the fresh fruit market is driven by the forces of domestic demand and supply, under the strong trade
protection currently in place.
T&T is a net importer of concentrated juices, due both to processing plants, to supplement
production, and to other importers for the retail and wholesale markets. As far as the juice market is
concerned, it is estimated that the single processing facility - operated by the Co-operative Citrus Growers
Association (CCGA) - is currently absorbing roughly 50% of citrus production. Supply to CCGA however
tends to vary with domestic fresh fruit prices and weather conditions. Demand for citrus juices has been
growing despite the decline in domestic production (sales from the CCGA increased from 162,000 cartons
in 1994/1995 to 225,000 in 2002). In order to meet this increased demand, a substantial quantity of foreign
concentrate of both orange and grapefruit juices are imported from CARICOM countries (particularly
Belize), by both associate growers, for supplementing production of the processing plant, and other
importers supplying to the wholesale and retail markets.
Summarizing, the citrus market still concentrates in a traditional supply chain that has scant vertical
coordination, very limited requirements in terms of logistic and supply chain management and little
involvement of the modern retail structures (supermarkets). The structure resemble the case of a perfectly
competitive market with many independent transactions at the observable spot market price. There is great
fragmentation on both the selling and buying sides with large numbers of local retail grocery stores rather
than national chains with large store numbers and buying volumes per chain.
Beyond the major role played by agricultural and trade policies, which greatly support agricultural
production and the income of many producers and downstream operators, also the structure of the supply
chain tends to shield producers from excessive market power in downstream stages and lowers the
requirements for achieving an acceptable performance at production and post-harvesting stages (limited or
no requests of food safety assurances, quality and packaging characteristics, volume commitments,
promotional fees).
3. Agricultural and Trade Policies
The citrus industry in T&T is provided with substantial trade and domestic policy support.
Trade patterns and marketing strategies for citrus products in T&T are deeply affected by the
significant trade protection provided by sanitary and phyto-sanitary (SPS) regulations, which guarantee an
actual ban on import of fresh produce (plant quarantine restrictions). Moreover, a 40% Common External
Tariff is operated in the framework of CARICOM for both oranges and orange juice, while T&T ceiling
bindings in the WTO are 100% for both lines of products.
Producer support is also carried out through subsidies that are targeted particularly at the
establishment phase of the crop (partial reimbursement of establishment costs and supply of planting
materials at subsidised prices). However, this study estimates that 92% of the package of support provided
to orange farmers result from trade-related restrictions (see Section 4).
It is expected that the high level of trade-related support will change over time due to ongoing
changes in the whole trading environment. On one hand, it is not easy to ascertain how long restrictive
SPS measures will survive the development of liberalization in the fresh fruit market, either in the WTO
framework and/or above all in some of the main preferential schemes involving Trinidad and Tobago
(Free Trade Area of Americas - FTAA - and CARICOM bi-laterals). On the other hand, the entire set of
future trade agreements (WTO, ACP-EU EPAs, FTAA, and CARICOM bi-lateral agreements) are likely
to challenge current tariff rates; and again, the major potential sources of changes should be considered the
preferential deals, since the substantial amount of “water” in the bound tariffs and the opportunities related
to the development of the concept of “special products” (the “Framework for Establishing Modalities in
Agriculture”, July 31st 2004, states “Developing country Members will have the flexibility to designate an
appropriate number of products as Special Products, based on criteria of food security, livelihood
security and rural development needs. These products will be eligible for more flexible treatment”) could
provide room enough in the multilateral system of trade rules for keeping tariff protection unchanged.