# Presentation: 931978

## World Trade in Fresh Vegetables

**Shari Kosco, Ag. Economist **
**USDA/Foreign Agricultural Service**
**Horticultural & Tropical Products Div.**
**July 2004**

**Notes:**

[An aside:  
- The United States has had a net trade surplus in food for the last 40 years
- The United States had a food trade deficit in the 50s
 Since we are importing more and more of the food we eat, we may have
  another food trade deficit in about 7-10 years, according to analysts
 The United States has a trade deficit in vegetables under HS#07 from 
  1995-2002 and 1989-1990 
- The United States had a vegetable trade surplus from 1991-1994
- In  CY2003, vegetable imports were $3.1 billion and exports were $1.8
   billion]

## World Exports of Fresh Vegetables 11-Percent Increase in 2002

**Source: Global Trade Atlas**

**Notes:**
Before I begin, how many people are currently involved in international trade?  Even if you are not, it is important to learn about international trade because the world is becoming an increasingly global marketplace and trade does affect you (i.e., trade agreements, tariffs, tariff and non-tariff barriers, etc).  Also, you may not be aware that you are indirectly exporting if your buyer is the one who is handling the exporting.

In 2002, world exports of fresh vegetables reached $21.3 billion, up 4 percent from 2001 and up 10 percent from 1999, according to World Trade Atlas statistics.  Before I go any further, I need to explain the definition of fresh vegetables that I am using.  I am using the definition as defined under the Harmonized System Chapter #07, which includes fresh, fresh dried, and fresh frozen.  The Harmonized System (HS) is a method of classifying products that are traded.  In brief, the HS assign codes of up to 10 digits to each item.  Codes are internationally harmonized at the 6 digit level.  The more complicated the definition, the longer the code.   

In any case, it is useful to analyze trade data for competitor and market trends.

## Top Ten World Exporters of Fresh Vegetables 

**Source: Global Trade Atlas**

**Notes:**
Now let’s take a look at our competitors.  The world’s top exporters of fresh vegetables include: the Netherlands ($3.7 billion), Spain ($2.7 billion), Mexico ($2.3 billion), the United States ($1.93 billion), and China (almost $1.88 billion).  

Notice that China’s trend line is the only one that is increasing each year from 1999-2002, while the others are flat or decreasing.  China has had impressive growth and almost reached U.S. levels, and it is expected to continue growing.  

## The Netherlands Exports of Fresh Vegetables to Key MarketsWorld’s Leading Fresh Vegetable Exporter

**Source: Global Trade Atlas**

**Notes:**
For the next couple of slides, we will take a closer look at the Netherlands’ trends since they are the world’s leading  vegetable exporter.  Please note that they are not the world’s largest vegetable producer (they are the 28th largest), according to FAO statistics.  

Having said that, the data shows that in 2002, the Netherlands’ vegetable exports had good solid growth from 2000-2002.  Exports reached $3.7 billion in 2002, 8 percent above the 2001 figure and 11 percent higher than in 2000.  

I want to point out that although the world is a global marketplace, we trade most often with our neighbors.  This is for many reasons, such as close proximity, similar tastes and preferences, and trade agreements that give preferential tariff treatment to partners.

As shown in this slide, Germany is the Netherlands’ top market, followed by the United Kingdom, Belgium, and France (all EU members).  However, note that exports to Germany are flat over this 3-year period.  In contrast, exports to the United Kingdom, Belgium, and France have been rising and taking up some of this slack.  

## The Netherlands Exports of Major Fresh Vegetables to Germany

**Source: Global Trade Atlas**

**Notes:**
In the last slide, we learned that Germany is the Netherlands’ largest export market.  Now let’s look at what vegetables they are exporting to Germany.  Tomatoes, peppers, and cucumbers are the top vegetables, followed by onions, potatoes, and lettuce.  Vegetable exports to Germany have been flat over the last three years.  

## Mexican Exports of Fresh Vegetables  United States Absorbs Over 95 Percent

**Source: Global Trade Atlas**

**Notes:**
We are skipping the second largest exporter, Spain, because Spain’s trends are similar to the Netherlands.  

Let’s analyze the third leading vegetable exporter, Mexico.  From 2001-2002, exports dropped 3 percent.  However, from 1999-2002, exports rose five percent.  Mexico relies heavily on the United States as a market, which accounts for about 95 percent of Mexico’s export sales.  

## Mexican Fresh Vegetable Exports to the United States

**Source: U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
In this slide, we can analyze which vegetables Mexico sells to the United States. The United States buys a lot of tomatoes and peppers from Mexico. Tomatoes and peppers account for almost half of the vegetables.  Cucumbers, onions, and asparagus are the next largest categories.  

