The cherry season is currently in full swing in the northwest of the USA. The Chinese market price of these cherries remains high. In some larger supermarkets the retail price is around 300-400 yuan [44-59 USD] per kg.
There are several reasons for this situation. First, poor weather conditions caused the production volume to decline and the supply season to start 10 days late. That pushed the price up. Second, the 4th of July is a holiday in the USA, which stimulates domestic demand and pushes the export price up. In addition, the ongoing pandemic has raised production costs and the US dollar is rather strong, which further raises the export price.
After the 4th of July passed, local demand declined and the supply volume for the export market increased. That lowered the cost of export. The next two weeks are crucial for the price development this season. Victor Wang of Northwest Cherry Growers talked about current conditions in the Chinese market for US cherries.
Apart from Canada, China has been the main export market for US cherries for the longest time. In 2017, the export volume of cherries from the American northwest to the Chinese market even exceeded the export volume to the Canadian market. China truly became the overseas sales king for northwest cherry growers. Even during the difficulties in 2021, the export volume to the Chinese market continued to grow. The export volume exceeded 1 million boxes (of 10kg each).
According to Victor Wang: "It is too early to tell whether China can maintain its leading position. We expect the import volume to come down in 2022. If we can import around 60%-70% of last year's import volume, then that is already a major achievement."
There are many reasons for the current situation. "First, many small and medium-sized import companies suffer financial loss because of the pandemic. Even e-commerce and real estate industries, where income is usually high, have had to cut their staff. This means that fewer consumers are able to afford luxury products like northwestern US cherries, especially now that the price is so high. Market adaptability is really put to the test right now. As for operations, the price of international distribution is soaring, and even domestic distribution costs more than 50% more than before the pandemic. In addition, preventative measures require all import products to undergo disinfection, which has a negative impact on the product quality of fruit," said Victor Wang.
Important first-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and wealthy second-tier cities, are the driving force behind fruit consumption in China. The east of China used to import via Shanghai, which made Shanghai the main importer of US cherries. The recent lockdown of Shanghai, however, had a serious impact on the movement of traders and other relevant personnel. Some importers then switched to Guangzhou.
Shanghai only imported about 50% of the import volume in Guangzhou in the last week of June. Now that the lockdown in Shanghai is coming to an end, the situation is gradually returning to normal. As for the impact of disinfection procedures, the import volume of fruit is much smaller in Shanghai now, so the procedures take less time in Shanghai and the fruit enters refrigerated storage more quickly. Guangzhou struggles to process a large volume of import fruit, which delays procedures. Northwestern US cherries are high in sugar and they can not stay out in the heat for too long or the product quality will suffer. Every single minute in the heat puts pressure on product quality."
When asked about the conditions of chartered flights for US cherries, Victor Wang replied, "the first chartered flight on the 2nd of July has been canceled. The reason for cancelation was heavy rainfall in production areas. Some of the cherries split. Add to this the potential impact of disinfection and the high price, and the cost of a chartered flight becomes impossible to recover. Future chartered flights depend on market demand and the product quality of northwestern US cherries. The pandemic has had its impact on import fruit in the last few months. Shanghai and Beijing have felt that impact in particular. On top of that, the strong position of the US dollar and developments in domestic high-end markets add further difficulties for fruit import."
Victor Wang also added: "There are difficulties, but this only a short phase in the development of a Chinese market for northwestern US cherries. The Chinese government continuously adjust the direction of economic development and promotes favorable policies for economic recovery. The Chinese economy will recover and even more opportunities will arise. And the Chinese market will remain one of the most important export markets for northwestern US cherries."
Northwest Cherry Growers works together with a number of strategic partners to promote cherry sales in the Chinese market, including large supermarket chains such as Sam's Club, Walmart, Vanguard, Ole, Guashu, and Xianfeng. At the same time, Northwest Cherry Growers also announces promotional activities via the Chinese government websites of Guangzhou, Hangzhou, Changsha, and Chengdu. They even invited the world champion in aerobics, Ms. Huang Jinxuan, to participate in an official media event for the promotion of Northwest Cherry Growers. In addition, the US consul general in Guangzhou and the agricultural consul both joined promotional activities in Guangzhou. This event also included famous sports and fashion bloggers. Together they prepared the summer for cherries from the American northwest.
As the price of northwestern US cherries is coming down and the promotional season is gaining momentum, the sales figures will reach a small peak.
For more information:
Northwest Cherry Growers
English website: www.nwcherries.com
Chinese website: www.nwcherries.cn