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April 18 2014, 11:31 Fruit-Inform

What Ukrainian AJC market should expect from free trade with EU?

Fruit-Inform analysts believe that AJC (apple juice concentrate) manufacturers will primarily use an opportunity of the quota under the free trade agreement with the EU among Ukrainian fruit and vegetable enterprises. It is Ukrainian AJC suppliers that have the highest experience in business with European buyers.

In the period from April 23 to November 1, 2014, Ukrainian processors will be able to export up to 10,000 tons of AJC under zero duty with the quota able to be raised to 20,000 tons in the nearest 5 years.

Processors were rather enthusiastic about the news as they face an opportunity to expand their sales market by at least 15% by higher price competitive ability.

“The EU's decision to set an AJC quota was a pleasant surprise for us. We see only positive moments in it as now our competitive ability in the European market will significantly grow meaning new prospects in increasing exports”, Mrs. Olga Shvets, Sales Manager at Yablunevyi Dar, comments.

However, some sector experts believe that EU's tariff preferences will have a slight impact on Ukrainian AJC exports.

“The European market always had annually increasing severe competition”, Mrs. Tatyana Seroshtan, Sales Manager at Dinter, says. “Ukrainian processors always competed with Polish factories in price, therefore a task to conquer the European market is difficult even with available quota. Nevertheless, a zero duty can significantly simplify our regular sales to Europe”.

The market experts also believe that the quota can be expanded already this year.

“I'm almost sure that the quota of 10,000 tons is not final”, says Mrs. Shvets. “When we reach the ceiling, the EU can set a new quota for the same volume, if necessary. It is entirely possible”.

Fruit-Inform analysts believe that free trade with the EU will help Ukrainian entrepreneurs both simplify the access to the European market and protect from risks connected with probable closure of the Russian market. Ukraine's AJC exports to the European countries have only been growing in the past few years. For example, the EU imported 67,000 tons of Ukrainian AJC in the previous season, two times of exports to Russia and two times of exports to the EU five years before. In general, Ukrainian processors ship about 60% of their annual AJC volumes to the EU.

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