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Apple Situation in Selected Northern Hemisphere Countries
Apple production in selected countries of the Northern Hemisphere in 2002/03 is forecast to decrease for the second consecutive season. At 40.9 million tons, the 2002/03 Northern Hemisphere apple production forecast is 4 percent below the 2001/02 crop. The decrease mainly reflects reduced production in China and the United States, the leading world apple producers, as planted area in both countries continues to decline. In China, apple-bearing acreage is decreasing as growers replace old apple trees with newly-introduced varieties. Overproduction, stagnant domestic demand, and increased imports of lowered-price apple juice from China have put downward pressure on U.S. apple prices and have created difficult economic challenges to the national industry. This situation has contributed to the reduction in apple acreage in the United States. This trend is expected to continue.
U.S. Apple Production Expected to
Decline for the Third Consecutive Season
U.S. apple production in 2002/03 is forecast to decrease for the third consecutive season to 4.1 million tons, the smallest volume since 1988/89. Smaller apple crops are anticipated in most major U.S. producing states, including in New York (down 35 percent), Michigan (down more than 40 percent), and California (down 15 percent), due to unfavorable weather during the spring and to a reduction on bearing acreage. Apple production in Washington, on the other hand, is forecast at 2.4 million tons, up 6 percent from last season. Although apple acreage in Washington has been reduced as well, favorable weather during the spring is expected to boost the volume of the state’s apple crop in 2002/03.
The 2002/03 U.S. apple
production forecast reflects in part the difficult
economic challenges the domestic apple industry has faced.
Overproduction, stagnant domestic demand, and increased imports of
lowered-price apple juice from China have put downward pressure on U.S. apple
prices and, as such, have contributed to the reduction on apple acreage.
In 2001/02, U. S. total apple bearing acreage is estimated at 430,000
acres, compared to about 470,000 acres in 1998/99, just 4 seasons ago. The state with the most significant decrease, Michigan, has
slashed apple acreage by nearly 20 percent since 1998/99.
The Michigan apple industry, as
well as that in most U.S. states, is facing difficult economic challenges.
Last year alone, two of Michigan’s largest fruit companies filed
On July 11, a shipment of 20 tons of Washington state apples, valued at approximately $15,000, arrived in Cuba. The inaugural shipment, the first shipment of U.S. apples since 1960, followed on the heels of an agreement between APHIS and Cuba's Centro Nacional Sanidad Vegetal (CNSV) that established the phytosanitary requirements for the exportation of apples from Washington and New York. Originally, Cuba’s government-operated Empresa Cubana Importadora Alimentos (Alimport) was expected to contract for 1,000 tons of U.S. apples, but high prices reportedly prevented this from occurring.
Slowly, Apple Exports from China Continue to Expand
Apple exports from China in
2002/03 are forecast to continue to increase and reach 400,000 tons.
In recent years, China’s exports of fresh apples have increased
dramatically. For example,
China’s apple shipments in 2001/02, at 360,052 tons, are 28 percent more than
shipments in 2000/01. Southeast
Asia and Russia continue to be the largest export market for China’s apples.
Since the cost of production in China is relatively low, Chinese apple
prices are likely to be more attractive in most world markets.
It is estimated that China’s average apple prices are about 40 percent
lower than the world average price. The
low price of China’s fruits is not expected to change dramatically in the near
But China’s efforts to market fruit in overseas markets have met a great deal of difficulty. Reportedly, the inability to form grower cooperatives beyond the county level, the lack of organized market promotion programs, and phytosanitary related issues are the major obstacles China’s apple exports face. The problem regarding the creation of organize cooperatives at the state level may soon be resolved. It has been reported that China’s Ministry of Agriculture introduced this year a legislative proposal that would allow for the creation of larger-scale grower cooperatives. The aim of such cooperatives would be to find export markets and conduct promotional campaigns for China’s agricultural products. But even if large-scale cooperatives become a reality, obtaining funds for promotional purposes will remain a problem in China. Industry representatives are still not certain how that problem will be addressed.
Allows U.S. Apples from Michigan and Virginia
In April, Virginia and Michigan
reached an agreement to participate in the U.S./Mexico apple export program.
apples from Virginia and Michigan were technically allowed access to Mexico
under the existing work plan for U.S. apples, both industries needed to
negotiate with the Mexican Plant Health office (DGSV) the financial agreement to
have Mexican inspectors overseeing the exporting activities.
In September, Mexico's DGSV sent an inspector to start the Michigan apple
export program. The Mexican inspector is overseeing the activities of the
program, which includes observing the fruit treatment and verification of
shipments. This is the first season
that the Michigan industry is going to export apples to Mexico.
Mexico requires an on-sight
inspection program for U.S. apples. In
the past, Washington, Oregon, and Idaho participated in the oversight export
program. Now, APHIS is responsible
for managing and supervising the export program for these 3 states.
U.S.-Mexico Periodic Disagreements on Apple Trade Hamper U.S. Apple Sales in Mexico
Mexico is now the top destination for U.S. apple exports. Nearly 5 percent of the volume of the U.S. apple crop is exported to Mexico. However, problems and disputes have plagued apple trade between the United States and Mexico for many years (e.g., onerous oversight inspection program, antidumping case). In August 2002, Mexico’s Secretariat of Economy (SE) announced its decision to cancel the 1998 U.S./Mexico apple dumping suspension agreement. With this action, SE resumed the antidumping investigation that started in 1997 on imports of U.S. Red and Golden delicious apples. In September, SE established a final antidumping duty of nearly 47 percent. The reestablishment of the antidumping duty is expected to severely disrupt U.S. apple shipments to this vitally important market.
WTO Dispute Settlement Panel Reviewing Japan's Import
Restrictions on U.S. Apples
In May 2002, the United States formally requested the WTO’s Dispute Settlement Body to establish a panel to consider Japan's fire blight import restrictions on U.S. apples. Under the WTO dispute settlement process, the United States requested the formation of a panel to review evidence and, ultimately, issue a final report on the consistency of Japan’s restrictions with its WTO obligations.
The first substantive meetings of the WTO dispute settlement panel were held in October in Geneva. At the meetings, the United States asserted that there is no scientific evidence that mature apples transmit the fire blight disease, and that Japan has failed to assess the associated risk (i.e., presence, transmission, establishment, spread) in a manner that would justify the maintenance of their current measures. The next panel meeting in Geneva is scheduled to take place in January 2003.
The United States has been
seeking modifications to the U.S./Japan apple export program relative to fire
blight since 1994. Joint
U.S./Japanese scientific research demonstrated that mature, symptomless apples
are not carriers of fire blight. Japan
insists on a restrictive and costly work plan for fire blight that is hampering
U.S. apple sales to this country. In
MY 2001/02, U.S. apple exports to Japan totaled just 115 tons, valued at close
to $80,000. These figures contrast
with the 10,450 tons, valued at nearly $11 million, sold to Japan when the
market first opened in MY 1994/95.
(For information on production and trade, contact Samuel Rosa at 202-720-6086. For information on marketing, contact Steve Shnitzler at 202-720-8495. The FAS Attache Report search engine contains reports on deciduous fruit for more than 20 countries. Also, visit our apple web page at: http://www.fas.usda.gov/htp/horticulture/apples/html)