China’s MY 2009 peach/nectarine production is forecast at 9.8 MMT, up two percent from the previous year. Production continues to increase steadily in spite of reduced acreage, as the majority of planted trees have come to full production cycle.
Voluntary - Public
Clearance Office: Office of Global Analysis (OGA)
GAIN Report Number: CH9042
China - Peoples Republic of
Stone Fruit Annual
Chanda Beckman, Wu Bugang, and Freddie Xu
China?s MY 2009 peach/nectarine production is forecast at 9.8 MMT, up two percent from the previous year.
Production continues to increase steadily in spite of reduced acreage, as the majority of planted trees have come to full
production cycle. Cherry production is forecast at 195,000 MT in MY 2009, up 12 percent from the previous year, as
new plantings in previous years have become bearing. Peaches are a favorite fruit among Chinese consumers, yet as
China?s peach production continues to increase, consumption growth has shown signs of a slowdown. Cherry
consumption is growing as a result of increased production, which makes the fruit more affordable.
China?s marketing year 2009 (MY January-December) peach/nectarine production is forecast at 9.8 million metric tons
(MMT), up two percent from the previous year. Peach production continues to increase steadily in spite of reduced
acreage, as the majority of planted trees have come to full production cycle. The MY 2007 production figure is revised
up 13 percent to nine MMT, in line with FAS/China interviews and official statistics. As a result, MY 2008 production
is also adjusted up to 9.6 MMT.
Peach/nectarine acreage is forecast at 675,000 hectares in MY 2009, down two percent from the previous year. Fruit
farmers in Shandong Province, the top peach producing province, are slowly reducing peach acreage as prices have
remained at low levels. Consequently, some farmers have elected to decrease their peach planted area in favor of
planting other more profitable fruits, such as cherries. In southeastern China, however, returns from peach farming are
quite substantial, yet an endemic shortage of land resources has prevented acreage expansion in this area.
Peach quality is expected to continue to improve with enhanced orchard management. For example in Wuxi, Jiangsu
Province, all peaches are bagged on the tree to achieve an unblemished look and prevent pesticide residues. The number
of fruit on each tree is tightly controlled at around 200 peaches through flower/fruit thinning. The average yield in
Jiangsu is reported at about 30 MT per hectare. According to local farmers, production costs including labor totaled
$4,392 per hectare in 2009, unchanged from the previous year.
Cherry production is forecast at 195,000 MT in MY 2009, up 12 percent from the previous year, as new plantings in
previous years have become bearing. FAS/China forecasts the trend of production increases will continue in the next
few years as these new plantings reach their full production stage. Cherry plantation in the major production areas of
Yantai, Shandong Province and Dalian, Liaoning Province seems to have stabilized with the limited land suitable for
cherry farming, but acreage is expanding to the mid-west of Shandong and other provinces such as Shaanxi, Henan,
Hebei, and Sichuan.
China?s cherry planted area is forecast at 57,750 hectares in MY 2009, up five percent from the previous year as returns
of planting cherries remain profitable. The average farm size of each household is reported at 0.1-0.2 hectares, and large
scale production is very uncommon. The largest farm that FAS/China has visited is less than 60 hectares. In Yantai,
where farmers? skills are quite mature, yields range from 7.5 MT (in green houses) to 15 MT (in the field).
Green house cherries are available on the market beginning in late February, but quantities are very limited. It is
estimated that green house production accounts for only 5-10 percent of China?s total production. The majority of
cherries are harvested between mid-May and late-June.
As is the case for peaches, cherry quality is expected to improve in MY 2009, mainly attributed to good weather. The
first few months of 2009 have brought less rain compared with the same period last year. Excessive rain during the
fruit?s development stage results in fruit splitting. Instead, in order to increase cherry size farmers water the trees
intensively before harvest and some even apply chemicals to aid in fruit enlargement. On average, cherries from Yantai
weigh 15-16 grams each, with a brix of 17-18 degrees.
There are many varieties being planted in China. The most poplar is Red Lantern, a locally-bred variety whose
production accounts for nearly 40 percent of China?s total. Other major varieties were mostly introduced from overseas
including: Ukraine Series, Black Tartarian, Napoleon, Hongyan, Meizao (American Early), Rainier, Bing, Bigarreau
Moreau, Van, Lapins, and Stella. China?s farmers are testing more new varieties under trial production.
