The apple remains the most popular imported fruit in Taiwan, with total imports of 149,017 metric tons or nearly US$163 million in MY 2010/11. The Fuji is the favorite variety, accounting for 90 percent of total retail apple sales.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: TW11016
Fresh Deciduous Fruit Annual
Jeffrey Hesse, Chief, Agriculture Section
Amy Chang-Chien Hsueh, Agricultural Marketing Specialist
The apple remains the most popular imported fruit in Taiwan, with total imports of 149,017 metric tons
or nearly US$163 million in MY 2010/11. The Fuji is the favorite variety, accounting for 90 percent of
total retail apple sales. Taiwan continues to be a very good market for U.S. apples, but aggressive
pricing allowed Chile to overtake the United States as the largest supplier for the first time in MY
2010/11. Local apple production continues to follow a long-term decline and currently meets only
about one percent of domestic demand.
Characteristics of the Taiwan Fruit Market
? Among the world's highest per capita consumption of fresh fruit -- 127 kg/person
? Imports as a percentage of total domestic fruit consumption -- 21% by value/10% by volume
? Taiwan consumer preference for fruit: "the sweeter, the better"
Taiwan Apple Production
In MY 2010-11, local apple production fell to 2,186 metric tons (MT), a 40 percent drop from the
previous year, reflecting a continuing downward trend since Taiwan's accession to the WTO in 2002.
Local apple production is no longer profitable due to high labor and transportation costs and competition
from imports. In addition, increasing eco-awareness in Taiwan has hindered further exploitation of the
mountain areas where Taiwan apples are grown.
Taiwan Apple Imports
In MY 2010-11, Taiwan imported 149,017 MT of apples, of which 49,273 MT were from the United
States. Aggressive pricing, however, allowed Chile to overtake the United States to become Taiwan's
largest supplier for the first time. Chile exported a record 56,979 MT of fresh apples to Taiwan in MY
2010-11, but the oversupply caused heavy competition and resulted in financial losses for importers. As
a result, importers are now more cautious when placing orders, and total imports are expected to decline
moderately to about 140,000 MT in MY2011-12.
Even prior to Taiwan's accession to the World Trade Organization (WTO) in 2002, local apple production,
grown in orchards set in Taiwan's temperate central mountain range, was insignificant -- less than 10,000
MT per year. Since Taiwan's WTO accession and market liberalization, cropland has been steadily taken
out of production. In MY 2010/11, the area planted declined by 47 percent to 231 hectares and only
2,186 MT of fresh apples were harvested, a 40 percent drop from the previous year.
Other factors have also contributed to the decline in production. Taiwan's geographical location situation
leaves agricultural producers vulnerable to natural disasters. Tropical storms, such as Typhoon Mindulle
in 2004 and Typhoon Morakot in 2009, have brought severe flooding and mudslides that seriously
harmed Taiwan's natural environment. Given Taiwan's increasing eco-environment awareness, Taiwan
authorities have taken action to address the increasingly serious problem of over-exploitation of hilly
lands. To prevent the further degradation or destruction of national lands, the ?Land Restoration Strategic
Program and Action Plan? was promulgated in 2005. In accordance with this policy, Taiwan's Council of
Agriculture has been withdrawing those leased lands located in mountainous areas higher than 1,500
meters in central Taiwan, which encompasses some of the major apple production areas.
Given all of these factors, planted area is projected to drop to 175 hectares with production of 1,570 MT
in MY 2011-12. Local apple production currently meets only about one percent of domestic demand,
making the impact of annual crop yield fluctuations insignificant.
The following tables show the downward trend in both area planted and production since 2000:
Source: Taiwan Council of Agriculture
Taiwan Apple Production
5835 5930 5953
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Taiwan Council of Agriculture
Taiwan is a relatively mature market for fresh apples. In My 2010-11, Taiwan imported a total of 149,017 metric
tons or nearly US$163 million of apples -- an increase of 17 percent by volume and 16 percent by value. In MY
2010/11, Chile, for the first time ever, became the largest supplier with 38 percent of the Taiwan import market,
overtaking the United States with 33 percent share and followed by New Zealand (13%), Japan (11%), and South
Chile posted a 72 percent increase in volume, with shipments growing from 33,041 MT in MY 2009/10 to 56,979
MT in MY 2010/11. According to importers, during the past season, Chile opened its door to all importers -- not
just those who previously held exclusive trading rights. The resulting excessive volume of shipments caused
importers to suffer financial losses and generated trade disputes between Taiwan importers and Chilean exporters.
Taiwan importers are now being more cautious about placing new orders. As a result, total apple imports are
forecast to decline by about six percent to 140,000 MT in MY 2011/12.
Although U.S. market share declined in MY 2010/11, imports from the United States actually increased by seven
percent to 49,273 MT. Exports from the state of Washington state typically account for 90-95 percent of total U.S.
apple exports to Taiwan. Exports from South Korea and Japan decreased by 35 and 27 percent, respectively, in MY
2010/11. During the course of the season, six shipments of South Korean apples were rejected due to unacceptable
pesticide residue levels, disrupting Korea trade with Taiwan. The disastrous earthquake and tsunami that led to
radiation leaks from nuclear power plants in March 2011 reduced Taiwan consumers' confidence in the
safety of food products from Japan, leading to smaller imports of Japanese apples.
