Voluntary Report - public distribution

**Date:** 12/31/2003

**GAIN Report Number:** CH3135

CH3135

**China, Peoples Republic of**

**Asparagus**

**Situation**

**2003**

**Approved by:**

![](media/image1.wmf)Maurice W. House

U.S. Embassy, Beijing

**Prepared by:**

Casey E. Bean, Adam Branson

**Report Highlights:**

Resulting from dynamic changes occurring in China's export oriented
asparagus industry, FAS Beijing provides the following report-the first
of its kind on China's asparagus industry. This report, although based
on far different production data from US industry reports, concurs that
China has emerged as a dominant exporter of fresh and processed white
and green asparagus. Reports indicate summer flooding may have damaged
growing areas and demand for imported asparagus seed is strong. China's
2002 exports of fresh and processed asparagus were up sharply to roughly
2,000 MT and 107,000 MT, respectively. Exports in 2003, however, are
down compared to the previous year, as are prices.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[MOA Production and Acreage Vastly Different from UN FAO Data
3](#moa-production-and-acreage-vastly-different-from-un-fao-data)

[Yields, Growing Areas, Seed Research, and Standards
3](#yields-growing-areas-seed-research-and-standards)

[Food Safety Concerns and Maximum Residue Limits
5](#food-safety-concerns-and-maximum-residue-limits)

[Price Information for Growers and Traders
5](#price-information-for-growers-and-traders)

[Large but Declining Exports of Fresh and Processed Asparagus
6](#large-but-declining-exports-of-fresh-and-processed-asparagus)

[PSDTables 7](#psdtables)

[Production 7](#production)

[Price Data 7](#price-data)

[Export Trade Data 8](#export-trade-data)

# Executive Summary

Although China is the world's largest asparagus producer, the Chinese
Ministry of Agriculture considers the vegetable a minor crop and there
is little recorded information publicly available. Much of China's
asparagus production is contracted for processing and exports rather
than the domestic market. Industry sources indicate the three to five
year production outlook depends largely upon China's export market
access to developed nations with stringent sanitary import controls.
Therefore, a concerted effort is being made to improve asparagus
sanitary quality and keep asparagus and other vegetable export markets
open.

Fresh asparagus exports increased 34 percent over the last three years
from 2000 to 2002 while processed exports increased 20 percent. In the
first 11 months of 2003, however, exports to several European countries
are lower as demand for Chinese asparagus appears to be falling. With
less demand, export prices have fallen and will likely be passed along
to growers making asparagus production less desirable. As such, many
growers may choose to plant other vegetable and horticultural crops with
greater marketing potential unless domestic demand increases or China
develops, opens, and competes in other export markets with the US, Peru,
or other producing nations to make maintaining asparagus fields
profitable.

# MOA Production and Acreage Vastly Different from UN FAO Data

Official 2003 estimates from China's Ministry of Agriculture (MOA) for
asparagus production are not yet available. MOA estimates last year's,
2002, production at 507,900 metric tons (MT) on 42,980 hectares (Ha) of
land. This was a decrease from MOA's recorded 2001 production of 622,300
MT on 44,540 Ha. MOA's production volume and planted area for 2002 and
2001 are significantly lower than UN FAO estimated production and
planted area which were 4,357,365 MT on 1,021,538 Ha in 2002 and
4,207,365 MT on 961,538 Ha in 2001.

The significant difference between MOA data, which indicates declining
production, and the UN FAO data, indicating increased production at
levels eight and one-half times greater than MOA data, suggests further
exploration of the industry would be valuable during China's asparagus
growing season of mid-April to September or October. Until then,
however, it is possible that using UN FAO data, as was done in US
government and industry reports, may overstate the threat posed from
China's asparagus industry as most Chinese industry sources indicate MOA
data may be more reliable as China's asparagus production is contracted
and most growers would not produce much asparagus without dedicated
buyers looking to export.

# Yields, Growing Areas, Seed Research, and Standards

The principle asparagus production provinces (areas with greater than
5,000 Ha planted) are Hebei, Shanxi, Jiangsu, Fujian, and Henan.
Shandong province is also a large asparagus producer by volume and
planted area, but the province was not listed as one of the growing
regions with planted area greater than 5,000 Ha, possibly because
Shandong production areas border Henan and Jiangsu provinces. Reports
indicate planting area changes in many of these key growing areas stems
from growers converting asparagus lands to other higher priced
vegetables or higher yielding vegetable crops that require less
management or less water and inputs.

