipe ideas, which are regularly seen as barriers to
purchase. Indeed, consumer surveys reveal that asparagus is also used
more widely, in dishes such as risotto, pasta and stir fries.

The consumer view of asparagus as a luxury vegetable has undoubtedly
been shaped by its popularity with upscale foodservice outlets, where it
still remains a favorite. The tendency in the foodservice sector is to
utilize longer shoots with a wide diameter. This is in contrast to the
retail trade, where the preference is for shorter and narrower
asparagus. With the majority of the asparagus from Peru and Spain
fitting these criteria, the widely held belief is that the majority of
U.S. asparagus is used by the foodservice sector.

## 

# Trade

The UK is reliant on imports to meet the year round demand for
asparagus. Imports in MY2003 increased by 8 percent compared to the
volumes imported in MY2002. Indicative of the longer term growth in
demand for asparagus is the fact that import volumes in MY2003 were
almost double what they were in the late 1990s. UK companies continue to
develop strategic alliances with key overseas suppliers to guarantee
year round availability. As a result of growing demand and an
increasingly efficient supply chain, import volumes are again forecast
to increase in MY2004.

Peru displaced Spain as the leading supplier of asparagus to the UK in
MY2003 and initial trade data indicates that Peru will strengthen this
position through MY2004. Peruvian asparagus accounted for 48 percent of
UK imports in MY2003, compared to 35 percent in the previous year. By
contrast, the import share of Spanish asparagus fell from 39 percent in
MY2002 to 23 percent in the most recent marketing year. The majority of
Spanish asparagus imports occur between February and July. Peruvian
supplies then dominate the market from July until late winter.

In comparison, volume and value of shipments from the U.S. have remained
relatively constant over the last 3 marketing seasons, despite the
upward trend in import volumes. The current U.S. share of UK asparagus
imports is relatively small (approximately 8 percent) and the total
value of shipments is approximately US\$ 1million. With the additional
punitive duties currently placed on U.S. asparagus (see Policy section),
a reduction in the volumes shipped to the UK market is anticipated.

There was a dramatic increase in UK exports of asparagus in MY2003,
recording year-on-year growth of over 150 percent. However, this was
from a base of just 54 MT and the UK typically exports minimal volumes
of asparagus, primarily to Ireland.

## Import Matrix

  ----------------- ----------------- ----------------- -----------------
  **Country**       United Kingdom                      

  **Commodity**     Asparagus, Fresh                    

  Time Period       Jan-Dec           Units:            MT

  Imports for:      2002                                **2003**

  U.S.              448               U.S.              477

  Others                              Others            

  Spain             2233              Peru              2959

  Peru              1995              Spain             1422

  Thailand          288               South Africa      319

  France            207               Thailand          283

  Netherlands       123               Germany           158

  Italy             91                Netherlands       134

  South Africa      90                France            104

  Chile             60                Italy             45

  Germany           48                Guatemala         33

  Hungary           43                Dominican         32
                                      Republic          

  Total for Others  5178                                5489

  Others not Listed 73                                  165

  Grand Total       5699                                6131
  ----------------- ----------------- ----------------- -----------------

## Export Matrix

  ----------------- ----------------- ----------------- -----------------
  **Country**       United Kingdom                      

  **Commodity**     Asparagus, Fresh                    

  Time Period       Jan-Dec           Units:            MT

  Exports for:      2002                                **2003**

  U.S.              0                 U.S.              0

  Others                              Others            

  Ireland           43                Ireland           63

  France            7                 Kenya             41

  Netherlands       3                 Spain             32

  Iran              1                 Iran              1

                                      France            1

                                                         

                                                         

                                                         

                                                         

                                                         

  Total for Others  54                                  138

  Others not Listed 0                                   0

  Grand Total       54                                  138
  ----------------- ----------------- ----------------- -----------------

# Policy

All product marketed in the UK is subject to compliance with EU quality
standards, pesticide and plant health legislation. Full details of the
marketing standards for asparagus are available from the UK's Department
of Environment, Food and Rural Affairs website:
[http://www.defra.gov.uk/hort/hmi/common/pdf_msanx/x_asparagus.pdf]{.underline}

U.S. asparagus normally faces an import duty of 10.2 percent. However,
asparagus is one of the many food and agricultural products currently
faced with additional import duties as a result of the Foreign Sales
Corporations (FSC) dispute between the U.S. and the European Union.
Following a WTO ruling on the FSC dispute, the EU was entitled to
introduce trade sanctions up to the value of US\$ 4 billion. Retaliatory
measures against the U.S. were introduced on March 1, 2004. These
measures started with an additional import duty of 5 percent on March 1,
followed by automatic monthly increases of 1 percent up to a ceiling of
17 percent (to be reached on 1 March 2005) if the current FSC
legislation has not been repealed. 

As yet, the FSC legislation has not been repealed. At the time of
writing, U.S. asparagus faces an additional tariff of 8 percent, on top
of the existing 10.2 percent. The current thoughts of traders are that
the current duty increases are not translating into higher prices at
markets, largely given the favorable exchange rates today compared to a
year or more ago. However, the prospect of increasing additional duty in
the months ahead is a concern and could impact on the volumes of U.S.
asparagus entering the UK market.

# Marketing

Although asparagus is now available all year round, the UK trade does
conduct marketing activities to promote the availability of British
asparagus in supermarket outlets. The UK Asparagus Growers' Association
(AGA) has long been involved in marking the British asparagus season
with a range of PR activity to help generate awareness of availability
and product attributes among the fresh produce trade. Six companies that
grow, market and distribute British asparagus promoted the latest
marketing campaign, which includes endorsements from top celebrity chefs
and an emphasis on the health benefits of asparagus.