Stone Fruit Annual

An Expert's View about Agriculture and Animal Husbandry in Taiwan

Posted on: 31 Oct 2011

In 2010, Taiwan remained an important market for U.S. stone fruit -- the number two export market for U.S. peaches/nectarines and the number five export market for U.S. cherries.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 9/9/2011 GAIN Report Number: TW11016 Taiwan Stone Fruit Annual Peaches, Nectarines, and Cherries Jeffrey Hesse, Agriculture Section, AIT Taipei Approved By: Prepared Amy Hsueh, Agricultural Marketing Specialist By: Report Highlights: In 2010, Taiwan remained an important market for U.S. stone fruit -- the number two export market for U.S. peaches/nectarines and the number five export market for U.S. cherries. Stone fruit (cherries, peaches/nectarines, plums/prunes, and apricots) are well received in Taiwan. Taiwan consumers like these fruit due to their attractive appearance, sweetness, juiciness and fragrance. Taiwan wholesalers and retailers like to handle these fruits because they are profitable. Executive Summary Peaches/Nectarines: The United States continued to dominate the Taiwan peach/nectarine import market, accounting for 82 percent of Taiwan?s total fresh peach/nectarine imports (26,628 metric tons [MT] or US$45 million) in 2010. U.S. peach/nectarine exports to Taiwan increased 12% by volume while world exports to Taiwan increased 10% during the 2010 season. Currently, the United States supplies nearly 40% of Taiwan?s total consumption. The direct competitors in the market were mainly local peaches/nectarines with 28,348 metric tons harvested in 2010. Cherries: Taiwan does not produce cherries, thus 100% of this fruit is imported. U.S. cherry exports to Taiwan decreased 39% by volume while world exports to Taiwan (8,769 MT) decreased 28% during the 2010 season. The United States continued to dominate the Taiwan cherry import market, accounting for 54% of Taiwan?s total cherry imports. However, the entry of major southern hemisphere suppliers, i.e. Chile, Australia, and New Zealand, has shifted some market share away from U.S. suppliers in recent years. The United States is expected to remain the largest supplier of these stone fruit varieties to the Taiwan market into the foreseeable future. Currently, China is excluded from the market for peaches/nectarines due to phytosanitary protocols. Given Taiwan?s year-round availability and wide variety of local fruit, Taiwan consumers have developed sophisticated tastes for fresh fruits, with the result that Taiwan's per capita consumption is among the highest in the world. Attractive appearance (size, color, shape) and quality image are given significant weight by Taiwan consumers. People in Taiwan commonly 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). Imported peaches and cherries are among the most popular gift items included in these packages. In Taiwan, an estimated 20-25% of fresh fruit is purchased in modern retail outlets with hypermarkets being the most popular store format. These retail chains regularly conduct U.S. fruit promotions, offering even lower prices than available in wet markets to draw consumers into their stores. Nevertheless, traditional wet markets continue to account for 50-60% of total fresh fruit sales, while fruit specialty stores have around 20% retail market share. Recently, non-store retailing has been driven by home shopping and TV/internet shopping, accounting for approximately 5% of total fruit retail sales. This segment is expected to continue to grow over the next few years. U.S. peaches/nectarines in local supermarket Air-shipped California cherries in local supermarket Fresh Peaches & Nectarines Production In 2010, Taiwan peach & nectarine production totaled 28,348 metric tons, a nearly two percent decrease from the previous year. Area planted declined to 2,404 hectares, a five percent decrease from 2009. Although no significant natural disasters were reported in the growing areas, some of the lands previously designated for planting peaches & nectarines were reallocated to growing other crops in 2010. Taiwan's Council of Agriculture (COA) estimated that the production of peaches/nectarines reached 32,807 metric tons in 2011/2012, an increase of nearly 16% from 2010. The area harvested was estimated at 2,398 hectares, up nearly 2% from 2010. No significant natural disasters were reported in Central Taiwan, which is the largest growing area, during the growing/harvest season in 2011/2012. In addition, many new trees were reported to have reached production in 2011/2012. The area planted shows a 0.5% increase in 2011/2012 since the growing area for peaches/nectarines in southern Taiwan that was seriously damaged by Typhoon Morakot in 2009 has resumed production in 2011/2012. Taiwan nectarines (white flesh) are available in the market in May/June and peaches are harvested in July/August. Area planted - Peaches & Nectarines Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Hectare 2,821 2,845 2,776 2,942 2,899 2,919 2,765 2,772 2,542 2404 Production - Peaches & Nectarines Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Tons 24267 29366 31265 29482 25468 28508 28435 29329 28838 28348 Trade In 2010, Taiwan imported a total of 26,628 metric tons or US$45 million worth of peaches and nectarines, an increase of nearly 10% in volume terms and an increase of more than 5% in value from the previous year. The United States had the largest market share (82%), followed by Chile (17%), Japan (1%), and Australia (0.1%). In 2010, imports of U.S. peaches and nectarines increased 12%. Among other major suppliers, Japan and Australia posted significantly negative growth in this category while Chile recorded a modest 0.34% increase in import volume in 2010. Japan peaches, with 200-500 metric tons per season entering Taiwan, are not a major threat to U.S. peaches. Southern hemisphere supplier Chile gained some advantage from increasing supply and lower costs of production, managing to hold its position as the second largest supplier after the United States. U.S. Peach & Nectarine Exports to Taiwan Year Peaches Nectarines Metric Tons US$1,000 Metric Tons US$1,000 2006 10,251 18,491 17,683 17,068 2007 11,929 19,945 21,413 20,719 2008 11,589 23,008 18,663 19,945 2009 9,270 20,921 10,301 13,759 2010 9,392 21,473 12,560 15,708 Source: Taiwan Directorate General of Customs Trade analysts predict that peach/nectarine imports will decline by 8%, falling to 24,500 MT in 2011/2012. The reduction in import sales is, in part, the result of an abundant harvest of local summer fruits (mangoes, litchis, pineapples, papaya, and peaches) during 2011. Industry sources indicated that there was no problem of oversupply of peach imports during 2011 season. Many Taiwan importers were happy with the sales of peaches imported (mostly air-freighted) mainly from the United States in 2011. Source: GTA Production, Supply and Demand Data Statistics: Fresh Peaches & Nectarines Taiwan 2009/2010 2010/2011 2011/2012 Market Year Begin: Market Year Begin: Market Year Begin: Jan 2009 Jan 2010 Jan 2011 USDA New USDA New USDA New Of ficial Post Official Post Official Post Area Planted 2,542 2,542 2,500 2,404 2,415 (HA) Area Harvested 2,483 2,483 2,438 2,359 2,398 (HA) Bearing Trees 887 887 893 829 840 (1000 TREES) Non-Bearing Trees 21 21 22 14 9 (1000 TREES) Total Trees 908 908 915 843 849 (1000 TREES) Commercial Production 28,838 28,838 31,643 28,348 32,807 (MT) Non-Comm. Production 0 0 0 0 0 (MT) Production 28,838 28,838 31,643 28,348 32,807 (MT) Imports 24,312 24,312 22,000 26,628 24,500 (MT) Total Supply 53,150 53,150 53,643 54,976 57,307 (MT) Fresh Dom. Consumption 53,150 53,150 53,643 54,976 57,307 (MT) Exports 0 0 0 0 0 (MT) For Processing 0 0 0 0 0 (MT) Withdrawal From Market 0 0 0 0 0 (MT) Total Distribution 53,150 53,150 53,643 54,976 57,307 (MT) TS=TD 0 0 0 (HA) Comments AGR Number Fresh Cherries, (Sweet&Sour) Production: Taiwan does not produce cherries, thus 100% of cherries are imported. Consumption: In recent years, Taiwan has been the number two export market for U.S. Northwest cherries and the number three export market for California cherries. This market is important for U.S. growers because they know that Taiwan consumers will pay a premium price for the largest cherries. Although the majority (over 50%) of fresh fruit in Taiwan is still sold in traditional wet markets, industry estimates indicate that 20-25% of cherries are sold in supermarkets and hypermarkets. During the summer season, these chains often conduct U.S. cherry promotions with prices below wet market prices as a loss-leader program to attract a greater number of consumers. Therefore, these modern retail stores are taking some market share from the wet markets in terms of cherry sales. TV/Internet home shopping and convenience stores have also experienced tremendous growth in sales in recent years in Taiwan. Fresh cherries are one of the few fruits that benefit significantly from these non-traditional shopping outlets. Online grocery shopping, with home delivery services, is expected to continue to expand in the coming years. Cherry gift packs are one of the most popular gift pack items in Taiwan. Cherries with 9-10 rows are preferred by Taiwan consumers. Trade: Fresh cherry imports into Taiwan decreased 28% in volume and 11% in value during the 2010 season to reach 8,769 MT worth US$56.70 million. The United States continued to be the leading supplier with 54% of the market, followed by Chile (25%), Canada (9%), New Zealand (7%), and Australia (4%). U.S. cherry exports to Taiwan decreased 39% by volume and 24% by value in 2010. As shown in the table below, the U.S. market share began a downward trend in 2002 when Taiwan joined the WTO. The entry of Southern Hemisphere suppliers, i.e. Chile, New Zealand, and Australia, has shifted some market share away from U.S. suppliers. Chile continued to be the second largest supplier despite a 9% drop in volume in 2010. Taiwan has permitted the import of fresh cherries from China since 2002. These imports have not yet made an impact on the market due to