Significant Shifts in China’s Cherry Market Are Forecasted for the 2022/23 Season
According to the latest GAIN Stone Fruit Annual report for the Chinese market, the forecasts for the fresh cherry marketing year running from April 2022 to March 2023 are that China’s domestic production will increase by 8% YoY to 650 thousand mt. The increase is driven by expanded cherry farming areas in the northwest and southwest of the country.
The most significant shift on the production side is the fact that China’s cherry production is becoming more geographically diverse. An increase is forecasted in total output, despite a 20–30% decrease in China’s largest cherry-producing province, Shandong, due to poor weather conditions during pollination. However, Shandong's production decline was offset by the output from new planting acreage outside of traditional growing areas. According to the USDA report, cherry production in the northern regions of China has expanded to Inner Mongolia, Ningxia, Qinghai, and Xinjiang. Meanwhile, a new growing cluster has sprung up in Southwest China, centered around Sichuan province.
Another significant shift forecasted by the report is the decline in cherry imports by 6% YoY to 300 thousand mt. Rising shipping costs and pandemic-related delays throughout the supply chain have substantially reduced imported cherry supplies to China, particularly from Chile and the US.
The Chilean Cherry Committee of the Chilean Fruit Exporters Association has officially announced its plans to invest in new market opportunities other than China. The announcement comes after Chilean cherry exporters reported long container backlogs of Chilean fresh fruit at Chinese seaports last winter. Despite the high demand for the fruit in China, for the 2022/23 season, traders will face higher shipping costs, increased inspection, a disinfection process, and COVID-related testing throughout the cold chain, all of which can cause delays and consequently impact the quality of the cherries, which is a high-value and perishable fruit.
According to Tomas Nunez, Tridge’s Origination Manager in Chile, producers in Chile have accelerated production to be able to fulfill all the already agreed-upon contracts before the new year. “Unfortunately, the fulfillment of the exports will also depend on the freight availability since Chile is facing a lack of shipping spaces,” he explained. “The cherry market in Chile has begun to stabilize, with similar prices to last season. However, due to the container shortage and long port inspections in China, Chilean exporters will actively search for more adequate markets to allocate production”, he added.
The US, Australia, and New Zealand, other significant cherry suppliers to China, depend on air freight to export fresh cherries to China and are also being affected by rising transport costs. Export volumes from the US to China are also expected to fall this year owing to a smaller US cherry crop. Furthermore, US exporters continue to face an actual Chinese tariff rate of 25% for cherries, more than double any other exporting country.
Additionally, Chinese fresh cherry consumption is expected to grow by 3.5% YoY to approximately 950 thousand mt. The anticipated increases in domestic production and consumption come despite rising prices for domestic cherries in China. According to the China Fruit Marketing Association, average farm prices in June for Early Beauty cherries were up 30% YoY, while wholesale prices were up 17% YoY. Concurrent rises in both consumption levels and prices for fresh cherries show that the domestic supply in China is still insufficient to meet the demand for this high-value fruit.