As I write this column, I am in the middle of a tour of the citrus industry of China. According to data from the Food and Agricultural Organization (FAO), China is the second largest citrus producing country in the world. With a reported production area of more than five million acres, it has, by far, the largest land area planted to citrus in the world. My trip is part of a project funded by the Florida Citrus Commission to develop an economic assessment of both the supply of and demand for citrus products in China. With a population of approximately 1.4 billion, China represents a potentially large market for citrus products as personal income grows. Our task is to assess the potential of China as a possible competitor in export markets, especially orange juice and pummelos, which could compete with Florida grapefruit. We also are charged with examination of market potential in China with focus on orange juice and grapefruit.
When It Counts
According to the Foreign Agricultural Service (FAS) of the USDA, China presently produces about 150 million boxes of sweet oranges — most of which are navels, 325 million boxes of various mandarin varieties, 62 million boxes of pummelos and grapefruit (although pummelo accounts for almost all of that figure). Nearly all of this production is consumed in the domestic market. China is the largest supplier of canned mandarin sections to the world market. It also is an exporter of pummelos and navel oranges, but nearly all of these exports go to other Asian countries such as Indonesia and Malaysia. Recently, Chinese pummelos have been found in European markets. China is a net importer of orange juice. FAS data is that the equivalent of 83.5 million single-strength equivalent gallons was imported in 2009-2010. Nearly all of this is FCOJ and comes from Brazil, although we did see Florida NFC orange juice in a shop located near the U.S. Embassy in Beijing.
Growth Spurts
While we are in the preliminary stages of the Chinese citrus study, it is clear Chinese citrus production is growing although it is not clear the rate of that growth. We have heard on multiple occasions the Chinese industry is focused on the domestic market, especially the domestic fresh market. This is especially true for sweet oranges where it appears the processing sector primarily receives eliminations. Productivity is quite low. If there are five million acres of planted citrus and aggregate production is approximately 560 million boxes across all varieties, that means the average yields are a little more than 100 boxes per acre. The industry is highly fragmented, with most production coming from very small farms spread across several provinces ranging from Guangdong in the southeast to Chongqing and Sichuan in the southwest a distance of more than 1,000 miles. HLB is an issue, but it is confined to the coastal provinces located in Eastern China. Citrus canker is another problematic disease and it can be found in most of the production areas.
On the demand side, orange juice consumption is growing, although most consumption is less than 100% juice. Ten percent juice products are widespread. Although China has witnessed out-migration from the rural areas to cities, nearly three quarters of the population still resides in small towns and villages.
We still have much to learn about China and Chinese citrus. The FCC funded study should be completed in 2012.
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China's Citrus Syndrome
Thomas H. Spreen is a professor emeritus in the Food and Resource Economics Department at the University of Florida in Gainesville. See all author stories here.
August 16, 2011 