Stone Fruit Annual 2012

An Expert's View about Pome Fruits (such as apples or pears) and Stone Fruits (such as peaches, cherries, etc.) in Taiwan

Posted on: 10 Sep 2012

Taiwan remains an important market for U.S. stone fruit – the third largest importer of U.S. peaches/nectarines and fourth largest 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: 8/29/2012 GAIN Report Number: TW12025 Taiwan Stone Fruit Annual Fresh Peaches/Nectarines, Cherries Approved By: Jeffrey Hesse, Agricultural Section Chief, AIT Prepared By: Amy Hsueh, Agricultural Marketing Specialist, ATO Taipei Report Highlights: Taiwan remains an important market for U.S. stone fruit – the third largest importer of U.S. peaches/nectarines and fourth largest export market for U.S. cherries. Local peach/nectarine production had been expected to expand this year, but a typhoon in early August left 2012 output virtually unchanged at 29,939 metric tons. Taiwan does not produce cherries, so 100% of local demand must be met by imports. Executive Summary: In 2011, Taiwan was the number three export market for U.S. peaches/nectarines and the number four export market for U.S. cherries. Stone fruits are well received by Taiwan consumers, who like peaches, nectarines and cherries due to their attractive appearance, sweetness, juiciness and fragrance. Taiwan wholesalers and retailers like to handle stone fruits because they are profitable. 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, however, U.S. fruit exports to China via Taiwan importers are virtually unchanged from the previous year. Peaches/Nectarines: In 2011, Taiwan imported a total of 21,664 metric tons (MT) or US$38 million worth of fresh peach/nectarines. The United States continued to dominate the Taiwan peach/nectarine import market, accounting for 80% of Taiwan's total fresh peach/nectarine imports. However, Taiwan’s imports of U.S. peaches/nectarine decreased 21% by volume while total imports declined by 19% during the 2011 season. Currently, the United States supplies nearly 34% of Taiwan's total consumption. The principal competition for U.S. peaches/nectarines is from local production with 29,719 tons harvested in 2011. Cherries: Taiwan does not produce cherries, so 100% of local demand must be met by imports. Taiwan’s imports of U.S. cherries increased 46% by volume while total imports expanded by about 38% in 2011. The United States continued to supply the largest share of Taiwan’s cherry import market in 2011 with 12,058 MT or US$81 million, accounting for 58% of Taiwan's total 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, imports of peaches and nectarines from China are prohibited due to phytosanitary concerns. 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 often 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 a 20% market share. In recent years, non-store retailing has begun to expand with home shopping and TV/internet shopping accounting for approximately 5% of total fruit retail sales. This segment is expected to continue to grow. AIT Taipei Director Stanton points at Northwest Promotion for California cherries poster during supermarket promotion peaches in Taiwan retail store Fresh Peaches & Nectarines Production In 2011, Taiwan peach & nectarine production totaled 29,719 metric tons, a nearly 5% increase above 2010 output. Area planted declined to 2,375 hectares, about a 1% decrease from the previous year. For 2012, Taiwan's Council of Agriculture (COA) initially projected that domestic production of peaches and nectarines would reach 32,542 metric tons, an increase of nearly 9% from 2011. However, the COA recently adjusted downward its production estimate due to the impact of tropical storm Saola, which brought fierce winds and torrential rains to Taiwan in early August 2012. As a result, peach/nectarine production is now estimated to have declined to 29,939 metric tons for the 2011/2012 marketing year. Area harvested was estimated at 2,332 hectares, a 1% decline from 2011. The majority of peaches/nectarines are grown in the mountain areas of northern and central part of Taiwan. Nectarines (white flesh) are available in the market in May/June and peaches are harvested in July/August. AREA PLANTED - Peaches & Nectarines 3500 3000 2500 2000 1500 1000 PRODUCTION - Peaches & Nectarines 500 35000 0 30000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 25000 20000 Year 15000 Area Planted – Peaches & Nectarines Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Hectare 2,821 2,845 2,776 2,942 2,899 2,919 2,765 2,772 2,542 2,404 2,375 10000 5000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Production - Peaches & Nectarines Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MT 24267 29366 31265 29482 25468 28508 28435 29329 28838 28348 29719 M etric T on s Hect ar e Trade In 2011, Taiwan imported a total of 21,664 metric tons or nearly US$38 million worth of peaches and nectarines, a decrease from the previous year of 19% by volume and nearly 16% by value. The United States had the largest market share (80%), followed by Chile (18%), Australia (1%) and Japan (1%). Imports of U.S. peaches and nectarines declined 21%, while the other major suppliers, Chile and Japan, also posted negative growth. Imports of peaches from Japan at 200-500 metric tons per season are not a major threat to imports of U.S. peaches. Southern hemisphere supplier Chile gained some advantage with increasing supplies and lower costs of production, managing to hold its position as the second largest supplier after the United States. However, the major direct competition to imports from the U.S. comes from locally produced peaches and nectarines. For 2012/13, trade contacts predict that peach/nectarine imports will decline by around 13%, falling to 18,800 MT. The decline