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2019 Agricultural Political Trade War 03 Taiwan pineapple exports more than 90% dependent on China, sales triple jump is a blessing or a disaster?

Published: 2024-11-21 Author: mysheen

Last Updated: 2024/11/21, 2019 Agricultural Political Trade War 03 Taiwan pineapple exports more than 90% dependent on China, sales triple jump is a blessing or a disaster?

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/ Jiao Jun (author of Fruit Politics)

The melting ice between the two sides of the "Lianhu meeting" in 2005 created an upsurge in fruit sales in Taiwan, and the ups and downs of political procurement had many effects on Taiwan's agriculture. How will Taiwan respond to the resumption of China's agricultural political and trade war against Taiwan in 2019? "upstream and downstream" invites experts to analyze, the special topic will continue to be published, read the series of articles, please click here.

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Pineapple exports to China boomed, tripling in 2014

Pineapples earned a lot of foreign exchange for Taiwan in the last century, and Taiwanese people over the age of 50 also ate canned Taiwan Phoenix pineapples. Even at the beginning of the economy of Chinese mainland's second-tier cities more than a decade ago, canned pineapples in Taiwan once again became a red-hot companion gift. However, exports of fresh pineapples began to jump in 2012, especially in the Chinese market, which nearly tripled in 2014. Will the prosperity of pineapples in the Chinese market continue? Is there still the pull of political procurement behind it? How to further disperse the market risk of Taiwan pineapple export? The following is our in-depth analysis.

In terms of trend, pineapple exports increased significantly between 2014 and 2016, with 9,000 metric tons in 2014, rising rapidly to a peak of 29,000 metric tons two years later, and reaching an all-time high of nearly 32,000 metric tons in 2018. However, this is not a lucky figure, because the proportion of exports of the whole market exceeds that of Chengdu in the Chinese market, which is a very abnormal phenomenon. (see table below)

Pineapples exported to Japan have stagnated in the past five years, and the Chinese market has outperformed others.

Compared with Japan, which was an important pineapple exporter to Taiwan in the past, pineapple exports to Japan have almost stagnated in the past five years (see chart below), and the dominance of the Chinese market has become more and more obvious, making people worry that the work of risk diversification in the whole market is almost ineffective. And behind this growth figure, policy procurement has basically been withdrawn, and now most of them are Chinese fruit traders or dealers who purchase and export directly from the pineapple production and marketing cooperatives of farmers in Taiwan.

In other words, pineapples sold to China have their own style, which is basically different from those exported to Japan in terms of ideas and modes of operation; the former wins by quantity, while the latter still has to take good care of product quality in order to maintain the stability of the order.

The area of pineapple increased by 26% in 6 years, and the variety of "Tainong 17 Golden Diamond" was planted centrally.

In addition, the acreage of pineapple in Taiwan has obviously shown an upward trend with the explosive increase in exports in 2014. In 2011, the acreage of pineapple was 9029 hectares at the bottom of the valley, and by 2017 it has reached 11452 hectares, an increase of more than 26%. It's really amazing. (see the table below) in the south-central region, pineapples used to be planted only in areas with good drainage on hillsides, but now they only need to lease land from the Taiwan Sugar Company to grow pineapples.

Lack of "origin traceability mechanism" is easy to mix fish eyes with pearls.

The expanded cultivation of pineapple is concentrated on the variety "Tainong 17 Golden Diamond", mainly because this variety is popular in the Chinese market. However, according to the author's past experience, most of the golden diamond pineapples sold to the Chinese market, especially under the name of "made in Pingtung," do not necessarily come from Pingtung, but more from Chiayi and Tainan. In the absence of a "origin tracing mechanism" for export traders on this side of Taiwan, more golden diamond pineapples in Pingtung, Taiwan, are sold at Xiamen and Shanghai ports through mini three links and big three links.

Taiwan's pineapple exports depend on China for more than 90%. Is the risk too high?

The figures have told us the fact that the "only export market" for Taiwan's pineapple is China. Those familiar with the international situation also know that the export growth that began in 2013 and 2014 came from the dispute between China and the Philippines over Huangyan Island in the South China Sea at that time, when China technically banned the import of Philippine pineapples into China. Taiwan's golden diamond pineapple has found an "export".

The question is, are farmers satisfied with the output value of such a pineapple export? The Chinese market accounts for more than 90%. Is such an "abnormal" export result conducive to the development environment of Taiwan's pineapple industry, or is it harmful to the long-term survival of Taiwan's pineapple farmers?

Since the main origin of export pineapples is in Pingtung, the government has made great efforts to provide guidance to local farmers' producers' cooperatives in order to stabilize the quality and quantity of pineapple exports, and this has indeed achieved certain results. however, the ultimate question is whether importers in the Chinese market on the import side are willing to "operate" Taiwan's golden diamond pineapple market for a long time. Or will the cheap MD2 variety of pineapple from the Philippines return to the Chinese market?

Photography / Cai Jiashan

It is rumored in the market that the poor quality control of Taiwan pineapple will affect the prospect.

In the face of market uncertainty, the only thing Taiwan, as an exporter, can do is to "enhance the added value of its products," that is, through higher standardization, the export output value of Taiwan's pineapple can be further raised, in order to separate the low-price competition of large-scale cultivation by multinational corporations. The competitive advantage of Taiwan pineapple is its flavor and taste, but the disadvantage is that its quality control is greatly affected by weather. Compared with multinational varieties, this is both an advantage and a disadvantage: because pineapples with sweeter taste have a shorter shelf life, and in recent years, climate anomalies have led to high water content of pineapples (the so-called "meat pineapple"), which is also disadvantageous to the quality consistency of exports.

In recent years, it has been reported that the quality control of Taiwan pineapples, which have been exported to the Chinese market, is getting worse and worse (most of them are meat pineapples). Even Japanese experts who went to China to inspect the export of Taiwan pineapples sighed that if Taiwan exporters did not take good control of their quality, the export of Taiwan pineapples will be good in less than a few years.

Taiwan pineapple should establish a more complete export industry chain

From the positive interpretation of the figures, Taiwan's golden diamond pineapple has indeed gained a firm foothold in the Chinese market, but the next thing we must pay attention to is to avoid "chaos", especially when the climate is abnormal and the output is unstable: it often happens in recent years. When there is overproduction, price competition will be cut, and underproduction will in turn drive up prices. This was also the fate of Taiwan's export of fresh agricultural products in the past. They did not have a clear understanding of the foreign market, and they did not understand that they were pursued by competitors in the international market. They often gave up the hard work in a few years.

The agricultural administration unit plans to set up a set of fully automatic special equipment for cleaning, grading and packaging in Pingtung, the main producing area of pineapple, which is definitely a positive message to enhance the added value of pineapple export. It's just that how to get more farmers involved in this kind of work, not just the task of the Taiwan Agricultural Development Company, depends on the more patience and communication of government departments, so that the establishment of the pineapple export industry chain can be accomplished in one battle.

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Very cool article!