Existing asparagus plantings are comparatively dense and high yielding
with reports indicating 1 mu of land (one-fifteenth a hectare) able to
support 20,000 asparagus shoots and yield between 1.2 to 2.0 MT of cut
asparagus per mu (or, 18 -- 30 MT/Ha). Growers land holdings, however,
are very small and most vegetable plots occur only in small strips of
land between large row crops. Still, despite the limits to production,
Chinese asparagus yields are among the highest in the world as Chinese
labor is abundant, inexpensive, and growers are able to provide
management and inputs necessary for higher yields.

According to MOA data, nationwide yields decreased from 13.97 MT/Ha to
11.82 MT/Ha from 2001 to 2002 as weather related problems limited
production. These yields are much greater than yields indicated in GAIN
reports for other asparagus producing nations like Peru (10-11 MT/Ha),
Japan (4.1 MT/Ha), Mexico (3.4-4 MT/Ha) or the UK (2.1 MT/Ha). Flooding
along key asparagus growing fields near the Yellow River lowered 2003
yields, as well. As such, many growers will have to re-plant asparagus
fields and 2003 production and yields could be lower for the next few
years as Chinese growers do not typically cut asparagus shoots for the
first two years after planting.

Researchers at the Chinese Asparagus Research Center in Weifang,
Shandong Province report most asparagus is harvested from April through
September with milder climates capable of harvesting small volumes in a
second cutting from September to as late as November. The center
conducts research work on suitable asparagus seed varieties for China.
On March 18, 2004 the center reports it will convene the Second Annual
Chinese Asparagus Seed Forum/Convention where researchers will likely
exchange the latest information on hybrid asparagus seed development.
Presently, the center website
([www.lusunchina.com](http://www.lusunchina.com/)) provides introductory
comparisons between four predominant Chinese asparagus varieties
(Shandong Asparagus Seed No. 1, 88-5, Asparagus Prince F1, and 2000-X)
and a few foreign seed varieties (e.g. Mary Washington 500W, UC800, and
UC157F2).

Meeting with China's Canned Food Industry Association (CCFIA) revealed
that 80 percent of asparagus production is white and discussions with
industry sources indicates most white asparagus production is in the
southern Chinese provinces of Fujian, near the city of Xiamen or near
Jiangsu near the city of Nantong. White varieties require significant
labor input from farmers to monitor growth ensuring that shoots have not
broken through the soil or the piling up of soil on top of shoots.
Production is often under contract with processors for peeling, canning
and bottling, and exported to European destinations. Most canneries do
not package products under their own name, but instead, package and
label processed asparagus with customers' foreign brand names. Industry
sources report southern asparagus can be harvested two times a year. The
first harvest is usually from May to June with an additional harvest
from September to November. Industry members report, however, the second
harvest is often of lesser yield and poorer quality.

According to industry sources, northern asparagus production is
primarily green or green/violet asparagus and comes from the areas of
Shandong or Shanxi. Shandong asparagus is often produced for the
Japanese market around Qingdao and must be of "extra" quality that is
unpeeled and extremely tender. Government officials indicate Shanxi
asparagus production is in the southwestern corner of the province near
the 90-degree bend in the Yellow River that puts the river on its course
into eastern China. Reports indicate that a significant amount of the
province asparagus production was fast-frozen (possibly IQF).

Different Chinese government agencies (i.e. MOA, Ministry of Health, the
State Environmental Protection Administration) developed standards for
"green food," "wholesome food," and "pollutant/pesticide free food" in
order to improve fruit quality and safety. However, no single
standard/certification dominates the production market. Growers and
scientists identify the MOA wholesome food standard as more practical
and less costly for growers and as such could become the leading
production guideline. This standard, however, allows growers to use
pesticides and agri-chemicals and the products are not considered
organic.

# Food Safety Concerns and Maximum Residue Limits 

The Chinese Government is placing increased emphasis on food product
safety, the quality of agricultural produce, and the protection of the
environment. Industry sources indicate much of the food safety concern
relates to agricultural inputs and the increasingly stringent product
requirements or maximum residue limits from EU countries and Japan.
However, Chinese consumers are increasingly aware of the misuse and
abuse of agri-chemical inputs along with extraneous residues from
elements or other naturally occurring metals on vegetables and other
food products. As such, grower education and agricultural technology
extension efforts have led to increased publication of "how to" reports
along with possibly contributing to the promulgation of new sanitary and
phytosanitary measures.

