Required Report - Public distribution

**Date:** 11/29/2007

**GAIN Report Number:** CH7090

CH7090

**China, Peoples Republic of**

**Citrus**

**Annual**

**2007**

**Approved by:**

![](media/image1.wmf)William Westman

AGBEIJING

**Prepared by:**

Wu Bugang, Jane Li, Eric Trachtenberg, and Chanda Beckman

**Report Highlights:**

China's total MY 2007 citrus production is forecast at 17.6 million MT,
an increase of 10 percent from MY 2006, because of new bearings and
favorable weather. Citrus production, especially oranges, is expected to
grow at a quick pace in the next few years as a result of increased
plantings. MY 2007 FCOJ production is forecast to double, driven by high
world prices and increased availability of local oranges for juicing.
Imports of oranges are forecast to rebound to 60,000 MT, up from 36,000
MT in MY 2006, when a freeze in California tightened world supplies.
Recent rapid growth of citrus exports, however, may slow following
stricter food safety control over fruit exports.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 4](#production)

[More Plantings, Crop Recovery, and Good Weather Result in Increased
Production
4](#more-plantings-crop-recovery-and-good-weather-result-in-increased-production)

[Good Returns Result in Increased Acreage
4](#good-returns-result-in-increased-acreage)

[Farmers and Private Companies Investing More in Citrus
4](#farmers-and-private-companies-investing-more-in-citrus)

[Processing 4](#processing)

[High Prices Push FCOJ Production Up
4](#high-prices-push-fcoj-production-up)

[An Emerging Market for NFC Production in China
5](#an-emerging-market-for-nfc-production-in-china)

[Canned Citrus Production Remains Stable
5](#canned-citrus-production-remains-stable)

[Prices 5](#prices)

[As Production Costs Increase, Purchase Prices Expected to Slightly
Decrease
5](#as-production-costs-increase-purchase-prices-expected-to-slightly-decrease)

[Consumption 6](#consumption)

[Consumption Growing in Medium and Large Size Cities, not as Great in
Rural Areas
6](#consumption-growing-in-medium-and-large-size-cities-not-as-great-in-rural-areas)

[Juice and Juice Drink Consumption Increase in Popularity
6](#juice-and-juice-drink-consumption-increase-in-popularity)

[New Packaging May Contribute to Increase in Canned Citrus Consumption
7](#new-packaging-may-contribute-to-increase-in-canned-citrus-consumption)

[Trade 7](#trade)

[Imports 7](#imports)

[Lower World Prices and Recovery in California Lead to Increase in
Orange Imports
7](#lower-world-prices-and-recovery-in-california-lead-to-increase-in-orange-imports)

[Low Quality Australian Tangerines Result in Fewer Imports Overall
7](#low-quality-australian-tangerines-result-in-fewer-imports-overall)

[Increased Domestic Production and High Prices Reduce Imports of FCOJ
7](#increased-domestic-production-and-high-prices-reduce-imports-of-fcoj)

[Exports 8](#exports)

[Bumper Citrus Harvest, but Only Moderate Export Growth
8](#bumper-citrus-harvest-but-only-moderate-export-growth)

[Policy 8](#policy)

[Direct Support from Provincial or Municipal Governments
8](#direct-support-from-provincial-or-municipal-governments)

[Law on Specialized Farmer Cooperatives
8](#law-on-specialized-farmer-cooperatives)

[Food Safety Concerns Increase Regulation of Exported Citrus
8](#food-safety-concerns-increase-regulation-of-exported-citrus)

[Marketing 9](#marketing)

[Citrus Growing Quickly in China's Fresh Fruit Market
9](#citrus-growing-quickly-in-chinas-fresh-fruit-market)

[Oranges 9](#oranges)

[Lemons 9](#lemons)

[Grapefruit 9](#grapefruit)

[Juice 9](#juice)

[Citrus Distribution 10](#citrus-distribution)

[Inadequate Cold Chain Still a Challenge
10](#inadequate-cold-chain-still-a-challenge)

[Importance of Brand Awareness 11](#importance-of-brand-awareness)

[Other Relevant Reports 11](#other-relevant-reports)

[Tables: 12](#__RefHeading___Toc184118630)

[Historical Production Tables by Province
12](#historical-production-tables-by-province)

[Production, Supply, and Demand (PS&D) Tables
13](#production-supply-and-demand-psd-tables)

[Fresh Oranges 13](#fresh-oranges)

[Trade Matrices for Fresh Oranges 14](#trade-matrices-for-fresh-oranges)

[Export Prices for Fresh Oranges 15](#export-prices-for-fresh-oranges)

[Frozen Concentrate Orange Juice (FCOJ)
16](#frozen-concentrate-orange-juice-fcoj)

[Trade Matrices for FCOJ 17](#trade-matrices-for-fcoj)

[Export Prices for FCOJ 18](#export-prices-for-fcoj)

[Fresh Tangerines 19](#fresh-tangerines)

[Trade Matrices for Fresh Tangerines
20](#trade-matrices-for-fresh-tangerines)

[Export Prices for Fresh Tangerines
21](#export-prices-for-fresh-tangerines)

[Fresh Grapefruit/Pomelos 22](#fresh-grapefruitpomelos)

[Trade Matrices for Fresh Grapefruit/Pomelos
23](#trade-matrices-for-fresh-grapefruitpomelos)

[Export Prices for Fresh Grapefruit/Pomelos
24](#export-prices-for-fresh-grapefruitpomelos)

# Executive Summary

Citrus production in marketing year (MY) 2007 is forecast at 17.6
million tons (MT), an increase of 10 percent over MY 2006, because
increased plantings beginning in 2002 have started bearing fruit. The
expected increase in production is also attributed to favorable weather
conditions in most producing provinces throughout the crop year. Orange
acreage is expanding in Jiangxi and Hunan Provinces, and Chongqing
Municipality. Fruit quality is generally improved, the result of
enhanced field management and increased inputs. China's citrus
production is expected to grow quickly in the next few years as a result
of the new plantings. Despite the increased production costs, the bumper
harvest will likely result in slightly decreased prices because of
increased supplies.

Encouraged by high world prices and the increased availability of
domestically produced oranges, frozen Concentrated Orange Juice (FCOJ)
production is forecast at 20,000 MT in MY 2007, double MY 2006
production. However, the supply of juicing oranges is still insufficient
relative to China's processing capacity. Production of canned citrus is
expected to remain unchanged, but exports are forecast to decrease
slightly because of the recent anti-dumping investigation on Chinese
canned citrus by the European Commission.