Peaches are a favorite fruit among Chinese consumers. However, as China?s peach production continues to increase at a
somewhat rapid pace, consumption growth has shown signs of a slowdown. In fact, many peaches are processed into
juice/nectar or canned fruit, as was the case in June ? August 2008, when the market was flooded with the fruit.
Consumers in northern China prefer sweet and firm-flesh peaches with a slightly sour taste, while southern consumers
prefer sweet and soft-flesh peaches.
Cherry consumption is growing rapidly in China as a result of increased production, which makes the fruit more
affordable for regular consumers. Although cherries are still priced much higher than more ?traditional? fruit like apples,
prices have dropped significantly from a few years ago. Locally produced cherries are only available in larger cities like
Beijing, Shanghai, Dalian, Shenyang, and Yantai. Post interviews with traders indicate Beijing?s consumers like sweet
and sour tasting cherries, while consumers down south in the Yangtze Delta prefer sweeter varieties. Yellow cherries
(that look similar to Rainier) are particularly favored in Dalian for their appearance.
Imported cherries have become a new popular purchase among high-end consumers in big cities and the economic
recession seems to have had limited impact on the import growth of cherries. A new trend emerging for cherries is the
gift market. More and more, Chinese consumers are purchasing imported cherries to give as gifts during Chinese
holidays like the Spring Festival (Lunar New Year). Consumers traditionally chose other less expensive, more shelf-
stable imported fruit such as apples and oranges.
Although peach prices in major producing provinces like Shandong and Hebei have increased slightly over the past few
years, overall prices remain at low levels. Peaches produced in southern China are priced much higher than their
northern counterparts. The farm gate price for top grade peaches in Wuxi, for example, is quoted at $4 per kilogram.
Cherry prices have remained strong in recent years, despite the impact of increased production and greater supply
availability in the market. When green house cherries first come onto the market in late February or early March, prices
reach as high as $60 per kilo. Wholesale market prices drop sharply to $4 per kilo when field cherry harvesting begins in
Source: Ministry of Agriculture
Cherry imports are forecast at 4,700 MT in MY 2009, up 40 percent from the previous year, as the fruit continues to gain
popularity among China?s middle-class consumers. Although cherry production in China is also increasing rapidly, it is
unlikely to impact cherry imports because the local supply season only lasts about one month and does not overlap with
the supply period of imported cherries. Chile will likely remain the top supplier of imported cherries to China, given
lowered tariff (see Policy) and because Chile?s supply season coincides with the Chinese New Year, when consumption
of imported fruit reaches its peak. Chile exported 2,845 MT of cherries to China during 2008, accounting for 85 percent
of China?s total imports. The United States supplied the remaining share.
China does not typically import peaches/nectarines.
Peach/nectarine exports are forecast at 27,500 MT in MY 2009, up just five percent from 2008. Export growth is
expected to slow due to weakened demand from neighboring Asian countries in the wake of the global economic
recession. Peach exports jumped by 21 percent in 2008 to 24,386 MT. China?s overall quantity of peach exports
remains quite small because the delicate fruit requires a comprehensive cold chain with stable temperatures during
transportation, something virtually non-existent or prohibitively expensive for many export traders in China.
The central government?s role in fruit production is geared towards provision of policy guidance and technical support to
farmers, FAS/China is not aware of any direct financing from the central government. Financial support, including
subsidies, always takes place at lower government levels. The city government of Zaozhuang, Shandong Province, for
example, currently provides subsidized loans amounting to $43,923 per hectare for farmers to build green houses
equipped with pipe irrigation facilities. Similarly, in Fushun District of Dalian, the local government provides $21,962
as a one-time subsidy to every qualified farmer who builds steel-frame rain shields over their cherry orchards to avoid
fruit splitting caused by rain.
Although the number of farmer cooperatives is increasing in China, they generally only include small numbers of
farmers and play a very limited role in production or marketing. Ministry of Agriculture, Technical Service Extension
Center statistics report more than 300,000 farmer cooperatives are currently operating throughout the country, but
estimate 15 percent of the farmers (or 90 million farmers) have enrolled in these cooperatives. A cherry cooperative
association in Yantai, for example, shares only information about production, storage, and preservation among member
farmers. This particular association does not conduct joint marketing activities.
