USDA FAS: Who is fighting for market share for fruit exports to China

12/11/2010 06:01:49 AM
Tom Karst

Taiwan citrus peaks in freshness about the same time as U.S. oranges, making them a direct competitor. Should Brazil gain access for its fresh citrus in the future, the U.S. will acquire a major new competitor in China with very low prices. The Brazilian orange harvest runs July-January and can compete with fresh U.S. oranges in the later part of the season. Promotional activity by competitors remains minimal in this category.

Grapes, fresh or dried: China?s grape consumption has been rising 10% per year. Imports have also been rising rapidly since 2007, more than doubling from $81 million to $189 million in 2009. Chile and the U.S. collectively hold 80-90% of the market. The two countries have limited competition with seasons that do not greatly overlap. Peru has obtained a 5-10% share of the market in recent years putting it in third place.

Peru, which harvests grapes October-March, has the potential to compete with U.S. grape exports towards the end of the U.S. harvest season. However, it is China?s domestic production of 7.7 MMT of table grapes– up 8% in 2009/2010 – that competes most strongly with fresh U.S. table grapes. The expansion of cold transport and increased grape production in southern China has allowed fresh domestic grapes to reach the South China markets where U.S. table grapes have been very successful in the past. Competing with Chinese table grapes requires building new markets and making more consumers familiar with U.S. grapes.

Work with importers and retailers on fresh fruit handling is also important to maintain U.S. advantages in freshness and enable products to reach the rapidly growing cities of China?s interior. Stone Fruit: Chinese imports of stone fruit (code 080900, apricots, cherries, peaches, plums, and sloes) have soared from an average of less than $15 million in 2007 to $55 million in 2009. Much of this gain has come from rapid growth in Chilean plum and cherry exports to China. Total Chilean exports in this product category have gone from less than $1 million in 2006 to $40 million in 2009. Similar to the case for apples, pears, and quinces, Chile?s entry has more or less forced New Zealand out of this market. Chile benefits from a shipping season that allows it to supply China during the Spring Festival holiday when red fruit, such as cherries, are particularly popular.

The U.S. has also gained from growth in cherry exports. U.S. exports in the entire category have risen from $3 million to $15 million between 2006 and 2009. The taste, color, and large size of U.S. cherries make them popular as gifts. Similar to the case for Red Delicious apples, U.S. cherries can sell well when packaged as gifts for the annual “Dragon Boat Festival” (Duanwu Jie) in late summer. Similar to table grapes, the competitive strategy for fresh U.S. cherries is to expand the reach of their products in inland China. However, cold chain distribution systems and handling practices in inland China are largely inadequate. Competitor promotion has been limited in this category.


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