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US apple and cherry exports latest casualties of trade wars

US apple and cherry exports latest casualties of trade wars

The trade wars between the US and major importers of its goods are affecting fruit exports. Mexico and China have raised tariffs on US apples to 20% and 50% respectively. These two trading partners together received about 30% of the $969 million of total US apple exports in 2017. Mexican imports of US apples reached $275 million in 2017, representing 28% of total US apple exports. Under NAFTA, US apples were previously not subject to import tariffs in Mexico. Meanwhile, China opened its market to US apples in 2015, and imported about $18 million of US apples in 2017 when the tariff rate was 10%. India was the third largest destination for US apple exports in 2017, accounting for $97 million, or 10% of total exports. The Indian Government is set to apply a 30% retaliatory tariff on imports of US apples on January 31, 2019.

As for cherries, China has imposed a retaliatory tariff of 40%, raising the total tariff rate to 50%. US cherry exports to China were worth $123 million in 2017 – up 68% from 2016 and accounting for 19% of total US cherry exports. Following China’s implementation of retaliatory tariffs, US cherry exports were worth 19% less in 2018 as China seeks alternative, cheaper sources.

 

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Imported Chilean stonefruit recalled in US due to listeria fears

Imported Chilean stonefruit recalled in US due to listeria fears

Stonefruits produced in Chile have been recalled by retailers across the US due to the possibility of listeria contamination. Fresh peaches, nectarines and plums sold at a six major retailers in 18 states are affected. The Food and Drug Administration said the recall from the Yonkers wholesaler includes 1,727 cartons of peaches, 1,207 cartons of nectarines and 365 cartons of plums. No illnesses have been reported in connection with the recall, which occurred following a routine sampling by a packing house that found some products contained listeria monocytogenes. The affected peaches and nectarines are sold as a bulk retail produce item with the PLU sticker showing Chile as the country of origin. At Aldi, the recalled peaches, nectarines and plums are packaged in a two-pound bag bearing the Rio Duero label.

Source: Supermarket News

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USDA eases minimum grapefruit sizes

The US Department of Agriculture (USDA) has announced the adoption of an interim rule change that will relax the minimum size requirements of grapefruit. The new ruling, which came into force on April 24th, prescribes that minimum sizes of imported and domestically produced grapefruit will change from 3 5⁄16 inches to 3 inches in diameter. This reduction in size requirement is a response to increased market demand for small-sized grapefruit and an effort to support smaller producers, particularly those dealing with the devastation wreaked by Hurricane Irma by reducing fruit loss. This ruling will affect approximately 500 Florida citrus producers and around 50 citrus importers. Most grapefruit imported to the US comes from South Africa, Peru and Mexico, with 24,000 tons arriving in 2016.

 

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US citrus output set to fall by 21%

usda

The decline in US citrus production shows no sign of abating. This campaign’s crop of 6.2 million tons is expected to be 21% lower than last season. The reduction in output is common to all of the major citrus fruits, with orange and grapefruit the most affected. Indeed, orange production is set to fall by 25% and grapefruit volumes by 22%. Likewise, the decline is common to all of the four largest producing states, with Florida being the most affected due to the damage wreaked by Hurricane Irma. The low supplies are leading to higher citrus prices in the domestic market.

 

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Lime prices in the US at twice normal levels

limes

Lime prices in the US are double where they were at the same time last year. This has led to the world’s main producing countries, Mexico, Guatemala and Colombia preferring to export to the US, often at the expense of Europe. Brazil has responded to this opportunity by increasing its shipments to Europe, leading to a fall in prices. Prices in the US are traditionally high at this time of year with Southern Hemisphere production coming to an end while Northern Hemisphere production has yet to hit its peak. Guatemala is particularly well positioned as its campaign gets underway just as prices in the US reach their maximum. The high prices in the US are reducing demand for lime. However, these prices will no doubt very soon attract supplies from other countries and result in a fall.

Another key market for limes is Germany, with most limes on the market there coming from Brazil and Mexico, although Egypt is starting to make inroads too. Thanks to a steady supply, the average wholesale price is normal for this time of year and stands between €0.20 and €0.23 per unit. With the rising temperatures across the company, demand for limes has increased considerably.

Elsewhere, South African lime producers are concentrating on the domestic market where they can obtain better prices. In Israel, producers are hoping for better growing conditions than those faced over the past three years. The heat waves have accelerated fruit ripening and led to smaller calibres, which are unsuitable for export.

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Argentine lemon exports to the US recommence

CITRICS argentina LEMONS

Argentina’s lemon exports to the United States have officially begun, with the first shipments expected to arrive in around 30 days. A spokesperson for the Argentine Northwest Citizens Association (ACNOA), which brings together the region’s fruit producers, packaging plants and industries, said, “Given that this is our first campaign exporting to the US after many years, export volumes will be moderate as it takes time and effort to develop commercial programmes.”

The requirements of the US market are stringent and require a lengthier process than Argentina’s producers are used to. After harvest, the fruit is conditioned in packing plants and the lemon undergoes a degreening process. After this, the lemons are chilled until the order arrives for them to be packed, go through customs procedures and phytosanitary export controls, and finally leave for their destination.