Citrus consumption continues to grow in tandem with rising incomes. As
consumers pay more attention to maintaining a healthy lifestyle, the
demand for high quality fruit grows stronger. Consumption of juice,
especially juice drinks, is growing rapidly in large and medium size
cities. Canned citrus consumption, however, remains stagnant because of
ingrained dietary habits.

Imports of oranges are forecast to rebound to 60,000 MT in MY 2007, up
from 36,000 MT in MY 2006. U.S. exports fell in MY 2006 because U.S.
orange production dropped significantly after a freeze in California
that resulted in tightened world supplies. Despite a bumper harvest, MY
2007 exports are only expected to see moderate growth because of
tightened regulations on all exported fruit.

# Production 

## More Plantings, Crop Recovery, and Good Weather Result in Increased Production

Citrus production in marketing year (MY) 2007 is forecast at 17.6
million metric tons (MT), an increase of 10 percent from MY 2006,
because increased plantings since 2002 have started bearing fruit. The
expected production increases are also because of a crop recovery in
Chongqing Municipality and parts of Sichuan Province that lost a
significant portion of production to a severe drought in the summer of
2006. The weather has also been favorable in other major
citrus-producing provinces, such as Guangdong, Guangxi, Sichuan, Hunan,
and Hubei throughout the crop year. This is expected to lead to a bumper
harvest for all types of citrus.

MY 2007 (November-October) orange production is forecast at 5.5 million
MT, up 14 percent from the previous season because new plantings in
Jiangxi, Hubei, Hunan, and Chongqing have begun bearing fruit. Tangerine
production is forecast at 9.7 million MT in MY 2007 (October-September),
up eight percent from MY 2006 because of increased yields. Increased
plantings are also likely to boost pomelo (MY October -- September) and
lemon (MY October -- September) production, forecast at 2.2 million MT,
an increase of 10 percent, and 0.2 million MT, up 50 percent,
respectively. Citrus production, especially orange production, is
expected to continue increasing at a quick pace over the next five to
ten years, because of the government-encouraged increase in planting
area that began in 2002 when the Ministry of Agriculture published its
citrus plan. Jiangxi Province planted more navel oranges from 2000-2004,
and industry sources predict production there will increase by an annual
rate of 30 percent until 2010-2012. Expansion of citrus acreage is
occurring in other producing areas, such as Guangdong and Hunan
Provinces.

## Good Returns Result in Increased Acreage

Orange acreage is forecast at 660,000 hectares (HA) in MY 2007, up five
percent from MY 2006, largely because of new plantings in Jiangxi and
Hunan Provinces and in Chongqing Municipality. The planting area for
tangerines is forecast to increase slightly to 775,000 HA in MY 2007, up
from 767,000 HA in 2006, with new plantings focused on replacing old
trees with early maturing or consumer-favored varieties. A similar
situation applies to pomelo and lemon plantings. Farmers continue to
increase citrus plantings because of good returns.

## Farmers and Private Companies Investing More in Citrus

MY 2007 citrus quality has improved overall because farmers have
improved orchard management and increased inputs such as pesticides and
fertilizers. Guided by provincial governments, farmers in some
citrus-producing provinces such as Zhejiang are optimizing the planted
varieties and adopting wholesome farming practices that help improve
overall fruit quality. Additionally, enhanced involvement of private
companies in citrus production is also playing a role in fruit quality
improvement. These firms are building more packing houses and processing
facilities that source citrus from contracted orchards where
agro-chemicals and farming technologies are provided by the company to
ensure product quality and safety.

# Processing

## High Prices Push FCOJ Production Up

Frozen concentrated orange juice (FCOJ) production is forecast at 20,000
MT in MY 2007, double that of MY 2006, because of high world market
prices and the increased availability of domestic juicing oranges.
However, the supply of domestic juicing oranges is insufficient to
supply China's processing capacity. MY 2006 production is also revised
up to 11,000 MT, based on industry figures. Although world FCOJ prices
have dropped to U.S. \$2,100-2,200 per MT from a peak level of \$2,700
in 2005, producing FCOJ from local oranges is still profitable. For
example, farm gate prices for locally-produced oranges in Chongqing are
quoted at around U.S. \$120 per MT. Since 13 MT of oranges are required
to produce one MT of FCOJ, the total input cost is only \$1,560 per MT.

Production of processing oranges is increasing rapidly because of
government policies, including the relocation of immigrants from the
Three Gorges area who are being encouraged to plant orange trees.
Juicing companies and local governments have also worked together to
encourage farmers to grow oranges through the provision of free or
subsidized seedlings and other technical services. Industry sources
indicate Chongqing's orange acreage will increase by 6,700 hectares in
each of the next five years because of such government programs.
Domestic processing companies have built several large juicing
facilities in Chongqing, Hubei, and Fujian, but they are not running at
full capacity because of the lack of sufficient fresh oranges.
Processors hope the situation will change in five to ten years after
these new plantings reach peak production age.

## An Emerging Market for NFC Production in China

Some domestic processors have begun to eye an emerging market for
not-from-concentrate (NFC) juice. One NFC juice facility built in
Chongqing has an annual production capacity of 50,000 MT. Although it
processed a mere 3,000 MT of NFC orange juice in MY 2006, the company
expects production to triple in the coming season, when many more
oranges are harvested in the region. According to industry sources, a
U.S. company and the Zhongxian County Government of Chongqing signed an
MOU to invest U.S. \$150 million in a new NFC facility. The facility is
expected to be built in the next two years with an annual production
capacity of 150,000 MT. Major international firms have also expressed
interest in building juicing facilities in China to take advantage of
the growing demand for juice and juice drinks and to connect to existing
distribution networks. However, finding a sustainable supply of raw
fruit may be a challenge to these multi-national companies.

## Canned Citrus Production Remains Stable 

Canned citrus production is forecast at 400,000 MT in MY 2007, unchanged
from MY 2006. However, some local canneries that primarily export to EU
countries may reduce production in anticipation of a negative finding
after the European Commission launched an anti-dumping investigation
into China's canning industry on October 20, 2007. With the EC's initial
ruling scheduled to be released by the end of November 2007, industry
sources predict the results will probably limit China's canned citrus
exports to the EU countries. At Spain's request, the EU implemented a
tariff rate quota (TRQ) for China's canned citrus exports from April
2004 through November 8, 2007. The TRQ was originally set at 30,843 MT
per year, or about half of the total export volume to Europe. The TRQ
was set at 20,738 MT for the period between April 11 and November 8,
2007. Because of consumer preference for fresh fruit over canned fruit,
China's canning industry is heavily dependent on the world market for
exports. While the export volume of canned citrus is forecast at 300,000
MT in MY 2007, down from 330,000 in MY 2006, industry sources indicate
total consumption in the domestic market will remain stable at between
50,000 and 100,000 MT.

