The US China trade war has taken a significant toll on the American pecan industry with exports to mainland coming to a screeching halt when the first tariffs were announced. Shortly after the first tariff another set of tariffs came pushing the total tariff on US grown pecans entering China to 47%.
The US Pecan Growers Council had spent significant time and funding in the Chinese market developing the market and industry. Along with developing the pecan market in China the US Pecan growers also worked with the Chinese government on several tariff decreases ultimately getting the tariff on all pecans entering China to 7%.
China had been developed into the largest export customer for US Pecans and was also the major reason for on the farm price increases to growers, largely because Chinese buyers prefer pecans in-shell pecans and preferred to buy them directly from the pecan growers.
The trade between US growers and China ended abruptly with the onset of the trade war, as each party was concerned of continued tariff increases, and with good reason, as the trade dispute escalated quickly.
Pecan exports to China dropped to decade lows along with on the farm pecan prices. While pecan exports have continued to increase despite the loss of the industry’s largest export partner, the growth has come from other markets. Europe and North America have continued to increase consumption over the past 2 years.
Now that the trade dispute has settled to a dull roar and even now have reaching a phase one trade deal, we have seen already seen growth in the Asian markets from last year’s record lows.
Exports to Asia in the first quarter of this year’s harvest season has seen 15.78% growth over last years shipments. China, Hong Kong and Vietnam represent 83% of the shipments to Asia with South Korea coming in as the next largest export market for Asia so far this year.
While the export numbers to Asia are still dismal in comparison to pre-trade war numbers the numbers do show signs of demand in the region despite the increased cost to consumers. The phase one trade deal has many industry participants eager, as several media outlets and even Chinese government officials have expressed that tree nuts will be on the list of the $50 billion worth of agricultural purchases made by China from the US.