At the national beekeepers’ convention held in January in Texas, agents from Homeland Security’s I.C.E. Division reported on the numerous arrests, confessions and/or sentencing of individuals in Seattle, Los Angeles, Chicago and China who colluded to transship Chinese honey through third countries. Those countries include: Indonesia, Malaysia, India, Russia, Thailand, Myanmar, Taiwan and South Korea. The Toronto Globe and Mail published an article on Jan. 5, 2011, that correctly described these convoluted and complex schemes of honey laundering as constituting the “largest food fraud in U.S. history.”
As Richard Adee of the America Honey Producers Association added, “To stop this laundering of honey, we must apply the principle that the owners of the chop shops must be brought under the arm of the law.” The American honey industry anticipates that this is what will happen since the government, including Congress, is determined to put an end to honey laundering.
The aberrational data between honey production and exports in 2000 and in 2010 led to on-site investigations of alleged honey industries in Indonesia and Malaysia. Those investigations identified fraudulent activity for honey and other Chinese products subject to antidumping orders. Emails and articles from China flagrantly offer to ship Chinese honey to the U.S. via Malaysia and reference Chinese honey exporters who are being compelled to sell their honey to the U.S.A. via India, Thailand and Malaysia. With compelling evidence in hand, our government officials began discussions with foreign countries to put an end to these illegal practices which both violate international law and jeopardize national security by jeopardizing the security of the food supply. Current estimates are that annual food production valued at approximately 20 billion U.S. dollars depends upon pollination of crops by a healthy beekeeping industry. Those crops include foods with important health benefits, such as almonds, blueberries, cranberries, apples, citrus fruits, etc.
Recent import statistics indicate that Homeland Security is achieving tangible success in ending transshipments through Indonesia. Indonesian honey imports reached 17,000,000 lbs. in September and were zero in October and November, 2010. Imports from some other Asian exporting countries are projected for 2010 as follows:
Malaysia 35,000,000 lbs.
India 38,000,000 lbs.
However, October and November import statistics reveal that the pace of imports from those countries may be slowing somewhat.
This indicates there are real teeth to the efforts of I.C.E.!
Furthermore, during the January State visit of China’s President Hu Jin Tao, the issue of illegal honey laundering was communicated to the U.S. Senate and the U.S.-China Business Council in Washington, D.C. By raising this issue, there is the possibility that the Chinese government can become an active agent in preventing circumvention at its source within China.
The 2010 ban on Indian honey exports to Europe was discussed at the Apimondia meeting in Vietnam. The German laboratories in attendance indicated the ban will be in effect for at least two years. The ban was instituted because of several factors including: 1) inadequacy of a traceability regime in India for honey, 2) contamination with antibiotics and 3) contamination with heavy metals, including lead (the so-called China honey “tea test”). Within India there were widespread reports of a flood of cheap Chinese honey so severe that Indian authorities considered initiating their own antidumping petition in India against Chinese honey. While India and China are increasing their bilateral trade relations, such legitimate trade should not involve either the laundering of honey or the blending of contaminated honey. The Japanese report that sophisticated honey factories in China are using advanced technology to ultra-filter honey removing pollens, contaminants, enzymes and/or adding other sweeteners to alter the chemical profile of honey.
True Source Honey in the U.S.A. has been established as part of the process to create a level playing field for honey buyers. The World Honey Congress is establishing an Ethical Trading group within Apimondia to work to eliminate unfair international trading practices which, if unchecked, will lead to “a March to Monopoly” by unethical companies. Leading members of the industry in Argentina and other countries will play an important role in Apimondia’s sub-group to establish principles and policies to assure ethical trading in honey, a higher standard of business ethics and a firmer adherence to the rule of law in international trade.
Argentina
With below average crops in the U.S. and Canada, hope was placed upon Argentina, especially for white honey. And early spring weather was favorable. But December witnessed drought and high temperatures day and night. Power and water shortages occurred throughout December, which is equivalent to June in the Northern Hemisphere. Crop estimates fell to 50,000MT and extraction slowed as beekeepers waited for honey to build up on the hives. During the first two weeks of January, rains returned and the prospect of extending the 2nd and 3rd extractions raised hopes for a crop up to 60,000MT. But there is no prospect of a bumper crop in the magnitude of 110,000MT or 242,000,000 lbs., as was achieved in previous years.
The number of hives has been reduced by at least 1/3 from peak levels. And much of the prairie lands that were used for clover and alfalfa production to support the Argentine’s previously large cattle and dairy industries have been converted to soybean and grain production. Argentina has made a strategic decision to devote large tracts of its land to provide soybeans and other grains to the 3 billion people in China and India, both of which have low acreage per capita of arable land.
