With the world's leading almond grower now facing higher tariffs in China, competitors like Australia may stand to benefit.

As the United States' second-leading horticultural export commodity to mainland China after cherries, almonds were expected to continue on their steady growth path for many years to come. 

That was until the country announced a 15% tariff hike on a wide range of U.S. goods earlier this month. The reaction was part of an ongoing trade dispute that has raised concerns for several produce industry sectors including cherries, citrus and pome fruit.

Julie Adams, the Almond Board of California's vice president of global technical & regulatory affairs, gave a written response on the matter to Fresh Fruit Portal.

"China is the third largest export destination for California almonds behind Spain and India, with an approximate value of US$500 million," she says. 

Julie Adams, the Almond Board of California's vice president of global technical & regulatory affairs.

"Our shipments to China year-to-date are up 22% compared with the same time last year (August-March)."

These figures also include shipments to Hong Kong, which as a free port does not apply the extra tariffs. If we just look at the export figures to the Chinese mainland, year-on-year growth stood at 60% in 2017 to hit US$99 million.

"The almond industry has been active in China for more than 20 years, with marketing and trade promotion activities.  Prior to the announcement of the additional tariff, exports were anticipated to continue growing at about 6% per year," Adams said.

So how much could that growth rate be set back in the new trading environment?

"Like many developing markets, China is price sensitive. Adding 15% to the existing 10% tariff will certainly have a negative impact on demand. How substantial the impact, and how long it may take to rebuild lost demand, is hard to predict," she said.

"Clearly, any type of trade war will not only hurt our farmers and shippers here in California, but also our Chinese customers and consumers who have a growing demand for nutrient-rich California almonds. 

"Even a small impact would hurt California almond farmers. We never want to diminish any trading opportunity anywhere in the globe."

The executive added any ground lost to competitors as a result of the tariffs could be tough to claw back.

"California grows 80% of the world's almonds.  However, Australia is the number 2 producer and their tariffs will drop to 0% in 2019 due to a free trade agreement with China," she said.

"Importers may look to Australian almonds to help fill demand. Any lost market share can be difficult to get back."

Headline photo: www.shutterstock.com

www.freshfruitportal.com