Apple Commission increases China promotions

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With China’s apple crop down 28 percent, the Washington Apple Commission sees an export opportunity despite tariffs.

CAPITAL PRESS – DAN WHEAT – ELLENSBURG, Wash. — The Washington Apple Commission agreed to spend a bit more money in export promotions in China this winter after cutting funding earlier due to anticipated losses from retaliatory tariffs.

The commission spent $879,950 on apple promotions in China last season but cut that to $549,300 for this season anticipating sales losses due to 50 percent tariffs in retaliation for U.S. tariffs on Chinese steel, aluminum and other goods.

“We cut it severely in May thinking no fruit would be going. Since that time, we know the Chinese crop is down 28 percent (due to a freeze and bad weather) so it appears we could have opportunity in China, maybe 30 to 50 percent of what it was this year,” Rebecca Lyons, the commission’s export marketing director, told commissioners at their meeting in Ellensburg, Sept. 20.

“We want to support that and keep some market presence. We hope this (the tariffs) is a temporary situation,” she said.

Washington exported 1.2 million boxes of apples to China from the 2017 crop, virtually all ahead of retaliatory tariffs, versus 1.8 million the season before. The total was 1.7 million and 2.8 million, respectively, with Hong Kong added.

Her written report stated Southern Hemisphere fruit quality is not holding up so Chinese importers are “looking to switch to Northern Hemisphere and Washington as soon as possible.”

France will ship Gala mainly to Shanghai but doesn’t have shelf life to go beyond Eastern China, she wrote. The Apple Commission will continue to work Eastern and Southern China, she wrote.

Todd Fryhover, commission president, said this is one of the most challenging times he’s seen given tariffs involving so many countries and the fluidity of trade negotiations.

China produces far more apples than any other country but typically consumes 97 percent of them, exporting just 3 percent. Its exports will probably be down by half this season, Fryhover said.

Europe has a large crop —‚ up 36 percent and more than double the U.S. crop — but Poland, the largest producer, has no access to China, leaving the opportunity for France, Fryhover said.

China still has no apple export access to India but exports to Thailand and other Southeast Asian countries, he said.

The international market situation is hard to predict, he said.

India’s production is up 15 million boxes, which means a slower Washington start there this season, he said.

“We sold over 8 million boxes there last year, which was remarkable. It’s great to build on, but it will be January before we see any volume back in,” he said. “My prediction is we will be 3 million there this year. Rebecca thinks it will be 6 million if China stays out of India, but that’s a big if.

“China’s No. 1 market last year was Bangladesh. With China down we could have a pretty good market in Southeast Asia, but the question is, What will Europe and France do?”

Lyons reported China is excited about Washington’s new Cosmic Crisp apple, which will debut in the fall of 2019 but be available in much greater volume in 2020.

Lyons took five Euro cartons of 2017 Cosmic Crisp apples to Asia Fruit Logistica in Hong Kong on Sept. 5, and sampling was “overwhelmingly positive.”

Some representatives from Taiwan and Thailand commented Cosmic was too tart and too high in price, but people from China were “most enthusiastic about getting some next season,” she said.

Fryhover said that’s good, as the industry expects to have large volumes quickly from 2020 onward.

Published by: Dan Wheat, Capital Press, September 24, 2018 10:06AM

Picture: Dan Wheat/Capital Press

Bins of apples are loaded on a truck for the trip to a packing shed from a McDougall & Sons’ orchard near Quincy, Wash., on Aug. 28. The Washington Apple Commission slightly increased export promotion money for China despite tariffs, due to a smaller Chinese crop.