“Organic Trade Intelligence Project” shows the array of products
that are imported is ever-increasing. Table 2 highlights the import data for 2006 and 2007 for three selected commodities. Two
of which, cocoa beans and coffee beans, are “classic” tropical
commodities. The vastly differing growth rates, 16. 4 percent for
coffee versus 102.4 percent for cocoa bean imports, is mainly
caused by one single factor: the entry of United Cocoa Processor
(UCP), a sizable Delaware processor of cocoa beans. UCP
Product Imported Imported Growth Rate Main Countries
Amounts 2006 Amounts 2007 Percent of Origin
Cocoa beans 1,131 2,230 102.4 Brazil,
Dominican Republic,
Peru, Ecuador,
Coffee 51,327 59,723 16. 4 Brazil, Columbia,
Guatemala, Indonesia,
Mexico
Strawberries 4,812 4,828 15. 4 China, Turkey
Table 2: Selected Imported Organic Products, Preliminary results (in metric tons)
achieved organic NOP certification at the end of 2006. Since
there are only a few small organic cocoa processors in the U.S.,
this market entry contributed majorly to the leap in the import
growth rate for cocoa beans. Strawberries, on the other hand,
show the slower, yet steadily growing trend for ingredients that
could be grown in the U.S. coming from other parts of the world.
Based on numbers from the Organic Intelligence Project, the
preliminary estimate of the value of imported organic products
pegs that number at around $2 billion. However, keep in mind
that the value of the imported ingredient or processed product
on average at least quintuples before it reaches the supermarket
shelf. Therefore, an import value of $2 billion would translate
into retail sales of at least $10 billion or more.
Keys to Successful Importing
There is an array of issues to deal with when you make the decision to import organic ingredients including: factoring customs
duties and shipping costs into your calculations; dealing with Letters of Credit, or LCs (the method of payment used for international trade); being aware of quotas (some ingredients like sugar
have a maximum you can import); and understanding country-specific customs regulations. (For example, very few countries are
allowed to import fresh herbs into the United States.) The main
issues include:
• Certification
• Quality and Product Specifications
• Regulatory Issues
• Shipping
• Letters of Credit
But before delving into these aspects, it’s prudent to emphasize the most important piece of the import equation: the relationship to the foreign supplier. Unless you import only on
occasion and only “simple” ingredients, this is the one aspect that
cannot be overestimated. Meeting suppliers in person, under-
standing their capabilities and constraints and touring their facilities cannot be replaced by any information
found on a website or from secondary
sources. This is even more important
in times of considerable supply constraints. For traders who are in organic
for the long-term, this is the most crucial part of the equation.
If you cannot do this part yourself,
seek somebody out who can do it for
you or has prior experience with the
specific supplier—a trusted trade colleague or consultant. Whoever it is,
building that relationship is paramount. Case in point: hops, used to
make beer. The prices of conventional
hops have quadrupled in the last 18
months and many suppliers have doubled the price for organic hops. We
have a long-term relationship with a
European hops supplier, and the
amount of hops traded has increased
substantially in the last eight years.
The proof that the relationship works
and that suppliers are more interested
in a long-term secure relationship
than making a quick buck became apparent last year when the price of conventional hops tripled due to severe
supply shortages. Several organic hop
suppliers doubled their prices but our
supplier didn’t.
Certification Clarification
When working with foreign suppliers to create products for the U.S. market, it’s important to make sure that
the product is “USDA Certified Organic” by a National Organic Program
(NOP) accredited certifier. There are
several organic certifications that exist
throughout the world from the EU to
Australia and Japan, but until equivalency agreements between these countries and the United States are worked
out, the only certification that counts
for products sold in the U.S. market is
the “USDA Certified Organic” seal.
Make sure you see the certificate before you purchase any product.
Unfortunately, NOP organic certifi-