The majority of exports of Argentina’s lemons will enter the US through Philadelphia. Companies such as San Miguel already have several orders from US importers and retailers, and calculate the countries lemon exports to the US will amount to 15,000 tons this year. As Argentina exported 230,000 tons of lemons last year, the US market is very much seen as one for the future rather than the present. Argentina’s main competitors for the US market will be Mexico and Chile, from where the US currently imports 50,000 tons and 41,000 tons respectively.

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China imposes additional tariffs on imports of US fruit

china trump

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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How significant are US fruit exports to China?

manzana china

Amidst an escalating trade war between China and the US, a historic event went little noticed. While the US has been exporting its apples to China since the 1990s, 2015 marked the first time that China had sent its apples in the opposite direction. However, plenty of technical barriers still remain. The two countries produce similar fruits and have seasons that run in parallel to one another. Likewise, they have huge domestic markets. This explains why the US has hitherto imported relatively little fresh produce from China. Indeed, in 2015, China was the fifth largest supplier of fruit and vegetable products to the US, behind Mexico, Canada, Chile, and the EU. Chinese exports of fruit and vegetable products to the US were worth US$1.4 billion, mainly consisting of processed products.

Only four kinds of fruits have been exported from China to the US: apple, pear, lychee, and longan.
Although apples and pears account for the largest share of the fruit produced in China, exports are relatively low. In 2016, China’s total output was 43.88 million tons, of which only 1.32 million tons was exported (3%), mainly to Thailand, the Philippines, India and Vietnam.

By contrast, the Chinese market is hugely important for US fruits, with Chinese consumers rushing to get their hands on imported goods. The variety and quality of the products arriving from the US have given them a firm foothold in China. The main products the US exports to China are apples, pears, plums, strawberries, cherries, grapes, and citrus fruits (orange, grapefruit, lemon). In 2017, 27,000 tons of US Cherries (worth US$170 million) entered the Chinese market, making it China’s fifth-largest fruit supplier and the only country in the Northern Hemisphere that is among China’s top ten fruit suppliers. It remains to be seen whether US products will be able to maintain their market share once the new round of trade tariffs kick in.

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Fresh fruit among potential targets of Chinese retaliation to US trade tariffs

121MARKET china ODF 2

The world’s second largest economy, China, has announced it will retaliate to the imposition of tariffs on Chinese goods imposed by the US if an agreement cannot be reached with Washington, On Friday morning, China’s commerce ministry published a list of 128 US products as potential targets. With an import value of $3 billion in 2017, the goods on the list include fresh fruit, dried fruit and nuts, which, according to the ministry, could face a 15% duty. Although details are still lacking, US soybeans are expected to be the biggest area of retaliation by the Chinese. Total US exports to China are expected to hit $172 billion this year. Below is a list of the potential targeted goods.

Bilateral trade between China and United States of America 

Product: 08 Edible fruit and nuts; peel of citrus fruit or melons

Product code

Product label

China’s imports from United States of America

Quantity in 2015

Quantity in 2016

‘0801

Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled

4

12

‘0802

Other nuts, fresh or dried, whether or not shelled or peeled (excluding coconuts, Brazil nuts …

33973

39127

‘0803

Bananas, incl. plantains, fresh or dried

 

 

‘0804

Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried

12

5

‘0805

Citrus fruit, fresh or dried

39064

70739

‘0806

Grapes, fresh or dried

31703

29715

‘0807

Melons, incl. watermelons, and papaws (papayas), fresh

 

1

‘0808

Apples, pears and quinces, fresh

41979

29519

‘0809

Apricots, cherries, peaches incl. nectarines, plums and sloes, fresh

20089

25691

‘0810

Fresh strawberries, raspberries, blackberries, back, white or red currants, gooseberries and …

 

0

‘0811

Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not …

1256

1302

‘0812

Fruit and nuts, provisionally preserved, e.g. by sulphur dioxide gas, in brine, in sulphur …

20

22

‘0813

Dried apricots, prunes, apples, peaches, pears, papaws “papayas”, tamarinds and other edible …

1530

1412

‘0814

Peel of citrus fruit or melons, incl. watermelons, fresh, frozen, dried or provisionally preserved …

10

1

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Wooden packaging makes the difference

2% rise in wooden packaging production in Spain last season, according to FEDEMCO

According to the Spanish Federation of Wooden Packaging and Components (FEDEMCO), the tay format accounts for 60% of packaging produced for sales items. The highest growth in recent years has been in the Pitufo® brand’s formats of less than 2.5kg, with which it has reached 35% of the market share. FEDEMCO is optimistic about future opportunities for expansion. The federation’s marketing and communications manager Roberto Garcia said, “There is a growing demand for wooden packaging for premium product lines. Wood offers a stylish presentation that enhances the quality of the packaged product, setting it apart from its rivals. There is also higher demand for ‘greener’ packaging.” Firms want to present their products to a more environmentally-conscious customer in natural, ecological packaging.

Openings in distant markets

Opportunities are opening up in new markets like the US and the Middle and Far East. Robert Garcia said, “Wooden packaging is greatly admired in these areas.” Exporters prefer wooden packaging as it offers greater resistance and thus ensures the product arrives in perfect condition. FEDEMCO will once again be in attendance at Fruit Logistica 2017 (Hall 11.2, Stands 8-10), where it will display various wooden packaging formats like the Pitufo® brand’s 1-2kg containers. Roberto Garcia said, “This format is the best suited to current market conditions.” Representatives of the federation’s member companies and the FEDEMCO team will be on hand to provide information about the commercial, hygienic and environmental benefits of using wooden packaging.