# Prices

## As Production Costs Increase, Purchase Prices Expected to Slightly Decrease

Production costs for pesticides, fertilizers, water, and labor continue
to increase. According to the State Statistic Bureau, the cost of citrus
production in 2006 increased by 7.1 percent from the previous year.
Industry sources report the current production cost of navel oranges in
Ganzhou, Jiangxi Province is about U.S. \$0.14 per kilogram. Despite
improved quality, these increased costs and the bumper harvest are
likely to force MY 2007 citrus prices down slightly from the previous
season. In Zhejiang Province, the farm gate price for early mature
mandarins is U.S. \$0.16-0.19 per kilogram, slightly lower than MY 2006.
Purchase prices for navel oranges are quoted at U.S. \$0.38 per kilogram
in Jiangxi Province, down 15 percent from the previous year.

![](media/image2.wmf){width="6.49375in" height="2.6881944444444446in"}

# 

# Consumption

## Consumption Growing in Medium and Large Size Cities, not as Great in Rural Areas

Consumption of fresh fruit continues to grow with increasing incomes.
Most fresh fruit is consumed in large and medium size cities. The State
Statistic Bureau estimated 2006 per capita consumption of fresh fruit in
urban areas at 60 kilograms, up from 41 kilograms in 1990. This
contrasts with per capita rural consumption at only 20 kilograms. As
Chinese consumers become more health-conscious, they will seek higher
quality fruit. To the average consumer, quality fruit is most often
characterized by its sweet taste, appearance (especially color), and in
most cases, larger size. While an increasing number of consumers are
choosing to buy fruit in supermarkets because the quality and safety are
deemed more reliable, the majority of consumers continue to prefer wet
markets because they are significantly less expensive and more
convenient. This is especially true for China's older generations, who
are accustomed to buying all fruits and vegetables in wet markets. Some
high-end consumers prefer imported citrus even though the quality of
some domestic citrus has caught up with its imported counterparts. With
current storage technology, Chinese citrus cannot be stored beyond
February, so imported citrus becomes popular during the off-season
between March and October.

## Juice and Juice Drink Consumption Increase in Popularity

While juice consumption continues to grow, industry sources believe its
pace is slower than that of juice drinks. A recent Chinese Central
Television (CCTV) survey about juice consumption showed only 35 percent
of China's total urban households drink 100 percent juice. However, it
has seen significant growth in a few large cities like Shanghai and
Beijing, because consumers are more aware of the nutritional benefits.
The study stated that juice consumption in Shanghai is growing by 40
percent annually. Juice is not a traditional Chinese beverage and many
consumers remain unaware of its nutritional value, believing juice is
too sweet and that fresh fruit is healthier. The survey sampled six
large cities: Beijing, Shanghai, Guangzhou, Wuhan, Qingdao, and Chengdu.
It also found that per capita consumption of juice is less than 1 liter
per year, and 54 percent of China's juice consumers drink juice after
dinner, unlike Western consumers who normally drink juice at breakfast.

Consumption of juice beverages is also increasing rapidly. An industry
report revealed that Chinese beverage factories produced a total of
seven million MT of juice drinks in January-August, 2007, up 21 percent
from the same period in 2006, when juice drinks accounted for nearly 80
percent of the total volume of juice and juice drinks. Much of the
orange juice consumed in China continues to be made from imported
concentrate and then reconstituted into juice drinks. Orange juice is
still the dominant juice flavor and is favored by 58 percent of
consumers. Industry sources predict that consumer preferences will move
toward higher fruit content beverages as consumers become more familiar
with the product and its nutritional value.

## New Packaging May Contribute to Increase in Canned Citrus Consumption

Domestic consumption of canned citrus has grown slowly because Chinese
consumers have long believed canned fruit contains preservatives that
are harmful to health. As a result, Chinese canneries have always
focused their attention on the international market and are reluctant to
try to change consumer perception because of limited resources. A few
processors, however, have introduced new packaging materials that make
canned fruit easier to carry and open than the traditional glass jars.
They hope this "package revolution" may help boost the volume of canned
fruit sales in the domestic market.

## 

# Trade

## Imports 

### Lower World Prices and Recovery in California Lead to Increase in Orange Imports 

China's imports of fresh oranges are forecast at 60,000 MT in MY 2007,
up 67 percent from 36,000 MT in MY 2006. This increase represented a
recovery of U.S. orange exports to China that fell sharply from October
2006 to September 2007 to 28,164 MT, down 45 percent from 50,947 MT from
the year before because the California freeze reduced U.S. orange
production and exports. In MY 2006, orange prices of other world
suppliers increased dramatically following the crop failure in the
United States. As a result of higher world prices, China's MY 2006
orange imports from other countries also declined. With increased
production and improved quality, Chinese oranges are posing a greater
challenge to U.S. oranges, especially during the local supply season
from November - February. U.S. oranges become more popular beginning in
March but compete with South African oranges, which enter China's market
beginning in June. South African oranges are priced lower than their
U.S. counterparts. According to a trader at the Guangzhou Jiangnan Fruit
and Vegetable Wholesale Market, Guangzhou distributes between 85 and 90
percent of all imported fruit to the rest of the country.

### Low Quality Australian Tangerines Result in Fewer Imports Overall

MY 2007 tangerine imports are forecast at 20,000 MT, down 26 percent
from the previous year. Traders are expected to import fewer Australian
tangerines because last season's quality was lower than usual.
Australian tangerine exports to China in MY 2006 have more than tripled
since gaining access to China's market in MY 2005. Imported tangerines
are available during the off-season from May to October and are very
popular during the Mid-Autumn Festival in September. Chinese customs
figures show a dramatic increase of New Zealand tangerine imports in MY
2006. However, industry sources believe these tangerines could have been
sourced from other countries and falsely labeled as New Zealand fruit.
This could be because fruit from New Zealand rarely has difficulty
clearing customs.

### Increased Domestic Production and High Prices Reduce Imports of FCOJ

Imports of FCOJ are forecast at 50,000 MT, down 12 percent from the
revised MY 2006 figure of 56,991 MT, because of high world market prices
and increased domestic production. World FCOJ prices are currently
quoted at U.S. \$2,100-2,200, higher than domestically produced juice,
which is priced at nearly U.S. \$1,900. Chinese juicing companies are
expected to double FCOJ production this season given increased
production of fresh oranges, but the quantity of juicing oranges is
still insufficient to supply China's current processing capacity. This
will also limit further production expansion. While revised up 18,991 MT
from the previous estimate, MY 2006 imports of FCOJ also dropped by 12
percent to 56,991 MT. The shortfall was filled by domestically produced
FCOJ when production tripled to exceed 10,000 MT.

