Opinion

Cambodian mango goes to China

Fresh Mango
Cambodia
China
Supply Chain Management
On March 10, 2021, respective authorities from China’s General Administration Customs (GACC) virtually inspected three mango farms and four treatment facilities as part of the free trade agreement signed in October 2020 between China and Cambodia. Cambodian mango producers would soon be given access to the biggest mango market which would place upward pressure on currently slumped domestic mango prices.

On March 10, 2021, respective authorities from China’s General Administration Customs (GACC) virtually inspected three mango farms and four treatment facilities nominated among thirty farms and four facilities in Cambodia for sanitary and phytosanitary reasons. This inspection is part of the successful free trade agreement signed in October 2020 between China and Cambodia, enabling Cambodia to export 500k MT of fresh mangoes to China annually without trade barriers. The Cambodian mango farmers were thrilled with this news as China is the biggest importer of mangoes, domestically consuming about 8M MTs of mangoes per year. However, aside from the test shipments sent as part of the phytosanitary assessment process, no Cambodian mangoes have entered China until today, delayed by a month/s from the initial timeline of January or February 2021. The delay is mainly due to transitions needed in Cambodia to meet China’s stringent import requirements related to human health protection and food safety standards. Nonetheless, after the virtual inspection, Chinese delegates spoke highly of Cambodian mangoes and are said to be expediting the approval process.

*In this article, data for fresh or dried guavas, mangoes, and mangosteen, with HS code 080450, will interchangeably be used as data for mangoes.

Cambodia mango market situation

The production of mangoes, guavas, and mangosteens in Cambodia has been increasing at an average rate of 3% during 2016-2019. In 2019, Cambodia produced 72.53k MT and also imported 167 MT of mangoes. However, Cambodia is relatively a minor player in the world mango export market, with its production level at 39th among other mango producing countries. From its total production of mangoes, only 8% or 6138 MT was exported in 2019. Most of the exports were absorbed by Vietnam, Thailand, and Singapore, and Vietnam alone absorbed ⅓ of total Cambodia mango exports. Due to its meager presence in the export market and increasing production, the domestic market suffered from the excess supply, pushing down prices to USD 0.17/kg for exportable mangoes in mid-February 2021. On top of the limited market access, high shipping fees and container shortages due to Covid-19 further restrained the finances of Cambodian mango producers. For this reason, expanding trade access to the largest mango importer would be a welcoming gateway to maintain the increasing trend of Cambodia mangoes, guavas, and mangosteens export values.

Source: ITC Trade Map, Tridge

How the FTA could help

Followed by a significant spike in Cambodia’s export of mangoes, guavas, and mangosteens to China in 2017, the export value has been plummeting, reaching zero by 2020. The free trade agreement is expected to substantially push this value up benching on China’s paramount mango import value of USD 822 million in 2019. Moreover, China’s local mango production has been declining, leaving more room for imports. As of 2019, the majority of mangoes imported by China have been from Thailand, constituting 90.8% of total imports, followed by Indonesia (6%), and Taiwan (1.5%).

Source: ITC Trade Map, Tridge

With sustained bilateral efforts from Cambodia and China, Cambodian mango producers would soon be given access to the biggest mango market which would place upward pressure on currently slumped domestic mango prices. Unfortunately, small-scale farmers in Cambodia will not be able to benefit much as big processors usually source from large-scale farmers, restraining small-scaled farmers to domestic markets. Finishing off with a successful trade agreement with China, the Cambodian government is looking to further expand its export markets to Korea and Japan.

Sources

By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes. To learn more about our cookies, please read our Privacy Policy.