Efforts to renew roughly $70 million in exports of California citrus to China soured after China backed away from an apparent agreement struck in November with the United States.
Trade talks between the two trading partners seemed to indicate that shipments of California citrus would resume by Christmas after several discoveries of brown rot earlier in the year shut down shipments of the fruit to China. The restriction affected only California citrus.
A delegation of U.S. Department of Agriculture officials traveled to China in November with California Citrus Mutual President Joel Nelsen to address the issue. Several other U.S. agricultural commodities were also represented in the trade talks as China apparently had issues with apples, berries and potatoes coming from the United States as well.
According to Nelsen, all that was apparently needed was for China to formally agree to the talks that took place the first week of November. For citrus, the agreement would require California citrus growers to skirt their trees, apply a foliar treatment to the trees to provide a barrier against brown rot, and for citrus packinghouses to use a post-harvest treatment prior to exporting citrus to China.
“As long as China was happy, we were happy,” Nelsen said. “China is a significant market for the citrus industry.”
Rather than receiving a formal agreement by Christmas, Nelsen was informed by the USDA that China is demanding a full review of potassium phosphite, which was slated to be used as a post-harvest material, before China would accept shipments of California citrus. It is unclear how long that formal review process will take, much less when shipments of California citrus to China can resume.
“This was never part of the deal,” Nelsen said.
“We sent all our information to China ahead of the meetings and were told it shouldn’t be a problem,” Nelsen continued. “That’s why we were feeling optimistic after our talks.”
According to CCM Board Chairman and Orange Cove-Sanger Citrus Association General Manager Kevin Severns, China has some questions about potassium phosphite, which is considered a nutrient.
Severns said potassium phosphite has typically been applied pre-harvest and only recently is being considered for post-harvest treatment. The OCSC is working to incorporate application equipment into its packinghouse wash lines in anticipation of the Chinese decision.
News of China’s decision not only caused much displeasure with U.S. officials, who thought they had an agreement, but will impact China’s efforts to export fresh produce items into the United States, Nelsen said.
Formal protests have been filed by the USDA and members of the California citrus industry have communicated their extreme displeasure over the matter with USDA officials. According to Nelsen, U.S. Ag Secretary Tom Vilsack has made the issue part of his talking points with respect to U.S. trade with China.
According to Nelsen, both countries have been frustrated with each other over a multitude of trade decisions related to the shipment of fresh produce from one to the other. The latest decision does little to help those frustrations.
“There has been a lot of mistrust and frustration between the two governments,” Nelsen said.
Much of the U.S. concerns center on phytosanitary requirements, Nelsen said. As long as U.S. requirements can be met for the import of fresh produce, which includes safeguard against pests and disease entering the United States, Ag officials such as Nelsen see the necessity of allowing such imports to continue.
“We want access too,” he said. “So as long as they satisfy our phytosanitary requirements, what can I say?”
While the 3.5 million cartons of fresh citrus earmarked for China could have brought about $70 million to California citrus growers, that fruit will likely be parceled to other export markets and sold domestically at a much lower price than it will command in international markets.
China’s moratorium on citrus shipments came in May after the Chinese government informed the USDA that several shipments of citrus were intercepted with brown rot.
“We didn’t know at the time if it was a full container, which is 800 cartons, or one carton within a container,” said Nelsen.
Shortly after the May announcement China agreed to ship fruit samples back to the United States for confirmation of brown rot. Tests conducted at the University of California, Riverside confirmed brown rot in the fruit.
“Something within the system broke down,” Nelsen said. “We don’t know what, but we’re not talking about a lot of fruit.”
After the confirmation was made by UC Riverside the university was asked to provide technical papers on how brown rot could happen and to assist the industry in addressing the issue.
Nelsen said the Chinese delegation seemed pleased at the time with U.S. efforts to address brown rot and with the cooperation of university officials on the matter. While trade industry advocates were not allowed in the discussions between USDA officials and the Chinese government, they did allow the university researcher to be part of the discussions, Nelsen said.
Meanwhile, Nelsen said shipments of California citrus can continue to go to Hong Kong, but they won’t be anywhere near the 3.5 million cartons that were once slated to go to mainland China.
“It is disappointing to have this very safe material used as a justification to further slow the process,” Severns said. “China is a very important market to us and while we are still exporting to Hong Kong and other parts of Southeast Asia, our industry is missing out on a significant part of our normal export trade.”