Sourcing organic products from Ukraine, Moldova, and Armenia

Biofach Nuremberg 2015

Claudia Assmann, UNEP // Toralf Richter, FiBL

Results of a market study for organic products fromfor organic products from

Ukraine, Moldavia, Armenia

Joern Berger

Product focus Armenia, Moldova, UkraineProduct Armenia: Moldova: Ukraine:

Cereals, oilseeds and dried pulses

ancient traditional triticum / wheat, spelt

and other cereal varieties

Sunflower (oil and grains)Soft wheatRapeseedSoybeanCornFeed peas (rye, triticale, pumpkin seed)

Sunflower (oil and grains)Soft wheatRapeseedSoybeanCorn

Fruits, berries and nuts

Processed fruits & berriesApricots, peachesPomegranate(juices, purees, canned, IQF, dried, fruit kernel/shell for cosmetics)

Processed fruits (plums, apples, cherries, preserved, jams, juices, wine, fruit brandy)Walnuts

Pre-processed berries, wild collection and farmed

Walnuts

Joern Berger

for cosmetics)

Herbs and honey

Farmed herbs (condiments: black basil, tarragon) & wild collectionThyme, mint, St John’s wort, rosehip, sea buckthorn

HoneyMulti-flower mountain

Farmed herbs & wild collectiondried rosehip(Honey needs further conversion)

Farmed herbs & wild collection(Honey – there is not enough production for the domestic market yet)

Opportunities:

�Climatic conditions, fertile soils, efficient agriculture sector

� Competitive organic production

�Good potential on EU export market � Cereals, oilseeds, dried pulses,

fruits, berries, nuts, herbs and honey

Challenges:

�Repeated frauds in organic grain commodity business damaged country images

� causing particular alarm among EU importers

� willingness for traceability required= essential for reliable supply chains

Organic grain commodities from Ukraine and Moldova

Joern Berger

�2014 “Free Trade Agreements” (DCFTAs) signed with the EU

� lowering tariffs and EU import duties� market opportunities in the EU � higher production standards � modernization of agriculture � favourable to organic sector

development

�Solid experience in organic production Ukraine � rank 6th in global acreage of organic oilseeds Ukraine � rank 8th in global acreage of organic wheat

�Successful conventional oilseed exports Ukraine:

1. Rapeseed €615 Mio 85% to EU2. Soy €546 Mio 67% to EU3. Sunflower €129 Mio 20% to EUMoldova:1. Sunflower €56 Mio 47% to EU2. Rapeseed € 16 Mio 79% to EU

Ukraine and Moldova – grain commodities

Ukraine:

Ukraine:

Joern Berger

1. Sunflower €56 Mio 47% to EU2. Rapeseed € 16 Mio 79% to EU3. Soy €15 Mio 73% to EU

�Successful conventional cereal exports Ukraine:

1. Corn €3 billion 40% to EU2. Wheat €1.8 billion 17% to EUMoldova:1. Wheat €4.1 Mio 33% to EU2. Corn €10.7 Mio 57% to EU

Ukraine:

Organic grain commodities from Ukraine and Moldova

Opportunities:

�Highest potential for economic and environmental benefits

�Potential shift of large organic EU soybean imports to Eastern European countries like Ukraine/Moldova

� reliable supply and competitive prices required

Joern Berger

� reliable supply and competitive prices required

� meet GMO free criteria

� organic high protein crops for animal feed

Opportunities

�Socio-economic impact and rural development ���� processed fruits (e.g. juices, dried fruits),����shelled walnuts, herbs and honey

�Semi-processed ingredients & private label� More opportunities compared to

finished & own label

Ukraine and Moldova – processed fruits and berriesUkraine:

Moldova:

Joern Berger

�Well established juice industry Ukraine €177 Mio 64% to EUMoldova €39 Mio 91% to EU� Space for organic product range

�Successful Ukrainian IQF fruit/berry exports33 Mio 89% to EU

�already incl. organic product range

�Successful conventional walnut exports to EU Moldova €72 Mio, 87% to EU Ukraine €51 Mio, 53% to EU

�Predominant exports to EU:

Ukraine and Moldova – nuts, herbs and honeyMoldova:

Ukraine:

Joern Berger

�Predominant exports to EU: MAPs Ukraine €5.1 Mio, 52% to EU Moldova €0.3 Mio, 38 % to EUHoney Ukraine €40 Mio, 80% to EUMoldova €1.8 Mio, 86% to EU� opportunities for organic honey:

Germany, France and UK

Ukraine:

Opportunities:

�Good potential on EU export market �Dried fruits, Herbs, Honey

Traditional varieties of cereals

�Organic farming

Challenges:

�Periodic droughts

�Negative trade balance for most agricultural products

�Domestic food availability unsolved

� Export of scarce basic food crops is neither recommended nor feasible

Armenia

Joern Berger

�Organic farming � development of sustainable food sector � provide highly nutritious food � low external inputs

�Armenia has signed the Russia-led Customs Union

�Trade negotiations from Armenia are oriented towards the Russian Federation

� Access to EU market potentially limited

Opportunities

�Expansion of production & organic farming for rural development:

����Herbs and fruits (wild collected and farmed)

Armenia – herbs and honey

Joern Berger

���� Honey

Opportunities

���� Fruit preparations €3.4 Mio 3% to EU����Juices (apple, tomato, orange, pineapple, grapefruit juices)

€1 Mio 5% to EU����Dried fruit (prunes, apricots) €0.1 Mio 13 % to EU

Armenia – processed fruits

Joern Berger

Regional perspective for the organic sector in Eastern Europe

�The organic sector in Eastern Europe needs market-oriented support structures:

�Agricultural cooperative/association structures to efficiently organize organic producers and exporters

�A strong and professional market organization for the organic sector (for logistics, drying, storing, sorting, pre- and final processing)

Joern Berger

�Private organic certification schemes offer good opportunities (e.g. Naturland, BioSuisse, Soil Association) for stable and long-term trade relations directly with EU organic processors

�Governments in the region should focus on availability of organic trade statistics

Meet organic exporters at

BioFach

Ukrainian Pavilion

5-151

Moldovan and Armenian Pavilion

4-174

Joern Berger

4-174

Panel Discussion

Participants:

Joern Berger (Organic Services), Martin Timmermann (trading platform o-tx, Germany), SergiyGalashevskyy (Organic Standard Ukraine); 1 Producer Ukraine, Moldavia, Armenia

Moderation:

Toralf Richter, FiBL; Claudia Assmann, UNEP

Speed dating exporters - importers