By DAN WHEAT
China is much on the mind of some in the Washington apple industry these days.
Annual bilateral talks between the U.S. and China on the trade of apples, pears, cherries, potatoes, wood products and many other items are coming up Nov. 16-18 in Hawaii.
Washington Gov. Christine Gregoire just completed a trade mission to China and Vietnam, where greater varietal access for Washington apples was discussed.
And one week ago, a group of Chinese importers, wholesalers and retailers visited apple shippers in Wenatchee and Yakima to learn about the industry and buy more apples.
But for Todd Fryhover, president of the Washington Apple Commission in Wenatchee, it was seeing a major Chinese apple region while on the governor's trade mission that was of particular interest. Fryhover had visited Chinese markets in the past, but not a growing region.
He visited Shandong Province on China's central coast. What he saw and learned there bolsters the notion that Washington growers may not have so much to fear if China gains access for its apples in the United States. Short of that, what he saw questions China's willingness and ability to enter the U.S. market in a huge way.
China is by far the world's largest apple producer, growing more than six times the amount of the United States, the world's second-largest producer.
China exports only 4 percent of its crop. But that's 60 million boxes, about double what the U.S. exports. China wants to export 80 million boxes. If it doubled its exports to 8 percent of its crop it would "certainly make the Fuji market (China grows mainly Fuji) very difficult for anyone around the world," Fryhover said.
The oversupply would also affect the sales of other varieties grown in the United States, Europe and the Southern Hemisphere.
But here's what Fryhover learned in Shandong that hampers China's ability to flood Europe, Canada and the U.S. -- if it were open to Chinese apples -- with cheap apples:
* With 96 percent of the apples China grows sold unwashed domestically, there's a lack of modern packing sheds equipped to meet U.S., Canadian and European phytosanitary standards.
* There's a lack of organization. There's no trade association, government or other entity strategizing for the industry for the future.
* Growers are near-term focused, looking to maximize volume to make the most money. They have no interest in cutting every other tree out of dense orchards for long-term gains in yield and color.
* It costs Chinese shippers more to meet Canadian, European and U.S. phytosanitary standards than to sell to India and the Middle East, where standards are lower.
China also needs a lot of apples for its domestic supply, but its juicing plants are idle right now from oversupply, Fryhover said. "If they export more it would help their (juice) processors, but for our processors (competing against cheap Chinese juice) it could even get worse," he said.
It all comes down to economics, he said. He doesn't think China will eye the U.S. in a big way for fresh apple exports when it can sell to India and the Middle East more easily for greater economic gain. But the Washington industry is also interested in growing those markets and hopes consumers there are willing to pay more for superior Washington quality.
The sheer volume of China's production always gives one pause. What if they got organized? What if they built more modern packing facilities?
These are issues that bear watching.