China Reduces Import Tariffs of Fruits from Major Producing Countries

Fresh Grape

Published Jan 12, 2021

For the new year, China has rolled out several reductions in import tariffs of a number of fruits from major producing countries. Under this plan, from January 1, 2021, fruits including South Korean grapes, select Australian fruits, as well as Costa Rican pineapples will all witness reductions.

For the new year, China has rolled out several reductions in import tariffs of a number of fruits, even for countries such as Australia, where political tensions have ruled out imports of goods for much of 2020. Under this plan, from January 1, 2021, fruits including South Korean grapes, select Australian fruits, as well as Costa Rican pineapples will all witness reductions.

Source: China State Council Tariff Commission, Trade Map.

South Korean Shine Muscats Looking Up

In 2019, South Korea supplied USD 3.7 million worth of grapes (HS:080610) to China, with a 0.6% share in Chinese imports. Although the share is small in comparison to larger players such as Chile and Australia, more than 90% of South Korea’s exports were reported of the premium grape variety, Shine Muscat. The variety has struck a chord with Chinese consumers and has gained immense popularity despite its hefty price tag. Import value for fresh grapes between 2018 to 2019 alone grew by 177%, and from 2015 by 144%. Tariffs were previously held at 5.2%, but have been lowered to 3.9%. Given Shine Muscat’s massive popularity, as well as the reductions in tariffs, imports are expected to see positive growth throughout this year.

Australian Citruses Benefit from Import Reduction

Trade relations between Australia and China, on the other hand, were not looking rosy for 2021, as some agricultural goods, including Australian barley and wine, were placed with massive tariffs in 2020. However, Australia’s fresh fruits will remain duty-free throughout the new year, ever since the elimination was implemented on January 1, 2019. Citruses, which were at tariff rates between 3.7%-10%, will also undergo the annual reductions as per normal, to 2.4-6.7%.

Looking at Australian oranges, import tariffs have decreased from 2.4% in 2021 to 3.7% in 2020 and will become duty-free in 2023, according to the Produce Report. China is the second-largest importer of fresh or dried oranges, with Australia taking up 18.8% of China’s imports in 2019. The country also maintains one of the lowest average tariff rates compared to other countries, which average around 11%, and is expected to maintain its position as a top orange source for China. Coming out of two years of extreme drought, Australian orange production is expected to rebound, likely boosting exports, as it is forecasted at 535K MT, a 10% increase from MY 2019/20.

Costa Rican Pineapples Opportune to Expand in Chinese Market

Costa Rican pineapples are looking up within the Chinese market as well, a surprising turn as China had only begun to start sourcing from Costa Rica in 2017, and most of its pineapple imports are from neighboring Asian countries (The Philippines, Taipei, Thailand). The Costa Rican pineapple will enjoy a tariff reduction from an average of 4.8% in 2019 to 3.2% in 2021 from China, an opportunity to expand its imports further.

These import reductions are under the many products which will undergo reductions or become duty-free as China makes strides to fulfill its domestic demand and become a “dual-circulating” market, where the foreign markets enhance the domestic market.

Sources