Currently, China has granted market access to stone fruit originating in Chile, the United States, and New Zealand.
China signed free trade agreements (FTAs) with Chile and New Zealand in 2006 and 2008, respectively, which allows
imports of stone fruit from the two countries to enter China?s market at a lower cost. According to the FTA, fresh
cherries from Chile and New Zealand will enjoy a zero tariff on imports to China?s market by 2010 and 2012,
respectively. The MFN import tariffs for stone fruit remain at 10 percent. Fruit importers also pay a 13-percent VAT.
A growing middle class and increasing incomes in China have led to consumer demand for greater quality and more
variety of fruits. In more developed cities, imported fruit also benefits from improved infrastructure, cold-chain storage
facilities, and transportation in China. According to the California Cherry Advisory Board and the Northwest Cherry
Growers, about 2,137 tons of U.S. cherries, worth $11 million, were consumed in China in 2008. The value of U.S.
cherry exports to China, including transshipments from Hong Kong, has experienced a 20-30 percent growth in the past
three years. Based on interviews with industry, China?s total cherry imports show a steady increase over the past three
years, with a record high in 2008. Traders also indicate that continued growth can be expected in the next few years.
Plums currently enjoy a small niche market in China. According to Global Trade Atlas data, U.S. plum exports to
China remained steady at $2.9 million in 2008, while Chilean plum exports have grown from zero in 2006 to $9.2
million in 2007 and $8.4 million in 2008. Given the fact that some Chinese consumers are willing to pay premium
prices for high quality imported fruit, China is still considered a promising market for the California plum industry.
Peaches, Nectarines, and Apricots
China currently does not offer market access to U.S. fresh peach, nectarine, or apricot imports.
Guangzhou remains the hub for stone fruit imports from the United States, with Shanghai and Beijing not far behind.
For direct shipments of U.S. cherries, 50 percent of total shipments come through Shanghai?s port, 40 percent through
Guangzhou, and 10 percent through Beijing. Imported U.S. cherries, especially California cherries, face more
competition in North China, as there are several cherry growing areas in this region and the majority of the domestic
production is available from mid May through the end of June. However, it is important to note that direct shipments to
Beijing still increased by 235 percent from 26 MT in 2007 to 87 MT in 2008.
Most U.S. plums arrive in China through Guangzhou, and are then shipped to major cities like Shanghai and Beijing,
where disposable incomes facilitate the sale of high-end imported products.
FAS/China estimates that about 30 percent of China?s U.S. cherry consumption is from direct exports from the United
States, up from 20 percent in 2007. The remaining 70 percent enters through grey channels. Progress has been made in
direct shipments. Establishing stronger trade relationships with local traders in China is helpful to encourage direct
trade. Education about U.S. product characteristics and health benefits also remains critical to expanding distribution
networks in China. Characteristics such as seasonal availability and varieties of U.S. cherries, packaging offerings,
attributes that differentiate from domestically produced cherries and imports from other countries, and storage and
handling techniques should be highlighted. In addition, trade/buying missions to visit production areas and meet with
exporters can enhance relationships with local traders and build confidence in importing U.S. cherries.
Retail stores remain the predominant venue to sell U.S. cherries. Industry data shows that about 80 percent of U.S.
cherry imports are sold at retail chains like Carrefour and Wal-Mart and 20 percent at traditional wet markets or smaller
fruit stores. Imported U.S. plums are found in high-end retail outlets, restaurants, and four and five-star hotels. Four
different colored plums (red, yellow, black, and green) are available on the market.
Consumer/trade education is always an indispensable factor in driving demand for imported products. The United
States is viewed as the epitome of a high quality goods supplier. Creating and enhancing the image of premium quality
U.S. stone fruit in China is essential to boost U.S. exports to China over the long term. In-store promotions, tastings,
and display of point-of-purchase materials have proven to be effective in increasing product awareness among Chinese
consumers. Sales of U.S. stone fruits have doubled and sometimes tripled during these promotion periods. Training
seminars targeting traders and retail managers on product handling and tips to increase profitability can help build trade
In addition to on-site promotional activities, reaching targeted consumers through media exposure also plays an
important role in raising consumer awareness of the premium quality of U.S. stone fruits. The unique growing
conditions in the United States, health benefits, and high U.S. food safety standards make U.S. stone fruits appealing to
China?s affluent middle class.