U.S. vegetable imports from Mexico rose each year from 1999-2002, reaching a record high of $1.8 billion in 2002, 6 percent above the 1999 figure.

## U.S. Exports of Fresh VegetablesCanada Accounts for 60 Percent

**Source: U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
In this slide, we can analyze which vegetables Mexico sells to the United States. The United States buys a lot of tomatoes and peppers from Mexico. Tomatoes and peppers account for almost half of the vegetables.  Cucumbers, onions, and asparagus are the next largest categories.  

U.S. vegetable imports from Mexico rose each year from 1999-2002, reaching a record high of $1.8 billion in 2002, 6 percent above the 1999 figure.

## Shares of U.S. Exports of Fresh Vegetables by Value in 2003

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
None of these categories was dominant.  Each accounted for less than 10 percent.  This means we are fairly diverse and do not rely on any single crop to export.  

## U.S. Exports of Fresh Tomatoes to Top Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Let’s look at tomatoes, our largest vegetable export.  While tomatoes exports rose 14 percent from 1999-2002, exports have been slipping over the last three years, with a 17 percent drop from 2000-2002.  The majority is exported to Canada ($112 million).  Mexico, our other NAFTA partner, was our second most important export market at $12 million.  In contrast, the United States imported $551 million of tomatoes from Mexico. 

Overall, the United States has a large trade deficit in tomatoes.  

## U.S. Exports of Fresh Potatoesto Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Fresh potatoes are the fourth largest U.S. vegetable export.  Exports reached a record $123 million in 2002, 40 percent above 2001.  Reasons for the surge include expanded current (i.e., Canada) and new (i.e., Singapore, Hong Kong, and Malaysia) markets.  Canada and Hong Kong were responsible for most of this gain, with exports up 60 percent and 20 percent, respectively, in 2002.  However, exports to many other key markets were down significantly, including Mexico and Taiwan.  Despite this, the United States has a small trade surplus in potatoes with all trade partners.

Mexico has traditionally been a small but important market for U.S. potatoes.  In 2003, exports to Mexico are expected to greatly exceed previous years, due mainly to the recently negotiated U.S.-Mexico potato protocol (for more details, see Attaché Report #MX3105).  The results can already be seen in the 2003 export data.  From January to October 2003, potato exports to Mexico were $6.3 million, 400 percent higher than the same period in 2002.  This helps make up for the poor export sales to Canada thus far in 2003.  Over this same period, exports to Canada were valued at $66.3 million, 40 percent less than the same period in 2002.   

## U.S. Exports of Fresh Onions, Garlic, & Shallots to Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Onions/garlic/shallots are the sixth largest U.S. vegetable export.  Onions account for most of this category.  From 1999-2002, onion exports declined 6 percent. Canada is the top market for U.S. onion exports, followed by Japan and Mexico.  Overall, demand for U.S. onions in Canada and Mexico has been increasing over this 4 year period, while exports to Japan have been dropping, due mainly to Japan’s economic crisis, the strong dollar relative to the Yen, and low cost competition from China. 

In 2002, U.S. onion exports fell 11 percent to $92.7 million.  This decline is mainly due to Canada, Japan, and Taiwan, which were down 6 percent, 40 percent, and 30 percent, respectively.  However, onion exports to these key markets are expected to recover in 2003.  From January to October 2003, exports were up 24 percent to Canada, up 42 percent to Japan, and up 61 percent to Taiwan over the same period in 2002.  Furthermore, from January to October 2003, exports to these three countries are already higher than or at the same level as the entire year in 2002. 
The United States has a small trade deficit in this category.

In 2003, the U.S. garlic industry was rejected for trade assistance under the FAS’s Trade Adjustment Assistance (TAA) because domestic producer prices did not decline by more than 20 percent of the previous 5 year average, a condition required for certifying a petition for TAA. 

## U.S. Exports of Fresh Carrots & Turnips to Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Carrots and turnips are the 8th largest category.  In 2002, exports increased 6 percent to $85 million.  From 1999-2002, exports soared 30 percent.  Again, the United States relies heavily on Canada, which accounts for 90 percent.  Trade analysts have taken note of increasing U.S. carrot exports to the United Arab Emirates.

The United States has a trade surplus in carrots.  

## U.S. Exports of Frozen Sweet Corn to Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Frozen sweet corn is the 14th most important U.S. vegetable export at $44 million.  From 2001-2002, exports increased 10 percent, while they dropped 5 percent from 1999-2002.  

