Wuhan pneumonia impact 0201"Taiwan's agricultural exports to China hit hard, pineapple and sugar apple exports suffer setbacks as prices fall, pineapple and grouper "bracing for the worst"

Text by Upstream/Downstream reporters Lin Yijun and Cai Jiashan

The Wuhan pneumonia outbreak in China is severe. Since the lockdown of Wuhan began on the morning of January 23, more than a dozen cities in Hubei Province have successively closed off external transportation. Taiwan's agricultural exports to China have also been affected. Pineapple and sugar apple (custard apple), which rely mainly on the Chinese market and are currently in season, are the first to be hit. Traders have notified of temporary suspension of orders, and domestic prices have immediately dropped by 30%. Pineapple, which relies on China for 90% of its exports, as well as giant grouper, may also be affected in the future.

Jiao Jun, who has studied agricultural export practices for many years, analyzed that based on the SARS experience, the overall GDP and consumer spending power of the public will decline, and Taiwan's agricultural products can be considered a luxury on the other side of the strait. For example, pineapple and sugar apple are mostly used as gifts, while giant grouper is a high-end delicacy in restaurants. "Luxury goods under such economic setbacks are certainly the first to be hit."

Jiao Jun observed that in addition to first-tier cities like Beijing and Shanghai, second-tier cities are even more the mainstay supporting Taiwan's agricultural products in China. For example, Wuhan is the fastest-developing second-tier city, and its location is at the center of China. If the epidemic is a short-term phenomenon, that would be fine, but if it burns for more than half a year or even shows no end in sight, it will inevitably deal a huge blow to Taiwan's agricultural products. "As long as 20% flows back to the domestic market, it is actually quite frightening. Even 3% or 5% will put pressure on domestic agricultural prices."

Forty percent of total pineapple and sugar apple production is sold to China; temporary suspension of orders has already hit domestic prices

Our country's pineapple and sugar apple heavily depends on the Chinese market. According to statistics, in 2018 (ROC year 107), pineapple and sugar apple production was 28,964 metric tons, of which about 10,000 metric tons were sold to China, accounting for as high as 40%. Zhuang Yihao of the Promotion Department of the Taitung District Farmers' Association said that the epidemic has affected the transportation and freshness preservation of pineapple and sugar apple. Traders have notified that there are temporarily no orders, and it is unknown how long the impact will last. The pineapple and sugar apple currently being harvested are all sent to domestic fruit wholesalers, and when volume is large, prices fall. Traders are still continuously contacting new customers in Malaysia, Indonesia, Hong Kong, China, and elsewhere.

Qiu Ruizhang, a sugar apple farmer in Taimali, Taitung County, explained that fruit volume is high now through March. Ninety percent of exported pineapple and sugar apple goes to China. Now that large volumes are being sold to the domestic market and cannot be absorbed, prices are affected. Nearby fruit farmers, seeing the poor market conditions, dare not harvest.

Qiu Ruizhang added that China has delayed the opening of markets due to the epidemic. Currently, it is heard that traders will only begin receiving goods in early February, and peers all plan to wait for notification before harvesting.

Xie Jinhong, a young farmer growing sugar apple in Taitung County, said that with the impact of the epidemic, they can only switch to selling in the domestic market and first adjust production seasonally in response. Most members of the production and marketing group are now delaying harvest. In the past, pineapple and sugar apple had never experienced a collapse, so there is no particular worry. Everything will wait until China's market opens on February 3.