quality issues and importer concerns regarding consumer acceptance of Chinese cherries. Industry sources indicated that Taiwan cherry imports are expected to increase by an estimated 25%, reaching 11,000 MT for 2011/2012. In general, demand has remained at around 10,000 MT per year over the past 10 years. The significant reduction in imports during 2010/2011 was mainly due to the smaller harvest in the United States, currently the largest supplier to the Taiwan market, and the resulting high cost for the fruit. Other minor factors that affected imports included Taiwan?s strict MRL (maximum residue level) standards that have contributed to lower consumer confidence in imported fruits and an abundant harvest of local summer fruits. Many Taiwan fruit importers have set up branch offices in China to handle shipments entering the market through their headquarter offices in Taiwan. These Taiwan importers now import fruit not only for Taiwan but also for the China market. At present, U.S. fruit exports to China through these Taiwan importers remain flat. Source: GTA Taiwan Fresh Cherry Imports (Metric Tons) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total 9,105 10,42 8,486 11,80 9,881 10,58 11,97 10,43 10,12 12,22 8,76 Import 1 6 8 4 8 7 9 9 s US 7,405 8,397 6,631 9,672 7,325 7,788 7,887 6,974 5,339 7,817 4,73 Import 5 s US 8 74 5 4% Mkt %1 8%1 78 % 82 % % 74 % 66 % 67 % %3 6 %4 5 Share Policy: General Phytosanitary Requirements Stone fruit imports into Taiwan are subject to an inspection based on three basic Taiwan laws: the Food Safety Management Act; Food Safety Management Regulations; and Maximum Residue Level Standards. Taiwan currently bans imports of stone fruit from some countries with various pests of quarantine concern. Imports of stone fruits from the United States require a photosanitary certificate of origin issued by the office of Plant Protection & Quarantine (PPQ), Animal & Plant Health Inspection Service, USDA stating that the fruit has been inspected and found free from relevant pests. Taiwan monitors maximum residue levels (MRLs) for around 330 chemical compounds and checks shipments on a random basis. Taiwan?s Department of Health (DOH) is in the process of reviewing a backlog of MRL applications for agrochemicals that are internationally-approved and commonly used in the United States and in other producer countries but for which MRLs have not yet been established in Taiwan. The Agricultural Affairs Office at the American Institute in Taiwan, along with U.S. industry representatives, have been working with Taiwan authorities to develop a review process that will allow for the timely establishment of MRLs not only for agrochemicals on the backlog lists but also for new agrochemicals that in many cases would replace older, less effective compounds. These discussions are ongoing. The China Factor in Competition for the Taiwan Stone Fruit Market Taiwan has opened the two stone fruit categories of fresh apricots (January 2007) and fresh cherries (February 2002) to imports from China. To date, however, Taiwan has recorded no imports under either category. While importers have indicated interest in testing China?s supplies of fresh cherries, logistical difficulties and continuing quality control problems have so far prevented any sales. Cherries, with their unique position as a high volume, high value, short sales window item, represent both high risk and high profit for Taiwanese importers. As such, established suppliers in the United States and other major fruit producing countries are still preferred due to their reliability and responsiveness. The import of stone fruit from China, while still a long-term threat to U.S. market share, is not considered a factor in current market competition. Production, Supply and Demand Data Statistics: Fresh Cherries ,(Sweet&Sour) T 2009/2010 2010/2011 2011/2012 aiwan Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2009 2010 2011 USDA New USDA New USDA Official Post O New Post fficial Post Official Area Planted 0 0 0 0 0 (HA) Area Harvested 0 0 0 0 0 (HA) Bearing Trees 0 0 0 0 0 (1000 TREES) Non-Bearing Trees 0 0 0 0 0 (1000 TREES) Total Trees 0 0 0 0 0 (1000 TREES) Commercial Production 0 0 0 0 0 (MT) Non-Comm. Production 0 0 0 0 0 (MT) Production 0 0 0 0 0 (MT) Imports 12,229 0 8,600 8,769 11,0000 (MT) Total Supply 12,229 0 8,600 8,769 11,000 (MT) Fresh Dom. Consumption 12,229 0 8,600 8,769 11,0000 (MT) Exports 0 0 0 0 0 (MT) For Processing 0 0 0 0 0 (MT) Withdrawal From Market 0 0 0 0 0 (MT) Total Distribution 12,229 0 8,600 8,769 11,000 (MT) TS=TD 0 0 0 Comments AGR Number Comments To Post Import Trade Matrix Country Taiwan Commodity Fresh Cherries (Sweet & Sour) Nectarines Time Period 2009-2010 Units: MT Import for: 2009 2010 U.S. 7,817 U.S. 4,735 Others: Chile 2,415 Chile 2,210 Canada 975 Canada 829 New Zealand 730 New Zealand 630 Australia 291 Australia 365 Japan 1 Japan 0 Total for Others 4,412 4,034 Others not Listed 0 0 Grand Total 12,229 8,769
Posted: 31 October 2011

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