USDA: China orange import demand still lagging

China’s appetite for imported oranges in 2021 will improve slightly with economic growth, but a new report from the U.S. Department of Agriculture predicts demand will remain well below pre-COVID levels.

The annual report on China citrus said China’s marketing year 2020-21 orange imports will grow only slightly to 290,000 metric tons, up slightly from 288,000 metric tons in 2019-20.

“This slight growth is forecast on assumption that the Chinese economy partially rebounds and increasing supplies of local citrus will depress import demand,” the report said. China imports oranges from Egypt, South Africa, Australia, the U.S. and Spain.

U.S. exports of oranges to China in 2019-20 (November to October) totaled 23,857 metric tons, down from 24,037 metrics tons in 2018-20 and 45,953 metric tons in 2017-18, according to USDA trade statistics.
The USDA said China’s orange production for 2020-21 is forecast at 7.5 million metric tons, up from 7.4 million metric tons in 2019-20. However, the USDA report said China’s growth in citrus production is slowing.

“In marketing year 2020-21 and subsequent years, the expansion of area planted is expected to slow as increasing production volumes from prior year plantings have pushed prices down,” the USDA said. “The downward price trend is expected to continue and industry experts expect Chinese citrus demand is quickly approaching its saturation point.”

According to the report, the unprecedented surge and spread of COVID-19 in marketing year 2019-20 had several consequences for the Chinese citrus market:

• The economic slowdown in 2020 made Chinese consumers more price sensitive and conservative in spending;
• Major local citrus importers who purchased southern hemisphere products in early 2020 encountered decreasing market demand and lost money, especially on imported oranges;
• Lockdowns and higher operational costs limited exports in 2019-20, leaving more in the domestic market and creating downward pressure on prices;
• Labor shortages and port backups in China and elsewhere had some negative impact on Chinese imports and exports in early 2020;
• Fewer imported fruits available in the wholesale market are leading some Chinese traders to put increasing attention on domestic fruit trade;
• Disinfection measures required at Chinese ports for all cold chain food products starting in late marketing year 2019-20 further raise the import cost;
• Consumers’ adoption of online and digital sales in the first half of 2020 will create lasting changes for offline retail stores; and 
• Brand building, even in fruit, is becoming more important to attract high-end consumers.