Imports are expected to grow
HLB is influencing the inner Chinese citrus market
Orange production
The production of Chinese oranges is predicted to reach 6.9 MMT in MY 2014/15. Due to a sharp decline of production in Jiangxi province, the production dropped by 10% from the previous year. A devastating citrus greening disease in Ganzhou region of Jiangxi led to a 20% decrease in the production compared with last year. The provinces of Guangxi and Hunan are also expecting a smaller production following an excellent growing year 2013/14. In other producing provinces the orange production is likely to gain marginally under normal growing conditions. It is predicted that the orange acreage will slightly decrease to 780,000 hectares due to the removal of diseased trees in the major producing regions in MY 2014/15. 15% of the orange trees in Ganzhou have been destroyed. However, industry sources note that the outbreak of citrus greening may create an opportunity for the restructuring of the citrus industry by consolidating production.
Tangerines and Mandarins
In MY 2014/15 the production of tangerine and mandarin in China is predicted to increase by nearly 4% to 18.5 MMT. The production losses of greening affected provinces like Jiangxi and Guangdong will likely be offset due to improved harvests in other producing provinces. Guangdong, the largest mandarin producing province in China, is also endangered by the citrus greening. However, the tangerine and mandarin acreage is expanding in other provinces of China. In MY 2014/15 the mandarin acreage is expected to increase by 2% to 820,000 hectares.
Grapefruit and Pomelos
Pomelo production in China is forecast to increase about 5% on the previous year. Now at 3.9 MMT in MY 2014/15. The largest pomelo production region Fujian is expecting a smaller crop, but production gains in other producing provinces will offset the loss. The grapefruit production in China is limited.
Lemons
Lemon production increased 8% from the previous year and is now predicted to be 430,000 MMT in 2014/15 MY. 80% of the country's lemons comes from recovering production in Anyue of Sichuan.
Prices
Production costs are on the rise. According to official statistics, China’s citrus production costs averaged RMB 44,445 ($7,227) per hectare in 2013, an increase of more than 4% from the previous year. It is predicted that the production costs will continue to increase in MY 2014/15.
Oranges are currently sold at RMB 4.4 ($0.72) per kilogram, which is an increase of 80% on last year. High orange prices will probably remain through the year.
The prices for tangerines and mandarins are varying by location and variety. Early mature mandarins from Taizouh of Zhejiang were quoted at RMB 1.6-2.0 ($0.26-0.33) per kilo. Hubei local mandarins, which experienced a bumper harvest, were sold 16% cheaper than last year at around RMB 10 ($0.16) per kilo. “Honey” mandarins from Gaungdong are priced two or three times higher than early maturing varieties. Due to production losses from the outbreak of green disease, the prices in MY 2014/15 are expected to gain.
Farm gate prices for pomelos in Fujian were reported at RMB 3.6-4.0 ($0.59-0.65) per kilo. An increase of 15% because of the reduced production. In other regions the prices remained quite firm.
Lemon prices continue to remain high. Prices in Anyue are quoted around RMB 10 ($1.63) per Kilo.
Consumption
Fruit outlets are continuing to expand in urban areas as a result of the increased consumption of fresh fruit. The development of e-commerce has also contributed to the gain. The cost and waste during the fruit distribution process will be reduced and the expansion of sales through e-commerce will increase due to the plans of large packing houses to build regional storages and/or distribution centres. Imported fruit gained market acceptance and lemon consumption is growing.
Trade - Import
China’s fresh orange imports increased by 13% and are predicted to reach 100,000 MT in MY 2014/15. South Africa replaced the United States as the top supplier of fresh oranges. Californian citrus may boost orange imports from the U.S now the suspension has been lifted.
Mandarin imports will reach 24,000 MT in MY 2014/15. 30% more than in the previous year. Import volumes remain low, compared to other citrus varieties, but are steadily increasing. Leading suppliers are South Africa and Australia.
Grapefruit imports from China will increase by 23% to 32,000 MT. As a result imports from South Africa have increased.
Trade - Export
Orange exports are down about 17% from the previous year to 90,000 MT. Jiangxi is expected to harvest 20% fewer oranges than the previous season and farm gate prices have almost doubled. South Asia remains the largest market for Chinese oranges.
Mandarin exports will gain 3% to 770,000 MT on stable demand. Top buyers of Chinese mandarins are ASEAN and Russia.
Pomelo exports went down about 5% at 150,000 MT. Because of poor spring water, the Fuijan province, the biggest exporter of Chinese Pomelos, expects to harvest fewer pomelos. Pomelo prices have increased by 15% and Chinese pomelos are mostly shipped to EU countries.
Policy
Citrus greening continued to spread in Jiangxi and Guangdong. Local government calls for enhanced prevention and control efforts by the farmers. In August 2014 China announced the re-opening of the market to Californian citrus. The negotiation of free trade agreement between China and Australia concluded on November 17, 2014. It is expected that the agreement will be officially signed in 2015.
Marketing
Shanghai is China's second largest fruit import distribution hub. However, importers increasingly opt for Shanghai as the preferred port. The majority of imported citrus is sold through major retailers, convenience stores, fruit stalls, e-commerce, high-end hotels, and restaurants. Most five-star hotels in China prefer to use U.S. citrus. Selling fresh fruit online has continued to expand rapidly over the past 4 years.
The players of E-commerce are rapidly focusing on fresh products developed in 2014. Online fresh product sales revenues increased by nearly 41% in 2013 reaching more than $930 million.
Brand Awareness
Chinese consumers increasingly pay attention to branding according to industry sources. In addition, IPR protection for imported citrus has also improved in recent years.