Packaging is another important factor to be considered as an
effective way to stimulate sales, especially during holiday seasons. Chinese consumers tend to buy visually attractive,
well-packaged products as gifts for important contacts or relatives. The same is true with high quality seasonal
products. When domestic cherries are available, local growers and wholesalers will prepare well designed retail-size
packages mainly for two reasons. First, cherries are a perishable fruit and putting them in individual packages can avoid
excessive touching by consumers. Second, some growers/wholesalers find it a helpful tool to promote their premium
quality cherries and strengthen their brand. In terms of imported cherries, 18 or 20 lb boxes, and also 5kg or 2.5kg
boxes are well accepted in East China, as there is a tendency for some consumers to buy a whole box of imported
cherries either for personal consumption or as a gift.
Industry sources indicate that taste preferences for different plum varieties vary geographically. Generally, consumers
in northern China prefer sweet plums while those in southern China prefer a more tart tasting fruit. In terms of cherries,
consumers in first-tier cities prefer larger cherries, for example 9.5-10 row cherries, while 10.5-11 row cherries move
fast in emerging city markets (ECMs). The majority of consumers in China prefer darker, firm skin cherries, as they
believe they are sweeter and fresher.
Although U.S. peaches do not have market access to China, it is worth noting that local governments and/or farm
cooperatives in peach growing regions are organizing marketing activities to help peach growers/brokers sell their
peaches. Some famous local varieties of peaches are registered as ?famous brands? in the name of its growing region.
A peach blossom festival is held every year during the blossom season, and serves as a good platform for social
networking and making contacts. Growers/brokers invite their clients such as retailers, institutional buyers, and
wholesalers to visit production areas and discuss orders. With massive media exposure during the festival, more
consumers become familiar with certain regional peaches and their reputation is enhanced.
Emerging city markets such as Hangzhou, Wenzhou, Shenzhen, Dongguan, Qingdao, and Chengdu offer untapped
opportunities for U.S. stone fruits. The growing population of citizens in ECMs has had limited exposure to imported
food products, when compared to exposure to high-end or luxury imported products like automobiles and handbags.
Once distribution channels are identified and consumer education is increased in these ECMs, they will become the next
wave escalating imports of U.S. stone fruits.
Best Prospect Cities for Imported U.S. Stone Fruits
(Based on 2008 Data)
City GDP Estimated Per Population (million)
(billion yuan) Capita GDP ($)
Beijing 1048.8 9,075 16.95
Qingdao 443.6 8,508 7.62
Shanghai 1369.8 10,603 18.88
Hangzhou 478.1 8,699 7.97
Ningbo 396.4 10,199 5.68
Guangzhou 821.6 11,795 10.18
Shenzhen 780.7 13,010 8.77
Gongguan 370.3 7,787 6.95
Wuhan 396 6,947 8.33
Chengdu 390.1 4,486 12.71
Source: 2009 statistic report from city statistical bureau
* 2008 average exchange rate: 1 USD= 6.84 RMB
U.S. cherries compete with local cherries from the end of May to the end of June. In north China increased production,
improved quality of local cherries, and relatively lower prices make local cherries very competitive and can adversely
impact demand for U.S. cherries. Although China?s cold chain management cannot yet transport large quantities of
cherries from production areas to coastal areas like Shanghai and Guangzhou, the situation is expected to improve as
China continues to invest in infrastructure improvements. Major cherry orchard owners, together with newly
established farm cooperatives, are experimenting with different ways to preserve cherries long enough so they arrive at
retail locations as though they were just picked. Currently, some local cherry growers can store cherries for as long as
one month. However, quantities are small and fruit quality quickly deteriorates when moved out of storage. Cold chain
remains a challenge for U.S. cherries exports to China as well. Even though cold storage facilities exist at most fruit
wholesale markets, when it comes to retailer distribution and selling cherries at retail stores, proper cold chain
management cannot be guaranteed.
