Two years ago, when the U.S. apple industry gained full varietal access to China, economist Desmond O’Rourke warned that the Asian nation might not be the panacea it appeared for apples, citrus, nuts and other commodities.
O’Rourke called China “extremely unreliable” for its ability to cut off trade, as it had for all U.S apples for two years on phytosanitary grounds.
In time, Washington apple exporters hoped China would grow from a 3 million-box, $60 million annual market to a 10 million-box market worth $200 million.
After the ban was lifted, Washington sold 2.9 million boxes of apples to China and Hong Kong from the 2014 crop. But sales dropped to 1.9 million boxes from the 2015 crop and, as of Jan. 3, were 1.2 million boxes this season.
The drop in 2015 was caused by China’s economic troubles, more high-quality Chinese Fuji apples competing against Washington apples and Washington’s supply being lower and prices higher, said Lindsey Huber, international marketing specialist at the Washington Apple Commission.
California farmers shipped more than $2 billion in agricultural goods to China and Hong Kong in 2014, according to the California Department of Food and Agriculture.
Almonds were the leading commodity at $402.2 million, followed by pistachios at $362.8 million, dairy products at $239.1 million and walnuts at $181.9 million, according to the CDFA.
While overall exports to China have been trending downward since 2013, California commodity groups aren’t very concerned — at least yet.
“It still remains strong for us,” said Michelle McNeil Connelly, the California Walnut Commission’s chief executive officer. “Year to date, we’re down just slightly ... but demand has been strong. ... The Chinese New Year is just around the corner, and that’s a peak consumption season for us.”
In the 2016-17 fiscal year, almond shipments to China are up 49 percent from this point last year, making China the largest export market for California almonds, followed by India and Spain, said Julie Adams, the Almond Board of California’s vice president of global, technical and regulatory affairs.
“The China government has expressed the priority of maintaining stability for 2017, which would be important for continued demand for imports such as almonds,” Adams said in an email.
For pistachios, China is the No. 1 export market. In the current fiscal year that started in September, China is buying as much as what the U.S. is shipping to the rest of the world and consuming domestically combined, said Richard Matoian, executive director of the Fresno-based American Pistachio Growers.
“It’s pretty incredible,” Matoian said. “China just seems to be going like gangbusters for us.”
Fruit producers are also optimistic that China will remain a key market. For citrus fruit, China and Hong Kong combined were the No. 3 destination behind South Korea and Japan in 2015 with about $130 million in purchases, said Bob Blakely, vice president of California Citrus Mutual.
“Citrus is something that they really like and actually, their buying power has increased,” Blakely said. “We haven’t seen an indication that that’s being affected.”
Meanwhile, access to China for California strawberries reopened last fall after 11 years of negotiations centered around pest control measures. The state Strawberry Commission expects China to become one of its biggest summer export markets within a couple of years.