Even if Argentina abandoned this strategy, which is very unlikely, it would take a decade to convert the land with extensive irrigation systems from soybean back to pasture lands. This means that the ratio of white honey to extra light and light amber honey will become smaller.
The high temperatures and marginal rainfall of December means that for the 2010/2011 Argentine crop, sunflower will be a major nectar source and the international demand for white honey will substantially increase.
Major honey buyers anticipate a crisis of supply that will become evident by early March. That crisis will be especially acute for white honey whose prices are steeply rising. Those packers who were most dependent upon honey imported through Indonesia and Malaysia will be the first to feel and have to respond to the curtailment that was announced by I.C.E. agents during their presentation to the beekeepers and the packers and dealers.
Currency rates will undoubtedly play a significant role in the prices for white honey. The U.S. and Canadian dollars have attained parity in 2011. In contrast, a few years back the U.S. Dollar was much stronger, enabling U.S. buyers to pay high Canadian Dollar prices to Canadian beekeepers and spend up to 25% less in U.S. dollars. Due to the threat of financial crisis in Ireland, Greece, Spain, Portugal and Italy, the Euro is much weaker than it was relative to the U.S. Dollar. When the Euro enjoyed its advantage, the Europeans could afford to pay high U.S. dollar prices for South American honey from Argentina, Uruguay and Chile. For the moment, European buyers cannot play the role of pushing U.S. Dollar prices high. But that could change as our country has a $14 trillion national debt and a huge annual deficit. That debt and deficit makes it highly questionable how long the relative strength of the U.S. Dollar versus the Euro can be sustained.
Brazil and Mexico
Brazil remains the chief source of organic honey. This is a very lucrative market which more and more packers are pursuing. Conditions in early 2011 look good in Brazil, including for organic white honey. Prices are, however, soaring, with white Brazilian organic honey approaching $2.00/lb.
Mexico’s early crop was shut down due to cold weather and high moisture. The prices for conventional Mexican honey as the year began were even higher than for Brazilian organic white honey. The abrupt curtailment of “Indonesian white” honey imports generated desperation to secure Mexican and Brazilian early crop.
Vietnam
The Vietnamese honey crop started late. They are very cognizant of the need to be careful with the early honey crop as the bees emerge from wintering. The high prices of sugar made wintering bees more expensive than in previous years. As the 2011 crop begins, the bee hives are strong, but the weather is a major variable.
Nineteen honey exporters met on Jan. 11, 2011 to strengthen their traceability regime and their quality control system. The conference included participation by the Vietnamese Chamber of Commerce, Customs and I.C.E. and the Vietnamese Veterinary Department. The goals of the meeting were: 1) prevention of transshipment of honey to the U.S. market and 2) establishing the traceability of honey in Vietnam.
In 2010, the Vietnamese exported 22,500MT of honey. Ninety percent of these exports went to the U.S. market. Beekeepers in Vietnam, to their credit, have been working with I.C.E. agents, who have visited many producing areas from south to north and secured samples from a wide range of floral sources.
Prices as the market opens are at historic highs for light amber honey. Inquiries for Vietnamese honey are exploding as Indonesia and Malaysia dried up as sources of circumvented honey. As demand for Vietnamese honey increases, prices are likely to continue to rise even above their historic highs with which new crop honey sales began in 2011.
Weather
As meteorologists note, the past decade was relatively free of major droughts. It is anticipated, however, by meteorologists who follow the impact of global climate changes on global agriculture, that the next decade will not be so tranquil.
While in some circles global warming remains a controversial scientific hypothesis, we ignore at our peril the climatic volatility which is predicted by this theory.
Data from NASA and the National Oceanic and Atmospheric Administration points to 2010 as the hottest year on record, tying 2005. Indeed, 9 of the 10 hottest years recorded since global weather records were kept beginning in 1880 occurred in the first decade of the 21st Century. Record snow falls were recorded in North America, Europe and Siberia. Devastating floods of Biblical proportions occurred in Pakistan and Australia and extreme rains hit California, among other areas. Some scientists correlate these record snow falls and floods with the rapid melting of the polar ice caps and the permafrost below which contain vast amounts of another heat trapping gas. As noted by experts such as Dr. Hansen, NASA’s chief global climate advisor, the melting of the icebergs not only raises ocean levels and ocean temperatures, but puts into the atmosphere an unusually high concentration of water.
Increased volatility of weather patterns implies increased volatility in patterns of agricultural production of grains, spices and honey. This, in turn, will require a more nimble honey international industry, which balances domestic and imported honey to satisfy the consumption needs of the world’s major honey-consuming nations.
By Ron Phipps
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