The honey market is particularly important for the Ukrainian economy, as this country is the largest honey producer in Europe and the fifth-largest exporter globally. Since 2010, honey exports have increased seven-fold, which has led to an increase in export revenues and incomes of the population involved in the production and processing of honey. The European Union is the largest market for Ukrainian honey, accounting for about 75% of its exports.
What are the trends in the honey market in recent years, what are the challenges facing Ukrainian exporters, and how does China influence the price of Ukrainian honey in foreign markets?
Ekaterina Krivonos, an Economist at the Investment Center of Food and Agriculture Organization of the United Nations (FAO), gave UkraineFood.org her expert comment on that.
Exporters note the oversaturation of the market due to the significant increase in honey production
According to Ekaterina Krivonos, FAO estimates that in 2017, global production reached 1.86 million tonnes, with an average annual increase of 2.8% from 2010 to 2017, which is higher than in the period from 2000 to 2010 (2%). China produces about 30% of the world’s honey, and this share is much higher than it used to be back in 2000 (20%).
Despite the fact that China consumes most of the honey it produces (78% of production in 2017), it remains the largest honey exporter in the world market with a share of 19%, delivering about 120-130 thousand tonnes annually. Turkey, Argentina, Iran, the United States, and Ukraine produce far less than China – from 4 to 6% of the global output. However, many of these countries, including Ukraine, are also large exporters.
Overall, global honey imports totaled 684,000 tonnes in 2018, down 7% from a year earlier when imports reached a record high of 735,000. The value of imports totaled $ 2.2 billion in 2018, up 75% from a decade ago. The largest importers are the European Union (30% of the market) and the US (29%), with imports having increased significantly over the last ten years, especially in the US, where imports have doubled due to increased demand and insufficient domestic production.
In 2019, exporters note the oversaturation of the market because of the significant increase in honey production; as a result, there is pressure from importers towards lower prices. Thus, although for the first six months of 2019 the US imported 9% more honey in volume terms than in the same period last year, the total import value reduced by 7%, indicating a decrease in import prices. This is due to the increased shipments from China.
For example, in the first half of 2019, the prices for light amber honey (a major US import category) from principal suppliers (such as Argentina and India) declined, while Chinese honey prices remained at a very low level of about $1.1 per kilo – well below other suppliers’ rates.
|Jan-Jul 2018||Jan – Jul 2019|
In the future, global demand for quality honey will grow
Referring to market participants, Ekaterina Krivonos points out that low prices for Chinese honey leads to the displacement of other producers, and, in particular, to a decline in domestic prices for honey in Ukraine. Ukrainian beekeepers cannot compete with this level of prices, and there is a risk that the number of beekeepers will decrease.
At the same time, there are several problems with honey entering the markets. EU food safety authorities often return honey or issue warnings to exporters, notably because of antibiotics found in honey, lacking food safety certificates or improper packaging. In addition, many importers, both in Europe and in other regions, are facing honey fraud. Many market participants, as well as the InternationalFederation of Beekeeper’s Associations, Apimondia, have raised this issue.
The FAO expert stresses that in the longer term, population growth and increased incomes globally will drive the dynamics of the honey market, leading to increased demand for food in general and especially for natural foods with high nutritional value. Consumers, especially in the middle- and high-income countries, are increasingly interested in dietary diversity and are looking for healthier alternatives to sugar. Therefore, due to its natural properties and its increasing use in food, medicine, and cosmetics, quality honey will be in high demand.
However, for honey prices to firm up in the global market, exporters need to raise the awareness of consumers about the product properties, ensure the quality and safety of honey, including by establishment of appropriate quality standards and increased use of testing. Moreover, to ensure the transparency of the honey origin, traceability systems will be needed.
In September, Ukrainian honey producers and exporters participated with a national stand of Ukrainian honey at the Apimondia 2019 exhibition in Canada, with the support of UN FAO and the European Bank for Reconstruction and Development (EBRD). This event featured the national honey brand and the presentation of the key trends in the global honey market, the current situation in the domestic Ukrainian market, and Ukraine’s position as an exportert.