An Assessment of the Impact of Import Detentions on the Competitiveness of Guatemalan Snow Peas in U.S. Markets
GRA, ICADA (Guatemala)
J.W. Julian (GRA), G.H. Sullivan, S.C. Weller (Purdue University); G.E. Sanchez (ICADA)
The aim of this research was to quantify the impact of import detentions on the competitiveness of Guatemalan snow pea exports in the US market. An econometric model was developed using data from U.S. government databases to quantify US snow pea market activity. Additional information was collected from US market participants through telephone surveys. This information was analyzed in an effort to match market behavior with market perceptions.
1. Quantify the impact of the US FDA Import Alert 99-14 which mandated country wide automatic detention of raw agriculture products, in this case snow and sugar peas, from Guatemala in March of 1992. 2. Assess the current market perception of Guatemalan snow pea exports in light of this continued enforcement of automatic detention.
Import detentions of Guatemalan snow pea are no longer the result of pesticide contamination, but rather stem from the lack of credible production and post-harvest handling programs that meet FDA requirements for institutionalized pre-inspection protocols. This research found that continued import detentions are likely to have increased the presence of alternative suppliers in the US market. The combination of improved market access resulting from NAFTA and the current difficulties associated with importing Guatemalan snow peas has fostered the development of snow pea export programs in Central Mexico and Peru in recent years. These export programs directly compete with Guatemalan snowpeas in eastern markets of the United States. This research also suggests that excess snow pea production capacity, at times, drives the US market price below the breakeven point for some Guatemalan exporters and this suggests the need to broaden NTAE producer options into other NTAE crops. Import detentions increase the costs of importing Guatemalan snow peas, cause delays that greatly reduce the marketability of those snow peas and increase market volatility by detaining shipments at US ports of entry for prolonged periods.