In October 2003, China drafted sanitary measures for the maximum limits
of pesticides on all food products. The limits, seemingly equivalent to
CODEX alimentarius standards, for the following pesticides were
published for asparagus and vegetables with stalks (e.g. asparagus,
celery, artichokes):

Carbendazim -- 0.1 mg/kg

Chlorpyrifos - 0.05 mg/kg

Dichlorvos - 0.2 mg/kg

Dimethoate - 0.5 mg/kg

HCH - 0.05 mg/kg

Additional draft regulations covering fresh and canned vegetables
maximum limits of arsenic (CH3026), cadmium (CH3029), chromium (CH3030),
copper (CH3031), fluorine (CH3033), iron (CH3034), lead (CH3035),
mercury (CH3036), nitrites (CH3038), rare earth (CH3041), selenium
(CH3042), and zinc (CH3043) were recently published. The US Government
responded to the drafted regulations indicating that many of the limits
China is ready to impose are for items where there are no international
standards.

# Price Information for Growers and Traders

MOA reports little information on farmgate and wholesale asparagus
prices and the prices vary by quality, season, and geographic region.
Reports from MOA and provincial agricultural bureaus websites
(www.agri.gov.cn) indicate September 2002 average grower incomes in
Henan Province for asparagus production were around US \$322 per MT or
US \$5,800 per hectare on yields of 18 MT/Ha. In Shandong, reports
indicate growers could receive between US \$475 to US \$650 per MT or US
\$12,700 to US \$14,500 per hectare on production of 22.5 MT/Ha to 27
MT/ha (note: most growers have only a fraction of a hectare planted with
asparagus). Through the first 11 months of 2003, Chinese fresh asparagus
export prices averaged US \$1210 per MT while processed asparagus
exports averaged US \$960 per MT.

# Large but Declining Exports of Fresh and Processed Asparagus

Chinese fresh and processed asparagus exports peak from May to October
with the largest export volumes in June, July, and August. In 2002,
China exported 2,073 MT of fresh asparagus and 106,866 MT of processed
asparagus. Presently, the top five markets for Chinese asparagus are
Germany, Spain, Japan, the Netherlands, and the United States. Germany
and Japan, however, both imported significantly lower volumes through
the first 11 months of 2003 resulting in fresh asparagus export
declines. The top five importers of processed asparagus are Spain,
Germany, the Netherlands, France, and Japan. Processed asparagus exports
are significantly lower, as well, as Germany and Spain imported much
lower volumes from January through November.

The ports of Qingdao and Shanghai accounted for approximately 93 percent
of fresh asparagus exports by value in 2002 and 91 percent of exports
through November 2003. As for processed asparagus exports, Qingdao and
Xiamen accounted for approximately 90 percent of the volume and value of
exports in 2002 and nearly 92 percent of the volume and value through
the first 11 months of 2003.

Chinese fresh (HTS 070920) and canned/jarred (HTS 200560) asparagus
imports are limited. China Customs recorded canned/jarred asparagus
imports in 2002 when traders in Xiamen, China re-introduced near 30 MT
of processed asparagus into China that apparently had been in bonded
storage. Determining whether this product was consumed in China or later
exported to other markets is impossible. In the first ten months of
2003, approximately 10 MT of fresh asparagus entered Kunming, China from
Thailand.

# PSDTables

## Production

  -------------------- ------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                  

  **Country**          **China,                                                  
                       Peoples                                                   
                       Republic of**                                             

  **Commodity**        **Fresh                                        (HA)(MT)   
                       Asparagus**                                               

                       2001          Revised    2002       Estimate   2003       Forecast

                       USDA Official Post       USDA       Post       USDA       Post
                       \[Old\]       Estimate   Official   Estimate   Official   Estimate
                                     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                      01/2002               01/2003               01/2004
  Begin**                                                                        

  Area Planted         0             44540      0          42980      0          43000

  Area Harvested       0             44540      0          42980      0          43000

  TOTAL Production     0             622300     0          507900     0          515000

  Imports, Fresh       0             1          0          10         0          10

  TOTAL SUPPLY         0             622301     0          507910     0          515010

  Exports, Fresh       0             2073       0          1600       0          1800

  Domestic Fresh       0             510228     0          406310     0          413210
  Market                                                                         

  For Processing       0             110000     0          100000     0          100000

  TOTAL UTILIZATION    0             622301     0          507910     0          515010
  -------------------- ------------- ---------- ---------- ---------- ---------- ----------

## Price Data

Note: Listed prices are Chinese worldwide average export prices for each
month. Wholesale and farmgate prices are not published.