Japan is the top market but is declining.  Canada is the second largest and rising.  Surprisingly, exports of frozen sweet corn to China are increasing, which helps make up for the overall decline over the past four years.  China is both an important market and competitor.

The United States has a very large trade surplus of frozen sweet corn.  

## U.S. Exports of Fresh Asparagus to Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Asparagus is the 16th largest vegetable export for the United States, with exports reaching $38 million in 2002.  Asparagus exports have been dropping steadily over the last several years, due to strong competition from Peru and Mexico.  From 2001-2002, they dropped 5 percent.  From 1999-2002, they fell 24 percent.  Unlike the other vegetables discussed earlier, Canada is not the primary buyer of U.S. asparagus.  Roughly 40 percent was exported to Canada and Japan in 2001 and 2002, with larger percentages to Japan in previous years. 

The United States has an asparagus trade deficit.  

[Aside: In summer 2003, the U.S. asparagus industry decided not to apply for import relief under The Trade Adjustment Assistance (TAA), the program that provides relief to industries that have been injured due to imports, because producer prices did not decline by more than 20 percent of the previous 5 year average, a condition required for certifying a petition for TAA.]

## U.S. Exports of Fresh Beansto the Key Markets

**Source: ****U.S. Dept. of Commerce, Bureau of the Census**

**Notes:**
Beans are not in the top 15, but still important at $25 million in 2002.  They  rose almost 10 percent from 2001-2002, and rose 4 percent from 1999-2002.  Canada buys almost all of it, while a tiny portion is sold to Japan and Mexico.

Overall, the United States has a trade deficit in this product.  

## Top Ten Fresh Vegetable Importers

**Source: Global Trade Atlas**

**Notes:**
Now let’s take a closer look at import markets.  The United States is the fourth largest vegetable exporter and the world’s largest importer.  While the Netherlands, Spain, and Mexico are also key exporters, these countries do not import nearly as much as the United States, as demonstrated in the graph. 

Five of the eight top markets are EU members.  Although the EU is a difficult market to penetrate, it is an important market.  Japan’s import market share is dropping rapidly, due to its economic crisis and declining currency against the U.S. dollar. Despite this, Japan is still a very important market.  Canada is a strong market and should not be ignored, but it is prudent to develop new market opportunities as well. 

## World Import Shares of Fresh Vegetables in 1999 and 2002

**Source: Global Trade Atlas**

**1999**

**2002**

**Notes:**
World import shares of vegetables have changed only slightly from 1999-2002.  In 1999, Germany had the largest share and the United States was second.  However, in 2002, Germany lost market share and switched places with the United States.   Germany’s and Japan’s import shares decreased 2 percent over this period, while the United States and India’s shares increased 2 percent.  It is noteworthy that all the shares are spread out among all the players.   There is not one dominant player and lots of market opportunities.  

## Japan’s Fresh Vegetable Imports from Top Five Suppliers

**Source: Global Trade Atlas**

**$2 billion**

**$1.9 billion**

**$1.7 billion**

**Notes:**
Now we will take a closer look at Japan, the fourth largest vegetable importer at $1.7 billion in 2002.  Japan is one of our key markets, so it is very helpful if we analyze Japan’s imports from all suppliers from 2000-2002.  Imports have declined 15 percent over this 3 year period.  

China supplies over 50 percent of Japan’s vegetable imports, while the United States supplies about 15 percent.  China is both an important U.S. market and growing competitor. 

## Japan’s Fresh Vegetable Imports from the United States by Category

**Source: Global Trade Atlas**

**Notes:**
Let’s analyze Japan’s imports from the United States by product.  

Cauliflower/cabbages accounts for almost 40 percent of Japan’s imports from the United States.  This category has not grown over the past 3 years, but has increased proportionately as Japan’s total vegetable exports decline.  Japanese imports of frozen sweet corn, onions, beans, asparagus, and tomatoes have dropped rapidly over the last 3 years. 

## Slide 21

**Notes:**
You may have not heard of FAS or contacted us, but there is a good chance that your trade association has.  Check out our webpage for more information regarding our export programs, services, FAS contacts, cooperator groups, overseas attaché  reports for selected countries and commodities, etc.

## Slide 22

**Notes:**
Check out our webpage for more information regarding the HTP division, tariff tables, circular reports and articles, individual commodity pages, etc.

## For further information on vegetables:

**Shari Kosco, Ag. Economist **
**USDA/Foreign Agricultural Service**
**Horticultural & Tropical Products Division**
**202-720-2083**
**Shari.Kosco@fas.usda.gov**
**www.fas.usda.gov/htp**