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Could Australian producers benefit from China-US trade war?

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Experts are suggesting that the Australia may prove the main beneficiary of the US-China trade war, particularly when it comes to sales of apples and cherries, with China imposing a 15% tariff on both of the fruit. Overall, China’s tariff hikes could affect up to 25% of US agriculture, from which Australia’s wine and nut producers may also stand to gain. In 2017, around 40% of Australia’s fruit exports went to China and Hong Kong, while goods arriving from Chile, New Zealand and South Africa are also very popular. However, as the cherry and apple harvest are still several few months away, the dispute may be over without really affecting US exports to China. If not, the damage to the US fruit industry, especially Washington’s apple and cherry growers, could be devastating, Indeed, last year, China became the top importer of cherries from the state.

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China imposes additional tariffs on imports of US fruit

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On April 2, 2018, China announced that it would be immediately applying additional tariffs on 128 US products in response to similar tariffs imposed by the US. Approximately US$2 billion worth of  food and agricultural exports will be affected by the measure, including of fruit (fresh and dried) and tree nuts (shelled and in-shell). This decision came after China submitted a trade compensation consultation request to the US through the WTO, but subsequently concluded that no solution would be reached. The retaliatory tariffs were welcomed by the Chinese people.
The increase in tariffs affects a wide range of fresh and dried fruits grown in the US. For instance, US-grown oranges will now be subjected to a 26% import tariff as opposed to 11% previously. The tariif on imports of US Grapes has gone up from 13% to 28%, while the levy on apples has risen from 10% to 25%.

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Increased Asian demand for Peruvian foodstuffs

Peru boosts its perishable trade to Asia by 47% in 2 years.

Peruvian exports of fresh food products to Asia rose to US$ 496.1 million in 2015, which means a rise of 47% compared to 2015, thanks to the rise in demand for fruit such as grapes, mangoes and citrus, among others.

As for the volume dispatched, in 2015 there were 224,554 tons exported.

The Asian country that imported most fresh produce from Peru was China (US$ 140.8 million), meaning 28.3% of Peruvian agricultural deliveries. Next came Hong Kong (US$ 101.8 million), South Korea (US$ 72.2 million), then Japan, Vietnam, Thailand, Indonesia, Saudi Arabia, Taiwan, India and others; in total 32 destinations according to the figures provided by the exporters’ association ADEX.

Grapes one of Peru’s top exports to Asia

The product that saw the most volume exported was the grape (122,810 tons), which is currently one of Peru’s flagship food export products and is available at the time of the Chinese New Year.

Today, there are ever more Asian countries showing a clear trend in preference away from Red Globe to new seedless red grape varieties. However, despite the increase in demand from China, the United States is still the main destination market for fresh Peruvian grapes, accounting for 29% of the total exported.

Citrus and other emerging products

Another sector that is increasing its potential in Asia is Peruvian citrus. According to ADEX, these products have achieved greater production in recent years, above all in mandarins, which are harvested all year, peaking between April and August. Great expectations have been aroused by the recent introduction of these products into Japan.

ADEX reports that in addition to grapes and citrus, the products most in demand from Asian countries include mangoes, coffee, fresh seaweed, asparagus, cocoa beans, quinoa, bananas, maca, maca flour and giant white corn.

Image: By Addicted04, Connormah – Own work CC BY-SA 3.0