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

  **Country**              China, Peoples                  
                           Republic of                     

  **Commodity**            Fresh Asparagus                 

  Prices in                US \$           per uom         MT

                                                           

  Year                     2002            2003            \% Change

  Jan                      640             1200            88%

  Feb                      350             1050            200%

  Mar                      2560            1450            -43%

  Apr                      1540            1580            3%

  May                      1410            1330            -6%

  Jun                      1390            1360            -2%

  Jul                      1520            1270            -16%

  Aug                      1380            1110            -20%

  Sep                      1290            950             -26%

  Oct                      1220            1090            -11%

  Nov                      1180            1240            5%

  Dec                      1260            NA              #VALUE!

                                                           

  Exchange Rate            8.3             Local           
                                           Currency/US \$  

  Date of Quote            1/2/2004        MM/DD/YYYY      
  ------------------------ --------------- --------------- ---------------

## Export Trade Data

<table>
<colgroup>
<col style="width: 14%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><strong>China's Fresh Asparagus (070920) Exports by
Destination (Volume: MT) (Value: Million USD)</strong></td>
</tr>
<tr class="even">
<td rowspan="3"></td>
<td colspan="2"><strong>2000</strong></td>
<td colspan="2"><strong>2001</strong></td>
<td colspan="2"><strong>2002</strong></td>
<td colspan="2"><strong>2002</strong></td>
<td colspan="2"><strong>2003</strong></td>
</tr>
<tr class="odd">
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
</tr>
<tr class="even">
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
</tr>
<tr class="odd">
<td><strong>Germany</strong></td>
<td>238</td>
<td>$0.349</td>
<td>714</td>
<td>$0.869</td>
<td>1,105</td>
<td>$1.559</td>
<td>1,000</td>
<td>$1.419</td>
<td>597</td>
<td>$0.792</td>
</tr>
<tr class="even">
<td><strong>Spain</strong></td>
<td>297</td>
<td>$0.366</td>
<td>47</td>
<td>$0.030</td>
<td>225</td>
<td>$0.222</td>
<td>196</td>
<td>$0.192</td>
<td>376</td>
<td>$0.347</td>
</tr>
<tr class="odd">
<td><strong>Japan</strong></td>
<td>516</td>
<td>$0.825</td>
<td>364</td>
<td>$0.707</td>
<td>301</td>
<td>$0.498</td>
<td>299</td>
<td>$0.494</td>
<td>168</td>
<td>$0.283</td>
</tr>
<tr class="even">
<td><strong>Netherlands</strong></td>
<td>106</td>
<td>$0.076</td>
<td>48</td>
<td>$0.045</td>
<td>202</td>
<td>$0.290</td>
<td>181</td>
<td>$0.265</td>
<td>136</td>
<td>$0.140</td>
</tr>
<tr class="odd">
<td><strong>U.S.</strong></td>
<td>8</td>
<td>$0.015</td>
<td>19</td>
<td>$0.016</td>
<td>29</td>
<td>$0.023</td>
<td>6</td>
<td>$0.003</td>
<td>54</td>
<td>$0.046</td>
</tr>
<tr class="even">
<td><strong>All Others</strong></td>
<td>186</td>
<td>$0.140</td>
<td>192</td>
<td>$0.215</td>
<td>211</td>
<td>$0.258</td>
<td>173</td>
<td>$0.201</td>
<td>106</td>
<td>$0.135</td>
</tr>
<tr class="odd">
<td><strong>World</strong></td>
<td>1,351</td>
<td>$1.771</td>
<td>1,384</td>
<td>$1.882</td>
<td>2,073</td>
<td>$2.850</td>
<td>1,855</td>
<td>$2.575</td>
<td>1,437</td>
<td>$1.741</td>
</tr>
<tr class="even">
<td colspan="3">Source: China Customs</td>
<td colspan="8">Some volumes and values may not match due to
rounding</td>
