1. The EU ban on honey from India has been officially removed. That ban was for heavy metals, antibiotics and lack of traceability. However, the GMO issue still hangs over the European honey market. It is important to note that both India and China produce honey from many GMO plants that are not approved in Europe. Therefore, they could jump from the frying pan into the fire if the GMO decision proves to have teeth.
2. However, the GMO law enforcement has encountered very substantial problems. As you know, the pollen content in the honey is a small part of the honey. The pollen is often extracted from a large number of plants among the multiple pollens found in honey. GMO pollens will constitute a teeny part of the pollen content in honey from a country like Argentina. There are no scientific tests with legal force that allow the quantification of the minuscule amounts of pollen. The bottom line is that they cannot, in a scientific way, enforce the law. It is furthermore estimated that it will take several years before a test will provide the quantification that the law requires. There is no demonstrative health risk and spending the money for a test becomes a dubious enterprise.
3. Some people are predicting there will be a flood of honey to the U.S. That is, they are predicting that all the honey boats will be turned around and dumped at depressed prices in the U.S. market. The talk of the closing of the EU market is more a case of market manipulation than it is insight into the real dynamics and options that exist within the international honey market. The reason is the big packers in Europe have decided that if they have this, they will change the labels to indicate that the honey may contain GMO pollen, rather than essentially close the businesses or reduce business by 50% of their volumes.
European food manufacturers and retailers are realizing that the GMO issue that developed with honey is opening a “Pandora’s Box.” Why? 80% of the food consumed in Europe comes from GMO plants. That includes plants used to feed cattle, pigs, chickens etc. The only other alternative would be a voluntary starvation of the population which would not happen.
4. Argentina is in a good position because there are only 3 plants that are used in Argentina with a GMO basis. Countries like China, Brazil, U.S.A. and Mexico have a much more extensive use of GMO plants.
5. At this point, it looks like 15,000MT of honey from the recent crop remains to be shipped from Argentina. The vast majority of that honey is ELA, Amber and LA honey. Because the Argentine spring was extended due to ideal weather, 75,000MT of the crop was predominately of darker honey like ELA and LA. This is similar to the U.S.A. Beekeepers in the Dakotas report that since they have completed the extraction, they found far less water white honey and more ELA than is typical.
In any case, relative to Argentina, after the conversion of pasturelands to soybean production, they now expect a normal crop to be 65,000MT; 50,000MT a poor crop; 75-80,000MT a bumper crop. There is no new investment in Argentina. Therefore, they do not anticipate any surge of production other than the ideal weather may take.
6. Leaders of the Hungarian Beekeepers’ Association have contacted me and they will publish my speech presented at Apimondia. They advised that the Acacia crop in 2011 was a disaster. The preceding year they exported 14,000MT; this year only 3,000MT at super high prices.
7. The price for domestic white honey has been moving from $1.65/lb.-$1.70/lb. to $1.72/lb.-$1.75/lb. In general, as soon as the honey is extracted, it is sold. There are even more modest estimates of the U.S. crop given the failures in Florida and Texas.
A similar conversion of pasturelands to soybean production has also reduced the American honey crop.
The NASS survey reports for U.S. bees and honey production are going to cease due to the U.S. budget constrictions, according to a report from the USDA issued October 17, 2011. How that will affect our understanding of the U.S. bee colony situation and honey production remains to be seen.
There are reports that some big packers are faced with extreme dilemmas. They entered contracts for the last year with major retailers but they cannot find the honey to fulfill the contracts. This means that if there is any softness because of the GMO, it may last for a few months and be replaced with a substantial surge in prices as it becomes increasingly difficult to find the quantities of white honey.
8. There are several Vietnamese exporters who are on automatic detention. There is a report of large quantities of Vietnamese honey rejected in Houston. There is concern that new antibiotics or fungicides have been found and new non-tariff trade barriers may impede Vietnam’s ability to ship. There are reports that force majeur conditions may emerge as government actions may both preclude imports of Vietnamese honey and Indian honey from some exporters. Non-tariff trade barriers, as well as global weather patterns, may impede the flow of honey.
Vietnamese honey producers are examining the cause of fungicide residues and seeking cures, perhaps by moving beehives out of coffee and rubber plantations before the fungicide is applied, and monitoring the honey strictly and carefully.
9. The European market is in a state of low inventories. Resolution of the GMO problem as non-enforceable or by changing the labels is expected to spur aggressive buying of Argentine honey. The general phenomena in the first two-thirds of 2012 is likely to be a substantial period of shortness of white honey, rising prices and a scramble to obtain supply at the most reasonable prices that a firm market will allow.
10. We must also expect that the efforts to prevent laundering of Chinese white honey from other countries will continue and may indeed intensify. Depending on whether new non-tariff trade barriers emerge on Vietnamese honey, there is a strong prospect that the markets for both darker and white honey will experience shortages and increasingly higher price levels.
This brief report indicates that the market may be entering an important transition period because of the factors cited above. The above represents an attempt to describe the likely dynamics that will unfold in the international honey market. In sum, depending upon what happens with non-tariff trade barriers against Vietnam and India, in 2012 we could see rising prices for both white and industrial grades of honey.
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