While the business effects of COVID-19 have been severe, export sales of U.S. fresh produce to Asia are improving.
The extent of improvement depends on the region, said Craig Stauffer, CEO of the Issaquah, Wash.-based trading firm Vanguard International.
“We often speak about Asia as if it were a singular place, and in fact it includes over 45 countries,” Stauffer said April 13. “As each of these markets roll through their own individual experiences with COVID-19, the impact on trade can be seen in many ways.”
Stauffer said that China’s wholesale markets are open now, with some restrictions around access points and hours of operation.
“Demand is definitely improving, especially for citrus and other fruits that are high in vitamin C because the world has really rushed towards those products where people think they can bolster their immune systems,” he said.
“People in China are getting back to work, the ports are flowing freely, wholesale markets are back up and operating, and people are getting into their local grocery store again,” he said.
China first ordered a lockdon in Wuhan City, the center of the outbreak, on January 23, and measures were soon expanded to other provinces. Some of those measures were eased in late March.
Beyond COVID-19 business conditions, tariff issues in China have also been a drag on U.S. fresh produce exports to China, though Chinese importers can now ask for tariff exclusions for most retaliatory tariffs imposed since 2018.
Most trade impacts of the COVID-19 pandemic have yet to be recorded, but export performance in February was strong to Asia for citrus.
U.S. Department of Agriculture trade statistics for the 12-month period through February 2020 show export sales of oranges and tangerines to all Asian markets totaled $428 million, up 10% from $388 million compared with the same period in 2018-19. Exports of U.S. oranges and tangerines to South Korea totaled $58.5 million in February this year. up from $33.6 million in February 2019.
Exports of oranges and tangerines to China in February 2020 totaled $2.85 million, nearly double the $1.5 million shipped to China in February 2019.
Exports of U.S. apples to all Asian markets totaled $336 million from March 2019 to February 2020, down 10% from $375 million the previous year. Shipments of apples to China totaled $926,000 in February, down from $1.6 million in January and 29% lower than a year ago. Shipments to Taiwan in February were $2.7 million, less than one-third of the $9.5 million in exports in February 2019.
Shipments of U.S. fresh vegetables to all Asian markets from March 2019 to February 2020 totaled $192 million, down 19% from $238 million the previous year.
Compared to China, Hong Kong is coming back somewhat slower with import demand, Stauffer said, in part because the near-total lack of tourism has diminished demand substantially compared with normal levels.
India, the third-largest customer for U.S. apples in 2018-19, slid to the fifth biggest export market in 2019-20 because of the country’s recent lock-down related to COVID-19 social distancing measures. For the 12-month period from March 2019 to February, U.S. apple export sales were $50 million, down from 65% compared with $140 million in 2018-19.
Stauffer said overall export supply chain bottlenecks are slowing easing.
“We are optimistic that trucks, ocean carriers and even air freight carriers will contend with the current bottlenecks and we are seeing areas of improvement,” Stauffer said.
Sudden impact
The emergence of novel coronavirus COVID-19 this year created sudden stress on global trade, Stauffer said.
“It is just amazing how something can come out of nowhere and totally disrupt normal day-to-day living and operations in business,” he said.
Stauffer sees reason for optimism for fresh produce demand.
“I think it’s very exciting to see the increased focus on eating healthy, eating more fruit,” he said. “Food is medicine in its purest form.”
Stauffer also believes that global trade will overcome COVID-19 just as it has overcome other challenges.
“Whether it’s weather events, or trade tariffs or embargoes, more often than not new markets and new players emerge, and I think you are going to see that coming out of the COVID-19 crisis.”