## Exports

### Bumper Citrus Harvest, but Only Moderate Export Growth

China is only expected to see moderate growth in MY 2007 citrus exports
despite the bumper harvest, because China's quarantine agency, AQSIQ,
issued a new directive requiring all exported fruit be sourced from
registered packing houses and orchards (see Policy below). Tangerine and
orange export volumes are forecast at 390,000 MT and 85,000 MT, up five
percent and eight percent, respectively, from MY 2006. China exported
371,000 MT of tangerines and 79,000 MT of oranges in MY 2006, up 10
percent and 55 percent from MY 2005. Exports of pomelos are forecast to
more than double in MY 2007 to 110,000 MT, because exports to Europe and
Hong Kong already follow AQSIQ's new export requirements.

# Policy

## Direct Support from Provincial or Municipal Governments 

While the central government provides guidance for citrus planting,
direct support for citrus production occurs at the provincial or lower
levels of government. In Chongqing Municipality, however, a central
government fund to relocate immigrants from Three Gorges area is closely
connected with citrus production. The central and municipal governments
have built citrus orchards, mostly orange farms, to give to relocated
immigrants (see
[CH6111](http://www.fas.usda.gov/gainfiles/200612/146249697.pdf)). The
Chongqing Municipal Government attaches great importance to citrus
production within the municipality, which has been designated as the
center of processing oranges under the national plan for citrus
production (see
[CH3132](http://www.fas.usda.gov/gainfiles/200312/146085270.pdf)).
Working with private juicing companies who have built several
large-scale citrus nurseries, the government provides subsidized
seedlings to farmers to plant orchards. In Zhongxian County, for
example, the government gives farmers four Renminbi to buy a five
Renminbi seedling (U.S. \$0.67). It is reported that the Chongqing
Municipal Government will spend 300 million Renminbi (U.S. \$40.5
million) in each of the next five years to support citrus development.

## Law on Specialized Farmer Cooperatives

China recently passed a new Law on Specialized Farmer Cooperatives to
support the establishment and operation of these entities. The new law,
effective July 2007, allows various levels of government to provide
financial support for farming and marketing to these organizations (see
[CH6113](http://www.fas.usda.gov/gainfiles/200612/146259726.pdf)). The
State Council is working on detailed policies regarding tax privileges
and other financial support to farmer cooperatives. Meanwhile, a
guarantee fund was established by China Development Bank in 2006 to help
farmers receive loans. The government has also formed credit-guarantee
companies backing farmers on financial services and a few small-scale
pilot programs in areas like Chongqing Municipality.

## Food Safety Concerns Increase Regulation of Exported Citrus

In a bid to ensure export fruit safety, China's inspection and
quarantine authority, AQSIQ, recently issued a directive to its local
branches (CIQs) requiring that all export fruit originate from
CIQ-registered orchards and packing houses as of November 1, 2007. The
new policy is likely to affect Chinese citrus exports in the near term
because previously, citrus destined for Southeast Asian countries and
Russia, the main export destinations of Chinese citrus, were sold
through different types of packing houses or agents not registered at
CIQs. Registration requires stringent inspection and review by CIQ
officials on agro-chemical use and pest control. Many smaller packing
houses and orchards are unlikely to meet the criteria, at least in the
short term. Currently, fruit exports to the United States, Canada,
Australia, New Zealand, Japan, South Korea, Hong Kong, and Macau are
already sourced from CIQ-registered packing houses and orchards as
requested by the importing countries. The directive also requires local
CIQ's to step up inspection on imported fruit.

# Marketing

## Citrus Growing Quickly in China's Fresh Fruit Market

Citrus is one of the fastest growing segments of China's fresh fruit
market. As consumer incomes and preference for high quality foods
increase, this trend is expected to continue, creating expanded
opportunities for both local and imported citrus. Along with increasing
demand for higher quality fruit, consumers place a growing emphasis on
taste, appearance, and shape. According to local fruit importers and
retailers, citrus with good color, a shinny peel, and a high Brix
content are most popular. New and innovative products are especially
appealing to today's Chinese consumers, as evidenced by the willingness
of consumers to try new citrus varieties. At the same time, consumer
lifestyles are changing and convenience is becoming an important
consideration. As a result, consumers increasingly favor easy to peel
citrus and citrus juice. Most imported citrus is consumed by mid to high
income consumers or purchased as gifts. Chinese consumers usually buy
fruit based on its appearance, even if less expensive fruit of similar
taste and quality is available, making presentation and color essential
to maintaining high retail price levels.

### Oranges

Fresh oranges are available in the Chinese market year-round with U.S.
oranges normally in the market from December to July. Southern
hemisphere suppliers such as Australia, South Africa, and Chile are the
dominant suppliers of oranges during the summer and fall. Navel and
Valencia oranges are the two top varieties in the market, with navel
oranges being the most popular since they are seedless and easy to peel
and break into segments.

### Lemons

Lemons continue to evolve as an ingredient in cooking, especially in the
food service sector, because of their colorful appearance and
versatility in cooking. Imported lemons dominate China's fresh lemon
market with most consumers purchasing lemons as a flavor enhancer, often
in beverages, and a source of vitamin C. U.S. lemons can be found in
China's market throughout the year, with Sunkist being the major
supplier.

### Grapefruit

Grapefruit is still relatively unknown to China's consumers, and they
often confuse the fruit with pomelos. Grapefruit are traditionally not
sweet enough to appeal to the Chinese palate. Because of recent supply
problems in the United States, Israel currently dominates China's
grapefruit retail shelves. However, there is growth potential for U.S.
grapefruit in China if suppliers highlight the nutritional benefits and
target mid-high income consumers with market development efforts.

### Juice

Average per capita fresh juice consumption remains much lower in China
compared to developed countries. According to a fruit juice consumption
survey conducted by The Huiyuan Group, the largest fruit juice producer
in China, a growing number of consumers recognize the health benefits
associated with drinking fresh fruit juice, but it has not yet become a
common purchase for many households. In addition, many consumers confuse
100 percent fresh juice with juice drinks, which often contain only
limited percentages of fruit juice. Asian Citrus, China's largest orange
plantation, sees the potential for a substantial orange juice market
over the next five to ten years and is ready to introduce high value
fresh-squeezed orange juice to the upper end of the market, targeting
wealthier Chinese consumers.