Although Chilean cherries do not compete for shelf space with U.S. product because they are mainly available during
January or February, they do have impact sales of U.S. cherries. U.S. cherries are typically sold at double the price of
Chilean product, so some distributors and retailers sell Chilean cherries but claim they are of U.S. origin. Faced with
misleading sales tactics, distributors, retailers, and consumers who lack knowledge about the actual availability of U.S.
cherries are easily confused.
Competition for U.S. plums mainly comes from local plums that share the same season. China began planting U.S.
plum varieties in Northern provinces several years ago. The overall quality of locally produced plums has improved
dramatically in recent years with increased farmer inputs. New Zealand and Chilean plums are available from January
through February, making them a festival/holiday gift item for the flourishing Chinese New Year market.
Production, Supply and Demand Data Statistics :
2004-2007 China Peach Acreage and Production by Province
China Peach Production (1000 Ha and MT) by Province 2004-2007
Province 2004 2005 2006 2007
1000 ha MT 1000 MT 1000 ha MT 1000 ha MT
Shandong 125.3 1,828,331 126.6 2,011,740 114.3 2,156,308 108.8 2,347,485
Hebei 101.6 1,223,842 99.0 1,248,910 94.0 1,316,853 94.6 1,370,654
Henan 55.4 536,342 60.2 601,029 64.4 650,108 76.0 774,759
Hubei 44.7 428,076 43.5 468,766 39.3 483,510 44.2 502,347
Liaoning 19.0 311,140 20.1 346,978 21.2 417,828 24.5 439,844
Beijing 16.8 296,409 17.4 306,210 17.9 299,783 22.7 414,913
Shaanxi 22.0 216,680 25.4 280,971 26.9 326,387 27.2 391,111
Jiangsu 32.6 326,451 32.8 318,699 31.3 349,959 30.7 389,910
Sichuan 31.9 310,240 34.2 319,039 36.5 330,331 40.9 358,781
Zhejiang 23.8 259,595 24.6 285,842 24.5 311,648 25.5 316,166
Anhui 20.4 188,630 20.6 212,186 20.1 226,789 15.8 289,864
Fujian 26.3 190,248 25.7 199,653 25.6 198,336 25.9 212,800
Shanxi 9.9 129,935 9.9 132,355 10.9 161,768 12.1 178,106
Guangxi 13.2 93,589 15.5 122,080 15.9 125,757 16.5 153,369
Gansu 13.7 74,933 14.2 102,261 14.2 139,340 13.8 142,204
Yunnan 18.0 104,939 18.2 113,385 20.6 118,974 21.5 137,245
Shanghai 10.0 95,277 7.6 102,818 7.2 113,167 7.3 108,921
Hunan 20.9 83,591 21.6 94,888 21.7 102,296 26.7 107,971
Guangdong 6.6 67,258 7.6 86,860 7.5 87,352 7.6 89,537
Xinjiang 10.8 49,390 10.6 56,877 10.1 72,038 10.6 86,137
Guizhou 12.4 58,865 15.7 65,468 16.1 70,621 16.8 80,805
Chongqing 9.3 48,719 10.0 55,554 10.4 52,649 10.8 64,665
Tianjin 4.4 49,006 4.0 48,997 4.2 52,399 4.0 48,776
Jiangxi 9.6 28,386 10.7 37,392 10.8 40,496 10.1 35,786
Ningxia 3.7 8,312 1.0 2,913 3.6 7,693 2.0 7,225
Tibet 0.1 1,259 0.2 1,412 0.1 1,148 0.2 1,249
Jilin 0.5 1,121 0.2 612 0.2 676 0.2 666
Qinghai N/A 421 N/A 412 N/A 486 N/A 479
National total 662.9 7,010,985 677.1 7,624,207 669.5 8,214,700 697.0 9,051,774
Source: China Agricultural Statistical Report
Import Tariff and VAT for Fresh Stone Fruit in 2009
HS Code Description Tariff VAT
08092000 Cherries, fresh Chile 2% 13%
New Zealand 6%
The U. S. 10%
08093000 Peaches/nectarines, fresh Chile 2% 13%
New Zealand 6%
The U.S. 10%
08094000 Plums and sloes, fresh Chile 2% 13%
New Zealand 6%
The U.S. 10%
Source: China Customs