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Executive Summary

By Virginia Morris,2014-03-16 18:24
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16 Feb 2007All references in the text of this report will use calendar year instead ofMarket intelligence collected from Post's field visits to

    USDA Foreign Agricultural Service

     GAIN Report

     Global Agriculture Information Network Template Version 2.09

    Voluntary Report - public distribution

    Date: 2/16/2007

    GAIN Report Number: CH7010

    China, Peoples Republic of

    Strawberries

    Annual

    2007

Approved by:

    Maurice House

    U.S. Embassy Beijing

    Prepared by:

    Mark Petry, Zhang Lei & Li Xueqing

Report Highlights:

    China’s fresh strawberry production is forecast to increase 35 percent to a record 1.0 million metric tons (MMT) in 2007 thanks to a rebound in planted acres. Frozen strawberry production is forecast to increase five percent in 2007, to 89,300 tons, due to increasing

    domestic demand. Exports of frozen strawberries are expected to decrease to 68,000 tons

    due to the European Union anti-dumping duty applied to frozen strawberries from China

    since October 19, 2006.

    Includes PSD Changes: No Includes Trade Matrix: No Unscheduled Report Beijing [CH1] [CH]

GAIN Report - CH7010 Page 2 of 10

    Table of Contents

    Executive Summary .................................................................................................3 Production ...............................................................................................................3 Consumption ...........................................................................................................5 Trade .......................................................................................................................5 Marketing ................................................................................................................7 Statistics Tables ......................................................................................................8

    UNCLASSIFIED USDA Foreign Agricultural Service

GAIN Report - CH7010 Page 3 of 10

Executive Summary

China’s fresh strawberry production is forecast at a record 1.0 million metric tons (MMT) in

    2007 thanks to expanding acreage. Frozen strawberry production is forecast to increase five percent in 2007, to 89,300 tons, driven by increasing domestic demand. Exports of frozen strawberries are expected to decrease to 68,000 tons due to the European Union 34.2 percent anti-dumping duty applied against frozen strawberries from China since October 19, 2006. This reduction in access to China’s largest export market means increased competition from Chinese frozen strawberries in other markets, such as Japan.

Production

After declining in 2006, China’s fresh strawberry production is forecast at a record 1.0 million

    metric tons in 2007. This represents a 35 percent jump from the previous year. The forecast is based on industry expectations of expanding acreage in response to good returns in 2006 and a return to normal yields. Strawberry acreage is expected to increase 25 percent in 2007 to 70,800 hectares. More inputs (labor, fertilizer, and irrigation) from the strawberry farmers are also expected to increase the yield. (Note: In the GAIN Production, Supply, and Distribution tables the indicator year 2006 (column) for strawberries corresponds to the marketing year beginning January 2007. All references in the text of this report will use calendar year instead of indicator year to avoid confusion.)

    Average strawberry prices increased about 35 percent in 2006 due to a production shortfall caused by weather problems (Please refer to GAIN CH5083 for more information about

    production decline in 2006). Prices for strawberries from open fields for processing experienced a larger price increase than greenhouse strawberries. In Donggang, Liaoning Province, one of China’s largest strawberry producers, the price of processing strawberry 1tripled to ;5/kg (USD$0.29/pound) in 2006 from the average price of the previous three years. Therefore, despite the impact of unfavorable weather on yield and inefficient field management, many strawberry farmers experienced good returns in 2006.

    Strawberry Wholesale Prices in Beijing

    1.60

    1.40

    1.2020051.00

    20060.80US$/Pound

    0.602007

    0.40

    0.20

    0.00

    Jan

    Feb 2(Source: Ministry of Agriculture, China) Mar

     Apr

    May

     Jun1 An exchange rate of 7.8 Yuan per dollar is used in this report. Jul2 Fresh strawberries are not available in Chinese Market from July to October. That is why Augthe prices of these months are the same as June. Sep

    Oct

    UNCLASSIFIED USDA Foreign Agricultural Service Nov

    Dec

GAIN Report - CH7010 Page 4 of 10

    Fresh strawberries are available in Chinese markets from late November to June. Greenhouse (harvest period begins late November), plastic shed (harvest period begins March), and open field (harvest period begins May) account for 30 percent, 40 percent and 30 percent of total strawberry acreage, respectively. The industry is very interested in introducing summer varieties to fill the market gap from July to October. The major strawberry producing provinces in China are Hebei, Shandong, Liaoning and Sichuan Province.