## Citrus Distribution 

Traditionally, citrus is distributed via country fairs, and purchasing
and wholesale markets. Country fairs are the oldest form of markets in
rural areas and are where most locally produced citrus is sold. In this
format, fruit peddlers buy citrus in the local market, and then
transport it to sell in other locations. Additionally, citrus growers
sell their products in purchasing markets, also known as primary or
elementary markets, which have historically been state-owned trading
companies. However, the market share of purchasing markets is declining
as packing houses and processing enterprises have evolved and expanded.
Wholesale markets play an important role in citrus distribution for both
domestic and imported fruit. Xinfadi, the largest wholesale produce
market in Beijing, distributed about 500,000 MT of domestic and imported
citrus in 2006. Jiangnan Market, the largest produce wholesale market in
China and the major distribution center for imported fruit, handled five
million MT of fruit and vegetables (domestic and imported) valued at
U.S. \$2 billion in 2006.

Increasingly, retailers play an important role in citrus distribution to
end-users. As supermarkets demand higher quality and quantities, they
tend to build long-term relationships with preferred suppliers to
guarantee continuous high quality supplies to meet demand. The modern,
centralized high volume distribution systems of most major retailers
provide citrus suppliers and exporters a larger target market with fewer
layers of distribution to navigate. Continuing modernization of
procurement practices has benefited many suppliers, enabling them to
deliver higher quality product in a timely and price-competitive manner.

## Inadequate Cold Chain Still a Challenge

Despite growing demand and improved distribution channels, China's
inadequate cold chain (storage facilities, poor handling) is still a
challenge for U.S. exports. According to one citrus importer in Qingdao,
even with a cold storage warehouse, it is difficult to consistently
store products because of temperature fluctuations as products move from
the port, during transport, and into cold storage. In addition, some
retailers lack the knowledge on proper handling, which leads to
deterioration in quality, appearance, and the taste of citrus before it
reaches the consumer. The lack of quality controls in the cold chain
will continue to affect domestic citrus supplies and restrict additional
opportunities for imports.

As one of the world's major citrus producers and exporters, domestic
citrus dominates China's market and is the primary competition for
citrus suppliers in the market. Post estimates local citrus production
will influence the future of imported citrus growth as well as citrus
market prices. However, domestic fresh citrus is virtually absent in the
market from April to August. The main competitors for U.S. citrus during
this off-season are Australia, New Zealand, South Africa, and Chile.
Additionally, citrus products from ASEAN countries have a price
advantage over U.S. exports because of lower production costs. The
following graph shows the break-down of China's citrus imports from the
United States and competitor suppliers in terms of value.

![](media/image3.wmf){width="3.5597222222222222in"
height="2.4555555555555557in"}

*Source: World Trade Atlas*

## Importance of Brand Awareness

In response to stiff domestic and international competition facing U.S.
citrus producers, U.S. exporters must establish brand awareness with
Chinese consumers. Suppliers should look for ways to enhance their
brand, bond with Chinese consumers, and link products to lifestyle
trendsetters. Chinese consumers are more focused on brand names than
most of their Western counterparts. Consumers want to know which new
trends will give them added status. There is no nationally dominant
citrus brand in the current market, creating an opportunity for U.S.
producers to pursue and claim the title. Sunkist is by far the most
popular U.S. citrus brand among consumers in China.

# Other Relevant Reports

**FAS Beijing Reports**

[CH6111 - China Citrus Annual,
2006](http://www.fas.usda.gov/gainfiles/200612/146249697.pdf)

[CH3132 - China Citrus Annual,
2003](http://www.fas.usda.gov/gainfiles/200312/146085270.pdf)

[CH6113 - Presidential Order 57 Supports Farmer Cooperatives in China,
2006](http://www.fas.usda.gov/gainfiles/200612/146259726.pdf)

[]{#__RefHeading___Toc184118630 .anchor}**Tables:**

## Historical Production Tables by Province 

  ------------- --------- -------- --------- -------- --------- -------- --------- --------
  Orchard Area                                                                     
  and                                                                              
  Production by                                                                    
  Province                                                                         

                2003               2004               2005               2006      

                1000 Ha   1000 MT  1000 Ha   1000 MT  1000 Ha   1000 MT  1000 Ha   1000 MT

  Hunan         259.9     1,728    276.4     1,879    296.2     2,120    313.8     2,508

  Fujian        164.0     1,944    165.6     2,068    170.3     2,153    170.2     2,267

  Guangdong     149.9     1,351    175.7     1,591    195.5     1,827    224.5     2,244

  Sichuan       191.7     1,862    201.5     1,988    206.9     2,137    215.6     2,058

  Guangxi       122.0     1,521    134.3     1,719    141.3     1,877    151.5     2,055

  Hubei         109.6     1,241    124.7     1,308    143.2     1,463    159.0     1,811

  Zhejiang      125.0     1,767    124.1     2,010    123.0     1,481    120.2     1,805

  Jiangxi       186.0     620      217.3     844      215.1     1,098    229.3     1,394

  Chongqing     96.3      752      98.1      799      108.9     909      109.9     847

  Yunnan        25.1      133      25.9      166      27.9      211      29.1      244

  Shanghai      9.5       174      11.4      185      8.7       180      10.6      197

  Guizhou       33.9      150      35.5      158      38.7      172      37.0      177

  Shaanxi       16.6      99       18.1      117      19.7      168      21.5      163

  Jiangsu       3.2       54       3.6       48       3.9       52       5.4       48

  Henan         8.1       30       9.5       35       10.1      36       9.7       37

  Hainan        2.5       15       3.1       23       3.7       20       3.6       27

  Anhui         2.2       11       2.3       13       4.0       12       3.4       13

  Gansu         0.2       3        0.2       3        0.2       3        0.2       3

  Total         1,505.7   13,454   1,627.3   14,958   1,717.3   15,919   1,814.5   17,898

  Source:                                                                          
  Ministry of                                                                      
  Agriculture                                                                      
  Abstracts                                                                        
  ------------- --------- -------- --------- -------- --------- -------- --------- --------

