With U.S. cherries 'severely' affected, Chinese importers turn to Canada
The retaliatory duties, which hit in the first wave in April followed by the second round on July 6, have meant that over recent weeks U.S. shippers have faced a 50% tariff rate going into China, which last year became the Northwest's number-one export market.
Mark Powers, president of the Northwest Horticultural Council, said the effect has been "severe", adding he understood that China is "basically closed for shipments."
Chelan Fresh general sales manager Tim Evans said that around mid-July the company had discontinued its large-air freight program to China, while Gebbers Farms CEO Cass Gebbers recently spoke of canceled orders and some 1 million boxes of fruit that needed to find new markets.
But the U.S.'s loss appears to be Canada's gain.
Julie McLachlan, general sales manager of British Columbia-based grower-shipper Jealous Fruits, said demand had clearly risen from China this season.
However, she noted that the Canadian province - with less than a tenth of the planted cherry acreage of Washington and Oregon - was "not even close" to being able to plug the entire gap.
Charley Xu, sourcing director at the imported fruit business units of Alibaba-owned companies Yiguo and Win-Chain, told Fresh Fruit Portal the U.S. cherry season had been "tough" and overall cherry sales had been lower than last year.
He explained the tariff increase has caused costs to "exceed what the market can accept" and fewer ships than last year were arriving with U.S. cherries.
"While Win-Chain still imports U.S. cherries, to solve this issue we have also added in Canadian cherries," he said.
George Liu, CEO of importer Fruta Cloud, noted that while over the summer the Chinese cherry market can now receive cherries from the U.S., Canada, Turkey, Tajikistan, Kyrgyzstan and Uzbekistan, there is a clear preference for the North American origins.
Despite the escalating trade war, Liu was upbeat about the future of trade with the U.S., noting it had gained a strong foothold in the market.
"The trade war may bring about short-term impacts, but U.S. products have created a good impression in the minds of Chinese consumers. We believe the future is still positive," he said.
"This year, we have also worked with many premium Canadian cherry suppliers to being Chinese consumers a supply that is more whole and continuous."
Fruta Cloud has been working over recent years with Canadian exporters to bring in newer varieties like Sovereign, Staccato, and Sentennial to strengthen its mid- to late-season offering, Liu said.
He added that cherries from countries with newly approved access like Turkey and Uzbekistan were of a quality that did not yet "fully fit" with Chinese consumers, and time would be needed to reach the right standard.
Good U.S. season despite challenges
While challenging, the Chinese tariff hike has not spelled disaster for the U.S. cherry season overall, with widespread reports of high fruit quality, large sizing, and a more evenly paced campaign than last year.
"We had a very strong start to the season," Powers said of the Northwest season.
"California really had a very short crop, so the pull was strong. The crop is being described as vintage - it was just an excellent eating crop. So there was strong demand domestically and elsewhere around the world."
Shipments that had been planned for China but didn't materialize would have ended up in either the domestic market or other export destinations, he said, although he noted growers would have largely missed out on price premiums by selling the largest sizes in the U.S. instead of Asia.
Keith Hu, director of international operations at Northwest Cherry Growers highlighted that although the trade war had impacted sales to China, "demand from the U.S. domestic market, Canadian, Mexican, South Korean and Taiwanese markets is strong and is able to offset sales pressure."
Evans said Chelan Fresh had had some "very good success" in the Chinese market before July 6 and was now only sending "very limited quantities" of fruit via seafreight. But he also noted that "a stellar size profile and great eating cherries" had helped to offset the challenges, with strong demand domestically.
Brianna Shales, communications manager at Stemilt Growers, said that in the U.S. it's been a "really good season for growers and retail."
"We have less volume than last year, which was a record crop, but still good volumes for promotions at retail. So the timing of the crop's been really great," she said, explaining size and quality had been the standout positives for the season.
"We had a really ideal spring that helped created separation between different harvest locations. Last year we had a big crop and everyone was harvesting on top of each other."
McLachlan also the British Columbia season was also less compressed than last year and anticipated a really strong remaining few weeks of the campaign.
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