US Ban Fails To Impede Chinese Tomato Paste Export Growth

Chinese tomato paste exports continue to thrive despite the recent US ban. Tomato products from Xinjiang were classified as 'high-risk' under the Uygur Forced Labor Prevention Act and have been restricted from entering the US. However, the region is not reliant on the US market alone and has witnessed improved sales in other markets such as the EU, Asia, Africa, and Oceania.

Xinjiang is the hub of Chinese tomato production, accounting for 80% of the country's output owing to numerous climatic and geographic advantages. It is positioned across the 34-49 north latitude and receives ample sunshine, ideal for tomato production. Most tomato products from the region are exported directly, and Xinjiang accounts for approximately 14% of the world's processed tomatoes. Recently, organizations in the province have been accused by several international bodies of utilizing forced labor in processing their tomatoes, a claim that the Chinese government denies. The ban placed by the US on the 22nd of June was expected to derail exports from Xinjiang but has had limited impact.

The US is not a significant market for Xinjiang, as the North American country is a global leader in tomato production, importing small amounts each year. The country's abundant supply of tomato products makes it unattractive as an export destination. Therefore, Xinjiang has cultivated trade relations with major markets such as the EU, Ghana, Chile, and Australia. As a result, China's tomato season had a strong finish, with shipments to over 125 countries reaching 820K tonnes, a 4% YoY increase and 4% above the three-year average. Tomato paste accounted for 96% of all tomato exports from the region this year.

Despite the US ban not having a sizeable impact on Xinjiang tomato paste exports, the forced labor allegations could affect trade with other nations. The European Commission is expected to propose a ban on selling products involving forced labor. This regulation would significantly affect exports from Xinjiang as the EU is the region's largest market. Italy alone accounted for 10% of China's processed tomato exports this past season. This ban may also cause a ripple effect in the global market, and other countries could follow suit.

If further bans are placed on tomato products from Xinjiang, it may seriously affect the sustainability of an industry that is already battling rising production costs and elevated shipping prices. Leading tomato processing firms are following the situation closely.