## Production, Supply, and Demand (PS&D) Tables

### Fresh Oranges

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><strong>PSD Table</strong></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="9"><strong>China, Peoples Republic of</strong></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="9"><p><strong>Oranges, Fresh</strong></p>
<p>(HECTARES)(1000 TREES)(1000 MT)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>11/2005</td>
<td>11/2005</td>
<td></td>
<td>11/2006</td>
<td>11/2006</td>
<td></td>
<td>11/2007</td>
<td>11/2007</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>612000</td>
<td>612000</td>
<td>612000</td>
<td>628000</td>
<td>628000</td>
<td>628000</td>
<td>0</td>
<td>0</td>
<td>660000</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Non-Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total No. Of Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Production</td>
<td>4450</td>
<td>4450</td>
<td>4450</td>
<td>4800</td>
<td>4800</td>
<td>4800</td>
<td>0</td>
<td>0</td>
<td>5450</td>
</tr>
<tr class="odd">
<td>Imports</td>
<td>64</td>
<td>64</td>
<td>64</td>
<td>68</td>
<td>68</td>
<td>36</td>
<td>0</td>
<td>0</td>
<td>60</td>
</tr>
<tr class="even">
<td>Total Supply</td>
<td>4514</td>
<td>4514</td>
<td>4514</td>
<td>4868</td>
<td>4868</td>
<td>4836</td>
<td>0</td>
<td>0</td>
<td>5510</td>
</tr>
<tr class="odd">
<td>Exports, Fresh</td>
<td>51</td>
<td>51</td>
<td>51</td>
<td>62</td>
<td>62</td>
<td>79</td>
<td>0</td>
<td>0</td>
<td>85</td>
</tr>
<tr class="even">
<td>Fresh Dom. Consumption</td>
<td>4421</td>
<td>4421</td>
<td>4421</td>
<td>4661</td>
<td>4661</td>
<td>4612</td>
<td>0</td>
<td>0</td>
<td>5155</td>
</tr>
<tr class="odd">
<td>For Processing</td>
<td>42</td>
<td>42</td>
<td>42</td>
<td>145</td>
<td>145</td>
<td>145</td>
<td>0</td>
<td>0</td>
<td>270</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>4514</td>
<td>4514</td>
<td>4514</td>
<td>4868</td>
<td>4868</td>
<td>4836</td>
<td>0</td>
<td>0</td>
<td>5510</td>
</tr>
</tbody>
</table>

#### Trade Matrices for Fresh Oranges

  -------------------- -------------- -------------------- --------------
  **Import Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Oranges, Fresh                      

  Time Period          Oct-Sept       Units:               MT

  Imports for:         2005                                **2006**

  U.S.                 50947          U.S.                 28164

  Others                              Others               

  New Zealand          8288           South Africa         5014

  South Africa         3446           Taiwan               1317

  Argentina            698            Argentina            1080

  Thailand             266            New Zealand          1038

  Uruguay              122            Uruguay              999

  Taiwan               23             Thailand             834

  Brazil               5              Egypt                220

                                      Australia            167

                                      Brazil               21

                                      Israel               19

  Total for Others     12848                               10709

  Others not Listed    0                                   0

  Grand Total          63795                               38873
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

  -------------------- -------------- -------------------- --------------
  **Export Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Oranges, Fresh                      

  Time Period          Oct-Sept       Units:               MT

  Exports for:         2005                                **2006**

  U.S.                 0              U.S.                 0

  Others                              Others               

  Hong Kong            17194          Hong Kong            33855

  Vietnam              17099          Vietnam              14420

  Malaysia             5962           Malaysia             14257

  Russia               4573           Russia               8009

  Singapore            1867           Canada               3480

  Macau                1808           Singapore            1822

  Canada               791            Macau                1700

  Thailand             694            Indonesia            627

  Indonesia            328            UAE                  300

  Philippines          177            Kyrgyzstan           142

  Total for Others     50493                               78612

  Others not Listed    392                                 210

  Grand Total          50885                               78822
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

#### Export Prices for Fresh Oranges

  ------------------------ ---------------- --------------- ---------------
  **Prices Table**                                          

  **Country**              China, Peoples                   
                           Republic of                      

  **Commodity**            Oranges, Fresh                   

  Prices in                US\$             per uom         MT

                                                            

  Year                     2006             2007            \% Change

  Jan                      400              510             28%

  Feb                      390              570             46%

  Mar                      320              460             44%

  Apr                      250              300             20%

  May                      260              250             -4%

  Jun                      330              280             -15%

  Jul                      130              170             31%

  Aug                      300              160             -47%

  Sep                      N/A              130             N/A

  Oct                      430              270             -37%

  Nov                      580              N/A             

  Dec                      470              N/A             

                                                            

  Exchange Rate            7.5/1.00         Local           
                                            Currency/US \$  

  Date of Quote            11/26/2007       MM/DD/YYYY      
  ------------------------ ---------------- --------------- ---------------

Source: China Customs Data

### Frozen Concentrate Orange Juice (FCOJ)

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><strong>PSD Table</strong></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="9"><p><strong>China, Peoples Republic of</strong></p>
<p>Degrees Brix</p></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="9"><p><strong>Orange Juice</strong></p>
<p>(MT)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>10/2005</td>
<td>10/2005</td>
<td></td>
<td>10/2006</td>
<td>10/2006</td>
<td></td>
<td>10/2007</td>
<td>10/2007</td>
</tr>
<tr class="odd">
<td>Deliv. To Processors</td>
<td>42000</td>
<td>42000</td>
<td>42000</td>
<td>145000</td>
<td>145000</td>
<td>145000</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>12000</td>
<td>12000</td>
<td>8000</td>
<td>0</td>
<td>0</td>
<td>10000</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>3000</td>
<td>3000</td>
<td>3000</td>
<td>10000</td>
<td>10000</td>
<td>11000</td>
<td>0</td>
<td>0</td>
<td>20000</td>
</tr>
<tr class="even">
<td>Imports</td>
<td>64653</td>
<td>64653</td>
<td>64653</td>
<td>38000</td>
<td>38000</td>
<td>56991</td>
<td>0</td>
<td>0</td>
<td>50000</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>67653</td>
<td>67653</td>
<td>67653</td>
<td>60000</td>
<td>60000</td>
<td>75991</td>
<td>0</td>
<td>0</td>
<td>80000</td>
</tr>
<tr class="even">
<td>Exports</td>
<td>2168</td>
<td>2168</td>
<td>2168</td>
<td>2000</td>
<td>2000</td>
<td>3302</td>
<td>0</td>
<td>0</td>
<td>3600</td>
</tr>
<tr class="odd">
<td>Domestic Consumption</td>
<td>53485</td>
<td>53485</td>
<td>57485</td>
<td>58000</td>
<td>58000</td>
<td>62689</td>
<td>0</td>
<td>0</td>
<td>69000</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>12000</td>
<td>12000</td>
<td>8000</td>
<td>0</td>
<td>0</td>
<td>10000</td>
<td>0</td>
<td>0</td>
<td>7400</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>67653</td>
<td>67653</td>
<td>67653</td>
<td>60000</td>
<td>60000</td>
<td>75991</td>
<td>0</td>
<td>0</td>
<td>80000</td>
</tr>
</tbody>
</table>

Note: Numbers have been converted to concentrated orange juice using a
ratio of 6:1 between single strength and concentrate. Products under
U.S. codes 20091200 and 20091900 are both treated as single strength
juice.