is mainly the result of smaller exportable supplies among the leading exporters to the Taiwan market. U.S. Market Share - Taiwan Fresh Peach & Nectarine Imports Unit: MT 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Imports 45928 38559 40263 39178 33344 37730 33875 24312 26628 21664 US Imports 39147 32731 34311 31917 27934 33342 30252 19571 21952 17258 US Market Share % 85% 85% 85% 81% 84% 88% 89% 81% 82% 80% Source: Global Trade Atlas U.S. Fresh Peach & Nectarine Exports to Taiwan Peaches Nectarines Year 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 2008 9,270 20,921 10,301 13,759 2010 9,392 21,473 12,560 15,708 2011 7,855 18,387 9,402 11,905 Source: Taiwan Customs Directorate General Taiwan: Trends in Market Share by Country Fresh Peaches & Nectarines Fresh Cherries (Sweet & Sour) Production Taiwan does not produce cherries. Consumption In recent years, Taiwan has been the number three export market for U.S. Northwest cherries and the number six export market for cherries from California. This market is particularly important for U.S. growers because they know that Taiwan consumers will pay premium prices for the largest cherries, with 9-10 row cherries preferred by local buyers. Although the bulk of fresh fruit in Taiwan is still sold in traditional wet markets, industry estimates indicate that 20-25 % of cherries are now sold in supermarkets/hypermarkets. During the summer season, these chains often conduct U.S. cherry promotions with prices set below wet market prices as a loss-leader program to attract more consumers. As a result, these modern retail stores are taking market share from the wet markets. TV/Internet home shopping and convenience stores have also experienced significant sales growth in recent years in Taiwan. Online shopping, with home delivery service, is expected to continue to expand in the coming years. U.S. cherries are one of the most popular gift pack items. Trade Taiwan’s total fresh cherry imports increased 38 % by volume and 43 % by value during the 2011 season to reach 12,058 MT or US$81 million. The United States remained the leading supplier with 57% of the market, followed by Chile (26%), Canada (9%), New Zealand (6%), and Australia (2%). U.S. cherry exports to Taiwan increased 46% by volume and 56% by value in 2011. Taiwan’s accession to the WTO in 2002 opened the market to imports from southern hemisphere suppliers -- Chile, New Zealand and Australia. As shown in the table below, U.S. market share has trended downward since that time. Taiwan has permitted the import of fresh cherries from China since 2002. However, imports from the mainland have not yet had a significant impact on the market due to quality/food safety issues and importer concerns regarding consumer acceptance of Chinese cherries. Industry sources indicate that Taiwan’s total imports of cherries will expand by 15% in 2012/13, reaching 13,860 MT. This increase in imports is due mainly to the larger harvest in the United States, which is currently the largest supplier for the Taiwan market. Taiwan: Imports of Fresh Cherries and U.S. Market Share (MT and %) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Imports 8486 11806 9881 10588 11974 10483 10127 12229 8769 12058 Imports From U.S. 6631 9672 7325 7788 7887 6974 5339 7817 4735 6921 U.S. Market Share 78% 82% 74% 74% 66% 67% 53% 64% 54% 58% Source: Global Trade Atlas Taiwan: Trends in Market Share by Country Fresh Cherries Policy General Phytosanitary Requirements Stone fruit imports are regulated by three basic Taiwan regulations: the Act Governing Food Sanitation; the Food Safety Management Regulations; and the Maximum Residue Level standards. Taiwan currently bans imports of stone fruit from some countries with pests of quarantine concern. Imports of stone fruit from the United States require a phytosanitary 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 also monitors maximum residue levels (MRLs) for around 330 chemical compounds, checking 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 import 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 Peaches & Nectarines T 0/2011 2011/2012 2012/2013 aiw 201an Market Year Begin: Market Year Begin: Market Year Begin: Jan 2010 Jan 2011 Jan 2012 USDA New USDA Official New USDA Post Official Post Official New Post Area Planted 2,404 2,404 2,450 2,375 2,370 (HA) Area Harvested 2,359 2,359 2,414 2,345 2,332 (HA) Bearing Trees 829 829 845 821 816 (1000 TREES) Non-Bearing Trees 14 14 10 8 6 (1000 TREES) Total Trees 843 843 855 830 822 (1000 TREES) Commercial Production 28,348 28,34 32,75 29,71 29,939 (MT) 8 9 9 Non-Comm. Production 0 0 0 0 0 (MT) Production 28,348 28,34 32,75 29,71 T) 29,939 (M 8 9 9 Imports 26,628 26,62 24,50 21,66 MT) 18,800 ( 8 0 4 Total Supply 54,976 54,97 57,25 51,38 48,739 (MT) 6 9 3 Fresh Dom Consumption 54,976 54,97 57,25 51,38 48,739 (MT) 6 9 3 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 54,976 54,97 57,25 51,38 48,739 (MT) 6 9 3 TS=TD 0 0 0 Comments AGR Number TW12025 Comments To Post Fresh Cherries,(Sweet&Sour) T 2010/2011 2011/2012 2012/2013 aiwan Market Year Begin: Jan Market Year Begin: Market Year Begin: 2010 Jan 2011 Jan 2012 USDA New USDA New Official New Post USDA Official Post Official Post 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. 0 0 0 0 P 0 (MT) roduction Production 0 0 0 0 0 (MT) Imports 8,769 8,769 11,50 12,05 13,86 (MT) 0 8 0 Total Supply 8,769 8,769 11,50 12,05 13,86 (MT) 0 8 0 Fresh Dom. 8,769 8,769 11,50 12,05 C 13,86 (MT) onsumption 0 8 0 Exports 0 0 0 0 0 (MT) For Processing 0 0 0 0 0 (MT) Withdrawal From 0 0 0 0 Ma 0 (MT) rket Total Distribution 12,229 0 8,600 8,769 9,500 (MT) TS=TD 0 0 0 Comments AGR Number TW12025 Comments To Post
Posted: 10 September 2012

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