China, India may triple apple imports
Economist's study looked at Asian import markets
By DAN WHEAT
PULLMAN, Wash. -- China and India will triple their imports of apples in the next 10 years, Indonesia will double its imports and there are plenty of opportunities in the smaller Asian markets like Sri Lanka, Malaysia and Thailand, a private economist says.
That's all if per capita income keeps rising in those countries at the rate it did between 2000 and 2010 -- and most independent analysts think it will, says Desmond O'Rourke, consultant and retired Washington State University agriculture economics professor.
O'Rourke, president of Belrose Inc., recently completed a three-month study of Asian import demand for apples, pears, sweet cherries and kiwifruit.
The study, which he is offering to fruit companies and anyone else for $300 per copy, develops quantitative estimates of the potential demand for imports in 16 Asian countries if present rates of economic growth continue, or if they fall by half.
The study looks at key factors that affect imports including consumers' cultural values and politicians' subtle opposition to free trade. It looks at competition for those markets which, O'Rourke believes, will intensify as more exporters seek to expand there.
"While there has been considerable emphasis on import potential of China, India and Indonesia, many other Asian markets, such as Sri Lanka, Malaysia and Thailand, also offer excellent prospects," O'Rourke said.
Those countries have growing personal income and are too tropical to grow apples, pears and cherries, he said.
Sri Lanka, compared with Pakistan, has its act together politically and economically, he said.
Meanwhile, import demand may weaken in established markets of Japan and Taiwan, he said, because Japan's economy is struggling, its population is falling and economic growth will be flat. Japan has heavy restrictions on U.S. apples and pears and there's not much potential for expansion of U.S. cherries there, O'Rourke said.
While China, India and Indonesia are the big prizes, the Pacific Northwest will have to compete with other fruit exporters for a piece of the growth, he said. Chile, New Zealand and South Africa are all big exporters with an eye on Asian markets, he said.
"I'm not saying we will get all the doubling or tripling of the markets. We will have to fight it out with them," he said.
U.S. apples face a 50 percent tariff in India, are currently banned in China and there have been restrictions in Indonesia. Prior to China's ban, Pacific Northwest apples were doing well there and they continue to do so in India.
China favors Southern Hemisphere fruit because it is produced in its off season, O'Rourke said.
China is the world's leading apple and pear producer. It produces two-thirds of the world's pears and 38 percent of the apples. India doesn't grow a lot of apples and Indonesia doesn't grow any.
O'Rourke doesn't forecast much growth for Northwest pears in China because China is such a huge producer of pears and dominates Asian markets.
"We can probably double our exports of pears to India and increase two-thirds to Indonesia but in South Korea and China will have no growth at all," he said.
Unlike pears the opportunity for Northwest and California cherries is in China, Hong Kong, Taiwan and South Korea, O'Rourke said. Chilean cherries also could gain in those markets, he said. However, China could be a competitor in cherries if it can improve its quality, he said.
Japan, Taiwan, South Korea and China import kiwi and the greatest growth potential is everywhere but Japan, O'Rourke said. The fruit comes from New Zealand, Chile, Italy and a small amount from California.
"There is tremendous opportunity in the Asian market for U.S. exporters if the growth rate of income continues," O'Rourke said.
Europe will be no growth or decline and the Middle East and South America will have little growth, he said. But Mexico and Canada, the largest export markets of Northwest apples, still could grow, he said. U.S. apples are displacing Canadian apples and Mexico's per capita income is rising, he said.
There's a lot of American export interest in Asia. Companies can use the study to plan export strategies, he said.