#### Trade Matrices for FCOJ

  -------------------- -------------- -------------------- --------------
  **Import Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Orange Juice                        

  Time Period          Oct-Sept       Units:               MT

  Imports for:         2005                                **2006**

  U.S.                 48             U.S.                 84

  Others                              Others               

  Brazil               43918          Brazil               35737

  Israel               18049          Israel               18093

  Netherlands          1412           Netherlands          1235

  Taiwan               279            Italy                940

  Italy                277            Greece               382

  Belgium              246            Spain                154

  Spain                160            Australia            124

  Australia            131            Singapore            95

  Hong Kong            37             Hong Kong            35

  South Africa         33             Thailand             18

  Total for Others     64542                               56813

  Others not Listed    63                                  95

  Grand Total          64653                               56992
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

  -------------------- -------------- -------------------- --------------
  **Export Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Orange Juice                        

  Time Period          Oct-Sept       Units:               MT

  Exports for:         2005                                **2006**

  U.S.                 0              U.S.                 0

  Others                              Others               

  Thailand             865            Thailand             1002

  Kuwait               509            Hong Kong            950

  Hong Kong            437            India                421

  Malaysia             132            Taiwan               301

  Singapore            103            Kazakhstan           112

  Taiwan               45             Mongolia             106

  Indonesia            18             Indonesia            91

  UAE                  18             Algeria              76

  Sri Lanka            8              Kuwait               73

  Pakistan             6              Tunisia              56

  Total for Others     2141                                3188

  Others not Listed    28                                  115

  Grand Total          2169                                3303
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

#### Export Prices for FCOJ

  ------------------------ ---------------- --------------- ---------------
  **Prices Table**                                          

  **Country**              China, Peoples                   
                           Republic of                      

  **Commodity**            Orange Juice                     

  Prices in                US\$             per uom         MT

                                                            

  Year                     2006             2007            \% Change

  Jan                      1200             1790            49%

  Feb                      1130             1580            40%

  Mar                      1170             1600            37%

  Apr                      1140             1710            50%

  May                      1310             1630            24%

  Jun                      1230             1680            37%

  Jul                      1210             1680            39%

  Aug                      1200             1700            42%

  Sep                      1240             1890            52%

  Oct                      1430             1670            17%

  Nov                      1350             N/A             

  Dec                      1330             N/A             

                                                            

  Exchange Rate            7.5/1.00         Local           
                                            Currency/US \$  

  Date of Quote            11/26/2007       MM/DD/YYYY      
  ------------------------ ---------------- --------------- ---------------

Source: China Customs Data

### Fresh Tangerines

<table>
<colgroup>
<col style="width: 13%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><strong>PSD Table</strong></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="9"><strong>China, Peoples Republic of</strong></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="9"><p><strong>Tangerines/Mandarins, Fresh</strong></p>
<p>(HECTARES)(1000 TREES)(1000 MT)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>10/2005</td>
<td>10/2005</td>
<td></td>
<td>10/2006</td>
<td>10/2006</td>
<td></td>
<td>10/2007</td>
<td>10/2007</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>760000</td>
<td>768000</td>
<td>760000</td>
<td>756000</td>
<td>0</td>
<td>767000</td>
<td>0</td>
<td>0</td>
<td>775000</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Non-Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total No. Of Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Production</td>
<td>8050</td>
<td>8050</td>
<td>8050</td>
<td>9000</td>
<td>0</td>
<td>9000</td>
<td>0</td>
<td>0</td>
<td>9720</td>
</tr>
<tr class="odd">
<td>Imports</td>
<td>7</td>
<td>3</td>
<td>7</td>
<td>5</td>
<td>0</td>
<td>27</td>
<td>0</td>
<td>0</td>
<td>20</td>
</tr>
<tr class="even">
<td>Total Supply</td>
<td>8057</td>
<td>8053</td>
<td>8057</td>
<td>9005</td>
<td>0</td>
<td>9027</td>
<td>0</td>
<td>0</td>
<td>9740</td>
</tr>
<tr class="odd">
<td>Exports, Fresh</td>
<td>338</td>
<td>405</td>
<td>338</td>
<td>407</td>
<td>0</td>
<td>371</td>
<td>0</td>
<td>0</td>
<td>390</td>
</tr>
<tr class="even">
<td>Fresh Dom. Consumption</td>
<td>7169</td>
<td>7168</td>
<td>7169</td>
<td>7948</td>
<td>0</td>
<td>8006</td>
<td>0</td>
<td>0</td>
<td>8700</td>
</tr>
<tr class="odd">
<td>For Processing</td>
<td>550</td>
<td>480</td>
<td>550</td>
<td>650</td>
<td>0</td>
<td>650</td>
<td>0</td>
<td>0</td>
<td>650</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>8057</td>
<td>8053</td>
<td>8057</td>
<td>9005</td>
<td>0</td>
<td>9027</td>
<td>0</td>
<td>0</td>
<td>9740</td>
</tr>
</tbody>
</table>

Note: Processing citrus covers mainly canned citrus and producing one MT
of canned citrus needs about 1.5 MT of fresh mandarins.

#### Trade Matrices for Fresh Tangerines

  -------------------- ----------------------- -------------------- --------------
  **Import Trade                                                    
  Matrix**                                                          

  **Country**          China, Peoples Republic                      
                       of                                           

  **Commodity**        Tangerines/Mandarins,                        
                       Fresh                                        

  Time Period          Oct-Sept                Units:               MT

  Imports for:         2005                                         **2006**

  U.S.                 214                     U.S.                 3

  Others                                       Others               

  Thailand             5439                    New Zealand          16185

  Australia            542                     Uruguay              3974

  Argentina            266                     Thailand             3964

  Chile                224                     Australia            1850

  Taiwan               104                     Myanmar              505

  New Zealand          26                      Argentina            359

                                               Chile                358

                                               South Africa         103

                                               Taiwan               14

                                                                    

  Total for Others     6601                                         27312

  Others not Listed    0                                            1

  Grand Total          6815                                         27316
  -------------------- ----------------------- -------------------- --------------

Source: China Customs Data

  -------------------- ----------------------- -------------------- --------------
  **Export Trade                                                    
  Matrix**                                                          