M e tr ic To n s
Taiwan Apple Imports, by Country of Origin
Marketing Year (July-June) 2000-2010
US Chile Japan New Zealand Korea
Source: Global Trade Atlas
As shown in th6e table0 below%, the U.S. share of the Taiwan import market for apples began a long-term downward
trend in 2000. Taiwan's 2002 WTO accession accelerated this trend by eliminating quota restrictions on imports
from Chile, New Zealand, Australia, Japan, South Africa, Argentina, and European Union and removed a
previous ban on apple imports from South Korea. China remains prohibited from exporting fresh apples to
Taiwan for phytosanitary reasons. Despite last year's reversal, the United States is expected to remain the
dominant supplier in the coming years with an expected total market share in the range of 35-40 percent.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Global Trade Atlas
With the Taiwan fresh apple consumption ?pie? likely to remain at about the same size for the near several
years and the market now open to all major producers (with the important exception of China due to
phytosanitary concerns), importers now have a broad choice of suppliers from which to choose. Changes
in market share will, of course, continue to shift from year to year based on supplier prices, product
quality and availability.
In general, while Taiwan buyers do express a continued preference for U.S.-origin Fuji apples, Taiwan
importers have shown themselves more than willing to shift purchase orders to other competing supplier
countries when cost factors run against U.S. exporters. A recent significant change in thinking among
Taiwan importers is that they do not want to risk placing a large volume of forward orders for apples
from one single supplier or country, especially when exports could be suspended due to detection of
codling moth/peach moth or violations of Taiwan's MRLs (maximum residue limits) for agrochemicals
(see Import Regulations and Requirements section.) Taiwan importers need the flexibility to switch
their orders to other countries if the primary supplying country is suddenly suspended. As a result,
prices will increase as many larger U.S. companies will be less eager to offer aggressive pricing on
smaller, multiple orders.
At the consumer level, Japanese apples are currently receiving positive reviews (generally good taste,
relatively small size, excellent appearance, and competitive price) despite the recent food safety concerns.
Importers also indicate that Korean Fuji apples, with already improved color/brix level and competitive
prices, will become a strong competitor for U.S. apples in the near future.
Taiwan currently applies a 20 percent tariff on all apple imports compared to the 50 percent tariff applied
prior to Taiwan's WTO accession in January 2002. Taiwan Customs assesses tariffs based on a region-
specific reference price rather than the actual invoiced value.
The apple is currently the most heavily consumed imported fruit in Taiwan. Only oranges, 95 percent of
which are grown domestically, are consumed in greater volume. However, in terms of real growth, the
apple is losing ground to a host of other imported fruits, including grapes, cherries, peaches, and berries.
Due to the variety of imported and domestic fruits now available, apple consumption is not expected to
reach the highs seen in the late 1990s without some change in the competitive picture, such as new
positive findings regarding the health benefits of apples or an expansion of fruit consumption in general.
The vast majority of people in Taiwan view fruit as an important part of their daily diet. Fruit is
frequently eaten as a snack or as a dessert and is the most common food prepared to serve to visitors in
the home or office.
The apple symbolizes many positive things to the Taiwan consumer. Unless bought solely for personal
consumption, the color, size, and general appearance of fruit is typically quite important to Taiwan retail
customers. The ?best-looking? fruit, typically sold in gift packaging, fetches the highest prices. The
most expensive apple on the market, the Japan-grown Fuji, sells well at premiums of 100 percent
because of its size and consumers? quality perceptions.
Fuji, with its sweet taste and firm texture, remains the overwhelmingly favorite variety, accounting for
90 percent of total retail apple sales. The remainder of the market is comprised of Gala, Red Delicious,
and Granny Smith. While countries like the United States, Chile and New Zealand continue to focus on
supplying the Taiwan market with traditional varieties, Japan is having some success in introducing less
common varieties into the market to maintain its ?premium? image and to justify higher prices. In fact,
it is not uncommon to find Japanese and Korean fruit in the market priced at US$6-8 per piece.
While eaten year round, Taiwan consumers generally purchase significantly more apples during the
autumn and winter months - the prime production months for northern hemisphere growers. Reasons
for this include the general perception of the apple as a "cool weather" fruit and the incorporation of
apples into the many festivals held during this time of the year. Local, tropical fruit such as mangos,
papaya, and lychees dominate during the summer months. Taiwan people send food products in gift
packages to their friends and relatives during three major lunar-year festivals: Chinese New Year
(usually in February); the Dragon Boat Festival (usually in June); and the Moon Festival (usually in
September). Fuji apples replaced Red Delicious many years ago as one of the most popular gift items
during the lunar New Year holiday in Taiwan.
To maintain their dominant position, particularly against "new" competitors such as Japan, Korea, and
New Zealand, U.S. suppliers should continue to work closely with Taiwan importers, distributors, and
retailers to reinforce the strong positive image that U.S. apples still enjoy in Taiwan to ensure continued
consumer loyalty for U.S.-origin apples.
