U.S. horticultural product exports for the first 6 months of fiscal year (FY) 1998 are running 2 percent or $107 million behind last year's record pace. Lower per-unit prices for tree nuts, fresh citrus, and essential oils, coupled with a strong U.S. dollar, weak Japanese economy, and the financial crisis in Southeast Asian countries (including Korea, Philippines, Singapore, Indonesia, Malaysia and Thailand), continue to hamper export growth in 1998. Exports to date to Japan, the third largest U.S. market (17 percent or $1.8 billion in FY 1997), are down 14 percent or $132 million. Essential oils (down $80 million) and fresh citrus (down $37 million) exports to Japan are the most affected. The financial crisis in other Asian countries is also adversely affecting U.S. exports. Exports to date to Southeast Asian countries combined are down $134 million. Exports to the European Union, the second largest U.S. market (21 percent or $2.2 billion in FY 1997), are down 2 percent, due to reduced tree nut sales. On the positive side, U.S. horticultural product exports to Canada, the top U.S. market (27 percent or $2.9 billion in FY 1997) and Mexico, the fifth largest market, (4 percent or $475 million in FY 1997) remain strong, up 10 ($127 million) and 16 ($36 million) percent, respectively, during the first half of FY 1998.
As a result of the lower U.S. horticultural exports to date than earlier expected, the FY 1998 horticultural export forecast has been further lowered $200 million from the February forecast to $10.6 billion. If this forecast is realized, actual horticultural product export value in 1998 will approximate 1997 sales.