  **Country**          China, Peoples Republic                      
                       of                                           

  **Commodity**        Tangerines/Mandarins,                        
                       Fresh                                        

  Time Period          Oct-Sept                Units:               MT

  Exports for:         2005                                         **2006**

  U.S.                 24                      U.S.                 0

  Others                                       Others               

  Vietnam              100486                  Vietnam              74232

  Malaysia             76925                   Malaysia             72652

  Indonesia            40777                   Indonesia            59300

  Russia               36980                   Russia               50637

  Philippines          27375                   Philippines          35616

  Hong Kong            20465                   Hong Kong            31902

  Canada               18866                   Canada               21774

  Singapore            8188                    Singapore            12189

  Kyrgyzstan           2196                    Kyrgyzstan           3672

  North Korea          1714                    Mongolia             1749

  Total for Others     333972                                       363723

  Others not Listed    3867                                         6855

  Grand Total          337863                                       370578
  -------------------- ----------------------- -------------------- --------------

Source: China Customs Data

#### Export Prices for Fresh Tangerines

  ------------------------ ----------------------- --------------- ---------------
  **Prices Table**                                                 

  **Country**              China, Peoples Republic                 
                           of                                      

  **Commodity**            Tangerines/Mandarins,                   
                           Fresh                                   

  Prices in                US\$                    per uom         MT

                                                                   

  Year                     2006                    2007            \% Change

  Jan                      330                     440             33%

  Feb                      280                     420             50%

  Mar                      290                     420             45%

  Apr                      330                     390             18%

  May                      190                     320             68%

  Jun                      170                     300             76%

  Jul                      1340                    230             -83%

  Aug                      790                     840             6%

  Sep                      500                     490             -2%

  Oct                      410                     360             -12%

  Nov                      360                     N/A             

  Dec                      400                     N/A             

                                                                   

  Exchange Rate            7.5/1.00                Local           
                                                   Currency/US \$  

  Date of Quote            11/26/2007              MM/DD/YYYY      
  ------------------------ ----------------------- --------------- ---------------

Source: China Customs Data

### Fresh Grapefruit/Pomelos

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><strong>PSD Table</strong></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="9"><strong>China, Peoples Republic of</strong></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="9"><p><strong>Grapefruit, Fresh</strong></p>
<p>(HECTARES)(1000 TREES)(1000 MT)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>10/2005</td>
<td>10/2005</td>
<td></td>
<td>10/2006</td>
<td>10/2006</td>
<td></td>
<td>10/2007</td>
<td>10/2007</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Non-Bearing Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total No. Of Trees</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Production</td>
<td>1867</td>
<td>1867</td>
<td>1867</td>
<td>2020</td>
<td>2020</td>
<td>2025</td>
<td>0</td>
<td>0</td>
<td>2230</td>
</tr>
<tr class="odd">
<td>Imports</td>
<td>4</td>
<td>4</td>
<td>4</td>
<td>5</td>
<td>5</td>
<td>3</td>
<td>0</td>
<td>0</td>
<td>3</td>
</tr>
<tr class="even">
<td>Total Supply</td>
<td>1871</td>
<td>1871</td>
<td>1871</td>
<td>2025</td>
<td>2025</td>
<td>2028</td>
<td>0</td>
<td>0</td>
<td>2233</td>
</tr>
<tr class="odd">
<td>Exports, Fresh</td>
<td>27</td>
<td>27</td>
<td>27</td>
<td>60</td>
<td>60</td>
<td>51</td>
<td>0</td>
<td>0</td>
<td>110</td>
</tr>
<tr class="even">
<td>Fresh Dom. Consumption</td>
<td>1844</td>
<td>1844</td>
<td>1844</td>
<td>1965</td>
<td>1965</td>
<td>1977</td>
<td>0</td>
<td>0</td>
<td>2123</td>
</tr>
<tr class="odd">
<td>For Processing</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>1871</td>
<td>1871</td>
<td>1871</td>
<td>2025</td>
<td>2025</td>
<td>2028</td>
<td>0</td>
<td>0</td>
<td>2233</td>
</tr>
</tbody>
</table>

#### Trade Matrices for Fresh Grapefruit/Pomelos

  -------------------- -------------- -------------------- --------------
  **Import Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Grapefruit,                         
                       Fresh                               

  Time Period          Oct-Sept       Units:               MT

  Imports for:         2005                                **2006**

  U.S.                 274            U.S.                 408

  Others                              Others               

  Thailand             2565           Thailand             1607

  Taiwan               746            Taiwan               773

  Argentina            24             South Africa         184

                                      Argentina            110

                                      Japan                100

                                      Spain                45

                                      Israel               3

                                                           

  Total for Others     3335                                2822

  Others not Listed    1                                   0

  Grand Total          3610                                3230
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

  -------------------- -------------- -------------------- --------------
  **Export Trade                                           
  Matrix**                                                 

  **Country**          China, Peoples                      
                       Republic of                         

  **Commodity**        Grapefruit,                         
                       Fresh                               

  Time Period          Oct-Sept       Units:               MT

  Exports for:         2005                                **2006**

  U.S.                 0              U.S.                 0

  Others                              Others               

  Hong Kong            7127           Netherlands          17161

  Russia               7044           Russia               15282

  Netherlands          3836           Hong Kong            4481

  Canada               3607           Belgium              2852

  Belgium              1309           Canada               2671

  France               669            Malaysia             1271

  Macau                583            Romania              1144

  Malaysia             504            Philippines          1046

  Philippines          465            Germany              1013

  Singapore            441            Singapore            725

  Total for Others     25585                               47646

  Others not Listed    1200                                2905

  Grand Total          26785                               50551
  -------------------- -------------- -------------------- --------------

Source: China Customs Data

#### Export Prices for Fresh Grapefruit/Pomelos

  ------------------------ ---------------- --------------- ---------------
  **Prices Table**                                          

  **Country**              China, Peoples                   
                           Republic of                      

  **Commodity**            Grapefruit,                      
                           Fresh                            

  Prices in                US\$             per uom         MT

                                                            

  Year                     2006             2007            \% Change

  Jan                      350              580             66%

  Feb                      280              550             96%

  Mar                      180              400             122%

  Apr                      170              370             118%

  May                      140              160             14%

  Jun                      130              130             0%

  Jul                      130              130             0%

  Aug                      490              400             -18%

  Sep                      530              580             9%

  Oct                      530              620             17%

  Nov                      530              N/A             

  Dec                      540              N/A             

                                                            

  Exchange Rate            7.5/1            Local           
                                            Currency/US \$  

  Date of Quote            11/16/2007       MM/DD/YYYY      
  ------------------------ ---------------- --------------- ---------------

Source: China Customs Data

#