Nearly all fresh fruit imports, including apples, are consumed as fresh produce. The Taiwan consumer?s
emphasis on both convenience and freshness is the key to shopping preferences. Currently,
traditional/neighborhood wet markets account for about half of all fresh apple sales, followed by small
fruit shops/street hawkers and supermarkets/hypermarkets. Due to the current slowdown in the local
economy and ongoing acquisition/mergers within the supermarket/ hypermarket sector, further
expansion of such modern retail outlets is anticipated to slow. As a result, no significant change in the
distribution channel structure is expected in the near future.
Traditional/neighborhood wet markets 50%
Small fruit shops/street hawkers 34%
Washington apples in Taiwan's supermarket Imported Fuji apples are popular gift pack
Item in the retail market
Import Regulations and Requirements
General Phytosanitary Requirements
A phytosanitary certificate of origin issued by Plant Protection & Quarantine (PPQ), Animal & Plant
Health inspection Service (APHIS) of the U.S. Department of Agriculture, stating that the fruit has been
thoroughly inspected and found free from relevant pests is required for all apple exports to Taiwan.
The Codling Moth is a pest of apples in the United States and a pest of quarantine concern to Taiwan,
where it is not known to exist. Following a Codling Moth detection in Taiwan in November 2002,
Taiwan suspended the importation of all U.S. apples. In June 2003, the United States and Taiwan
signed a protocol with a penalty structure that allowed Taiwan to suspend imports of U.S.?origin apples
if three Codling Moth detections occurred in a single shipping season (often referred to as ?three
strikes?). While this penalty structure has facilitated continued trade, there is the possibility of another
market closure if there are "three strikes? in a single shipping season. U.S. regulatory authorities have
provided Taiwan with U.S. research demonstrating that the risk associated with Codling Moth
transmission and establishment in Taiwan via U.S.?origin apples is extremely low. Taiwan authorities
continue to review this research, but have not yet met with U.S. officials to discuss the U.S. findings in
detail. Negotiations and revisions to the ?Systems approach work plan for the exportation of apples
from the United States into Taiwan? continue in the interim.
Maximum Residue Limit (MRL)
Imports of fresh fruit and vegetables, including apples, are subject to random inspection for chemical
residues at the port of entry by Taiwan?s Food and Drug Administration (TFDA)/Department of Health.
A Taiwan importer of highly perishable produce, like apples, may submit an affidavit to the TFDA to
move the consignment to its own warehouse before the testing is complete. However, the shipment
cannot be released into commercial channels until/unless the test results are negative.
Shipments are tested at the normal sampling rate of 2.5 percent. If the sample tests positive for any
prohibited chemical or at a level that exceeds Taiwan's established maximum residue level (MRL) for
approved chemicals, the shipment will be rejected and future shipments will also be subject to sanctions
in the form of enhanced inspection. If there is an initial noncompliance finding on record, future
shipments of the same product, e.g. apples, imported by the same Taiwan importer from the same
origin, e.g. the United States, the random inspection rate will increase to 20 percent. A second non-
compliance finding for the same combination of Taiwan importer, product and origin will result in
batch-by-batch inspection for all future shipments under that same three-way combination.
In an effort to more accurately identify the source of a violation and to target more carefully any
subsequent sanctions, TFDA is now encouraging Taiwan importers of fresh produce to identify the
source state. This practice is consistent with TFDA's stated goal of managing MRL risk at the source,
but it also benefits U.S. exporters by helping to narrow the scope of the sanctions. As an example,
growers/exporters of apples from Washington would not be penalized on the basis of MRL violations
on apples shipped from other states. Therefore, exporters of U.S. apples should advise their Taiwan
buyers to identify the source state, e.g. California or Washington, when filling in the application form
for import inspection.
Production, Supply and Demand Data
App les, Fresh
T 2009/2010 2010/2011 2011/2012 aiwan
Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul
2009 2010 2011
O New P
fficial O N
ew P USDost
fficial O New Post
Area Planted 436 436 410 231 175 (HA)
Area Harvested 430 436 410 231 175 (HA)
Bearing Trees 154 154 145 84 63 (1000 TREES)
Non-Bearing Trees 0 0 0 0 0 (1000 TREES)
Total Trees 154 154 145 84 63 (1000 TREES)
Commercial 3,760 3,645 4,300 2,186 1,570 (MT)
Non-Comm. 0 0 0 0 0 (MT)
Production 3,760 3,645 4,300 2,186 1,570 (MT)
Imports 127,151 127,151 135,000 149,017 140,000 (MT)
Total Supply 130,911 130,796 139,300 151,203 141,570 (MT)
Fresh Dom. 130,911 130,796 139,300 151,203 141,570 (MT)
Exports 0 0 0 0 0 (MT)
For Processing 0 0 0 0 0 (MT)
Withdrawal From 0 0 0 0 0 (MT)
Total Distribution 130,911 130,796 139,300 151,203 141,570 (MT)
TS=TD 0 0 0