    In China, more than 95 percent of processing strawberries come from open field production. Industry sources indicate that acreage will expand in 2007 for field strawberries because it will respond quicker to the high prices in 2006 and needs less investment than greenhouse strawberries. Looking into the next three to five years, the industry believes that greenhouse strawberry acreage will increase rapidly driven by good returns, especially around big cities with higher income. In Beijing, for example, there are about 1,000 strawberry greenhouses located in Changping District (in the Beijing suburbs). Market intelligence collected from Post’s field visits to Changping revealed that the income of one

    strawberry greenhouse (covering about 330 square meters) can reach ;30,000-40,000

    (US$3,850-5,130) and yields 2-2.5 tons. The harvest season for greenhouse strawberries is November to March in China, a time when very few fresh fruit are available in the market, especially in North China. Although apples and citrus dominate the fruit market in winter, strawberries are one of the very few other plants that bear fruit during this period. People also enjoy the fun of picking fresh strawberries in greenhouses, despite its relatively high price (about ;60/kg (US$3.5/pound) in January).

    Post forecasts frozen strawberry production at 89,300 tons in 2007, five percent higher than 2006. This is not in tandem with the 35 percent increase of fresh strawberry production because the European Union’s anti-dumping tax on frozen strawberries from China is

    expected to limit China’s frozen strawberry exports and deter processors from purchasing more berries. About 80 percent of China’s frozen strawberry production is exported and the EU was the single largest market for China’s frozen strawberries.

     Retail wet Local Regional market Wholesale Wholesale Market Markets Local Super- Final Farmers Packaging markets Consumers Processors

     Jam, Jelly, Juice Processors processor

     Frozen Exports Processors

UNCLASSIFIED USDA Foreign Agricultural Service

GAIN Report - CH7010 Page 5 of 10

Consumption

    In China, about 80 percent of total strawberry production is consumed fresh and the other 20 percent is delivered to processors. Strawberries are perishable and this limits their distribution. In China, the general thinking is that fresh strawberries should be consumed within three to five days after picking, though some distributors have the packaging and transportation conditions to extend that period. The chart above briefly describes the distribution channels for fresh strawberries.

    Frozen strawberries are made into jam, jelly, juice, or used as an ingredient for confectionary and diary products. Domestic consumption of frozen strawberries is expected to increase steadily, because strawberries are becoming more and more popular in China as an ingredient, especially in foods targeting young consumers.

Trade

    Exports: China’s frozen strawberry exports are forecast to continue declining to 68,000 metric tons in 2007. The EU placed an anti-dumping duty of 34.2 percent on frozen strawberries from China effective October 19, 2006. Only one producer from Yantai (Shandong Province) is exempt from the anti-dumping duty and one from Dandong (Liaoning Province) is subject to a tax of 12.6 percent. Please refer to PL6067 for more information on

    the EU’s anti-dumping tax on Chinese frozen strawberries.

    China exported 70,206 tons of frozen strawberries in 2006, down 29 percent from the previous year. Higher domestic prices resulting from the production decline and the EU’s anti-dumping duty are the two major reasons for the decline in exports. China’s export price

    for frozen strawberries reached 0.86US$/Kg in 2006, up 56 percent from the 0.55US$/Kg in 2005. The EU’s anti-dumping duty made China’s exports decline sharply in the last quarter of 2006.

    China's Frozen Strawberry Exports by Month

    16000

    14000Tons12000

    100002004

    80002005

    60002006

    4000

    2000

    0

    Jan

    Feb Mar

    Apr

    The EU was the largest market for China’s frozen strawberries, accounting for 44 percent of May

    China’s total frozen strawberries exports in 2005. However, the EU’s share of Chinese Junthexports fell to 35 percent in 2006, falling even further in the 4 quarter of 2006 to only 13 Julpercent of China’s total exports. Aug Sep

    Oct

    NovUNCLASSIFIED USDA Foreign Agricultural Service Dec

GAIN Report - CH7010 Page 6 of 10

    China's frozen strawberry exports by destination

    The 4th Quarter of 20052005

    25%25%34%European Union European Union

    44%JapanJapan

    United StatesU.S.

    OthersOthers15%22%19%16%

    The 4th Quarter of 20062006

    13%

    32%35%European Union European Union41%JapanJapan