WENATCHEE, Wash. — Washington apple exports maybe poised for a very good year following a couple rough years but trade disputes could arise.
It could be a good year because Europe is forecast down 21 percent in apple production, Mexico is down 30 percent, the U.S. is down 8 percent, Michigan is down 27 percent and Canada is down 5 percent, mostly all due to weather, while Washington has another large crop down only 1 percent. Foreign buying power is up because of a weakening U.S. dollar.
“With reduced crop volumes from competitors, (our) market prices should stabilize January forward and improve throughout Asia as well as the Middle East,” said Todd Fryhover, president of the Washington Apple Commission in Wenatchee.
Southeast Asia is the commission’s target for export growth.
“I’m certainly more optimistic than last season but I wouldn’t predict a return to 2012 price levels,” Fryhover said.
The 2012-13 sales season remains thought of as a once-in-a-lifetime event with strong prices and demand domestically and overseas with a huge Washington crop and almost no competition as other crops were drastically down.
A return to more normal fruit size, following too much large fruit last season, should help to expand markets like Vietnam and China, Fryhover said.
It should also help in Indonesia but import permitting hampers growth there, he said.
Exports should be substantially better this year, but how heavily China exports apples into Southeast Asia and North American Free Trade Agreement negotiations are issues of uncertainty, said Desmond O’Rourke, retired Washington State University agricultural economist and world apple analyst.
China boosted its exports last year and has another big crop this year, O’Rourke said. NAFTA negotiations are not going well and it could be well into next year before agreement is reached, he said. They could affect exports to Mexico and Canada, Washington’s top two apple export markets.
“The whole geopolitical situation is more challenging than in 2012. All sorts of protectionist devices, like in Indonesia, have increased and our whole relationship with China is very tense. A problem in one or two big countries could alter things,” O’Rourke said.
Washington typically exports 30 percent or more of its apple crop. In the 2016 season just ending, it exported 40.6 million, 40-pound boxes of apples or 30.5 percent of the crop, Fryhover said. That was up from 33 million or 28.6 percent in 2015 which was down from 50.6 million and 35.6 percent in the record crop in 2014, he said.
The 2016 season saw improved export pricing and volumes but there were struggles on packout so the bin return to grower was less than desired, he said.
O’Rourke said 2016 was tougher than 2015 because while volume was up, low prices of Red Delicious hurt.
Washington exported 12.7 million boxes to Mexico in 2016 up 38 percent from 9.24 million in 2015, O’Rourke said. Canada dropped slightly to 5.54 million from 5.62 million. India doubled from 2.4 million to 4.8 million.
Exports to China rose to 1.78 million boxes in 2016 from 1.27 million in 2015 following 1.35 in 2014. Full varietal access was gained to China in 2015 and the Apple Commission has high hopes for future growth.
That’s tempered by China sharing protectionist attitudes with Japan and South Korea and being very vulnerable to political tensions with the U.S., O’Rourke said.
“The Trump administration is talking about tariffs on solar panels from China and there’s fighting over steel dumping by China. Fruit could become an issue and China prefers Southern Hemisphere fruit to ours,” he said.
China also has zero decay tolerance which causes shippers to be cautious, Fryhover said. Sizing, color and price also play a big role, he said.
Washington shipped its first apples to Japan in 16 years this past year but it was very limited, the protocol is not easy and it hopefully will continue but probably not grow much, Fryhover said.
Years ago, the protocols increased shipping cost to Japan by $10 per box, that’s probably increased so growth isn’t likely, O’Rourke said.
“Japan mainly raises its own apples and keeps its doors shut to all others,” he said. “It only allowed 106,000 boxes in 2016, probably all from New Zealand.”