</tr>
<tr class="odd">
<td colspan="11"></td>
</tr>
<tr class="even">
<td colspan="11"><strong>China's Processed Asparagus (200560) Exports by
Destination (Volume: MT) (Value: Million USD)</strong></td>
</tr>
<tr class="odd">
<td rowspan="3"></td>
<td colspan="2"><strong>2000</strong></td>
<td colspan="2"><strong>2001</strong></td>
<td colspan="2"><strong>2002</strong></td>
<td colspan="2"><strong>2002</strong></td>
<td colspan="2"><strong>2003</strong></td>
</tr>
<tr class="even">
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Dec</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
<td><strong>Jan-Nov</strong></td>
</tr>
<tr class="odd">
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
<td><strong>Volume</strong></td>
<td><strong>Value</strong></td>
</tr>
<tr class="even">
<td><h2 id="spain">Spain</h2></td>
<td>13,703</td>
<td>$13.314</td>
<td>22,827</td>
<td>$22.070</td>
<td>31,545</td>
<td>$35.212</td>
<td>30,600</td>
<td>$34.078</td>
<td>26,623</td>
<td>$28.077</td>
</tr>
<tr class="odd">
<td><strong>Germany</strong></td>
<td>27,544</td>
<td>$19.900</td>
<td>27,730</td>
<td>$20.198</td>
<td>29,441</td>
<td>$25.391</td>
<td>27,805</td>
<td>$23.877</td>
<td>22,474</td>
<td>$18.032</td>
</tr>
<tr class="even">
<td><strong>Netherlands</strong></td>
<td>17,273</td>
<td>$15.982</td>
<td>17,278</td>
<td>$13.883</td>
<td>17,602</td>
<td>$17.039</td>
<td>16,516</td>
<td>$15.899</td>
<td>19,212</td>
<td>$17.076</td>
</tr>
<tr class="odd">
<td><strong>France</strong></td>
<td>5,125</td>
<td>$5.271</td>
<td>7,366</td>
<td>$7.204</td>
<td>7,560</td>
<td>$8.405</td>
<td>7,127</td>
<td>$7.904</td>
<td>7,390</td>
<td>$8.078</td>
</tr>
<tr class="even">
<td><strong>Japan</strong></td>
<td>6,187</td>
<td>$9.053</td>
<td>5,679</td>
<td>$7.626</td>
<td>5,380</td>
<td>$7.395</td>
<td>5,073</td>
<td>$6.963</td>
<td>4,624</td>
<td>$6.223</td>
</tr>
<tr class="odd">
<td><strong>Denmark</strong></td>
<td>2,616</td>
<td>$1.453</td>
<td>2,820</td>
<td>$1.648</td>
<td>2,816</td>
<td>$1.886</td>
<td>2,639</td>
<td>$1.756</td>
<td>2,498</td>
<td>$1.637</td>
</tr>
<tr class="even">
<td><strong>Belgium</strong></td>
<td>1,662</td>
<td>$1.376</td>
<td>1,503</td>
<td>$1.137</td>
<td>1,429</td>
<td>$1.354</td>
<td>1,317</td>
<td>$1.223</td>
<td>1,686</td>
<td>$1.575</td>
</tr>
<tr class="odd">
<td><strong>Sweden</strong></td>
<td>1,699</td>
<td>$1.317</td>
<td>1,532</td>
<td>$1.045</td>
<td>1,414</td>
<td>$1.098</td>
<td>1,351</td>
<td>$1.055</td>
<td>1,414</td>
<td>$1.219</td>
</tr>
<tr class="even">
<td><strong>Australia</strong></td>
<td>632</td>
<td>$0.926</td>
<td>1,105</td>
<td>$1.555</td>
<td>1,376</td>
<td>$1.946</td>
<td>1,145</td>
<td>$1.638</td>
<td>1,282</td>
<td>$1.741</td>
</tr>
<tr class="odd">
<td><strong>Italy</strong></td>
<td>1,120</td>
<td>$0.916</td>
<td>1,402</td>
<td>$1.058</td>
<td>1,430</td>
<td>$1.334</td>
<td>1,266</td>
<td>$1.174</td>
<td>1,100</td>
<td>$1.022</td>
</tr>
<tr class="even">
<td><strong>U.S.</strong></td>
<td>571</td>
<td>$0.497</td>
<td>571</td>
<td>$0.565</td>
<td>519</td>
<td>$0.569</td>
<td>453</td>
<td>$0.484</td>
<td>1,025</td>
<td>$1.085</td>
</tr>
<tr class="odd">
<td><strong>All Others</strong></td>
<td>5,405</td>
<td>$4.466</td>
<td>6,186</td>
<td>$5.002</td>
<td>6,353</td>
<td>$6.287</td>
<td>5,981</td>
<td>$5.835</td>
<td>5,852</td>
<td>$5.584</td>
</tr>
<tr class="even">
<td><strong>World</strong></td>
<td>83,537</td>
<td>$74.472</td>
<td>95,998</td>
<td>$82.990</td>
<td>106,866</td>
<td>$107.916</td>
<td>101,272</td>
<td>$101.886</td>
<td>95,180</td>
<td>$91.348</td>
</tr>
<tr class="odd">
<td colspan="3">Source: China Customs</td>
<td colspan="8">Some volumes and values may not match due to
rounding</td>
</tr>
</tbody>
</table>