Chinese Apple Market Part 4

Chinese Apple Market Part 4. I’m Greg Martin with today’s Fruit Grower Report.

Today we wrap up our conversation with Washington Apple Commission’s Todd Fryhover who recently did a fascinating presentation to a group of tree fruit growers on how the Chinese apple market is affecting U.S. growers. He talks about the access to the Chinese market.

FRYHOVER: Gala and Granny Smith are increasing every year in popularity. Gala is just going through the roof and the Granny Smith numbers are actually increasing as well. If you add up Hong Kong and China and compare it to our exports it’s number 4 on our list. It’s going to surpass Taiwan as our number 3 market, maybe as early as this year.

He says there are barriers to trade.

FRYHOVER: And we talked about the gray market channel, the fruit moves to the consumer. The consumers want this product and there are ways to make this happen. The cost of that channel is approximately $10 a carton. So if you could imagine if we sell a box of fruit here for $20, it’s $27 to get it to Hong Kong, it’s $10 to move it through that channel. There has to be at least a 50% markup in that process as well so this is a very expensive process and channel that our product has to go through.

Fryhover says there are other issues in the Chinese market like intellectual property rights where the Chinese are infringing on the Washington apple logo among other things and that includes labor.

FRYHOVER: This industry in China really depends on labor. Labor is very intense and and very cheap and that is going to be their downfall.

That’s today’s Fruit Grower Report. I’m Greg Martin on the Ag Information Network.