Required Report - public distribution

**Date:** 9/15/2004

**GAIN Report Number:** CH4033

CH4033

**China, Peoples Republic of**

**Fresh Deciduous Fruit**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Ralph Gifford

U.S. Embassy, Beijing

**Prepared by:**

Adam Branson, Wu Bugang, and Casey E. Bean

**Report Highlights:**

China, the world's largest producer and consumer of apples, pears, and
grapes, accounts for 50% of world apple production, 65% of world pear
production, and 40% of world table grape production. Year 2004 apple
production should be lower, at 20.2 MMT, following last year's peak in
the production cycle, while pear and grape volumes should increase to
10.2 MMT and 5.6 MMT on expanded planting and better yields. CAJ
production is also higher, at 560 KMT, on expanded capacity and high
world demand. Traded volume in relation to production is relatively
small yet growing fast. Fruit imports by dollar value increased over the
past year while overall volumes decreased. Exports continue fast growth
as prices, although rising, remain low compared to other suppliers, new
markets open, and quality improves. CAJ exports continue booming and
account for 90% of production use. Recently issued fruit entry
requirements could impact trade of all deciduous fruit, especially
re-exports from Hong Kong to China.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table 0f Contents

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

[Production 4](#production)

[Apple, Pear, and Grape Production, Area, and Primary Cultivars
4](#apple-pear-and-grape-production-area-and-primary-cultivars)

[Concentrated Apple Juice (CAJ) 5](#concentrated-apple-juice-caj)

[Consumption 6](#consumption)

[Climbing Fruit Purchases and Consumption in Urban Areas
6](#climbing-fruit-purchases-and-consumption-in-urban-areas)

[Buying Habits Shifting from Wet-Markets to Retail Hypermarkets
6](#buying-habits-shifting-from-wet-markets-to-retail-hypermarkets)

[Consumer's Fruit Purchasing Preferences
6](#consumers-fruit-purchasing-preferences)

[Regional Branding Impacting Consumer Purchases
6](#regional-branding-impacting-consumer-purchases)

[Booming CAJ and Other Juice Drink Consumption
7](#booming-caj-and-other-juice-drink-consumption)

[Trade 7](#trade)

[Apple Imports Climb While Exports Jump Nearly 150 Percent
8](#apple-imports-climb-while-exports-jump-nearly-150-percent)

[Pear Exports Maintain Stable Growth
8](#pear-exports-maintain-stable-growth)

[Southern Hemisphere Grapes Welcomed in China While Domestic Exports
Expand
9](#southern-hemisphere-grapes-welcomed-in-china-while-domestic-exports-expand)

[CAJ Export Prospects Remain Bright as World Demand Grows
9](#caj-export-prospects-remain-bright-as-world-demand-grows)

[Stocks 9](#stocks)

[Cold Storage Expansion Allows Better, Larger Inventory Throughout the
Year
9](#cold-storage-expansion-allows-better-larger-inventory-throughout-the-year)

[Policy 10](#policy)

[Revised Entry Requirements for Fresh Fruit Likely to Impact and Impede
Trade
10](#revised-entry-requirements-for-fresh-fruit-likely-to-impact-and-impede-trade)

[Drafted MRLs Designed to Improve Food Quality May Hurt Imports
10](#drafted-mrls-designed-to-improve-food-quality-may-hurt-imports)

[Lower Tariff and VAT Rates for 2004 Imported Deciduous Fruits
11](#lower-tariff-and-vat-rates-for-2004-imported-deciduous-fruits)

[Marketing 11](#marketing)

[South China Key, but Eyes Turning North to Expanded Consumer Base
11](#south-china-key-but-eyes-turning-north-to-expanded-consumer-base)

[Deciduous Fruit Production Photos
12](#deciduous-fruit-production-photos)

[Shandong Apples, Hebei Pears, Xinjiang Grapes
12](#shandong-apples-hebei-pears-xinjiang-grapes)

[China Map for USDA ATO Marketing Region and Production Areas
13](#china-map-for-usda-ato-marketing-region-and-production-areas)

[USDA ATO and Cooperators Contact Information
13](#usda-ato-and-cooperators-contact-information)

[Production, Supply, and Demand (PSD) Tables
14](#production-supply-and-demand-psd-tables)

[Apples 14](#apples)

[Apple Trade Matrix Tables 15](#apple-trade-matrix-tables)

[Apple Average National Chinese Export Price Table
16](#apple-average-national-chinese-export-price-table)

[Fuji Apple Wholesale Market and All Apple Export Price Comparison
16](#fuji-apple-wholesale-market-and-all-apple-export-price-comparison)

[Concentrated Apple Juice (CAJ) 17](#concentrated-apple-juice-caj-1)

[CAJ Trade Matrix 18](#caj-trade-matrix)

[CAJ Average National Chinese Export Price Table
19](#caj-average-national-chinese-export-price-table)

[Pears 20](#pears)

[Pear Trade Matrix Tables 21](#pear-trade-matrix-tables)

[Pear Average National Chinese Export Price Table
22](#pear-average-national-chinese-export-price-table)

[Ya Pear Wholesale Market and Ya and Snow Pear Export Price Comparison
22](#ya-pear-wholesale-market-and-ya-and-snow-pear-export-price-comparison)

[Grapes 23](#grapes)

[Grape Trade Matrix Tables 24](#grape-trade-matrix-tables)

[Grape Average National Chinese Export Price Table
25](#grape-average-national-chinese-export-price-table)

[Red Globe Grape Wholesale Market and All Grape Import Price Comparison
25](#red-globe-grape-wholesale-market-and-all-grape-import-price-comparison)

[Historical Production Tables 26](#historical-production-tables)

[2003 Fruit Production Comparison for Apples, Pears, Grapes, Citrus and
Peaches
26](#fruit-production-comparison-for-apples-pears-grapes-citrus-and-peaches)

[1999-2003 China Apple, Pear, and Grape Production (1000 Ha and MT) by
Province
27](#china-apple-pear-and-grape-production-1000-ha-and-mt-by-province)

[Consumption Tables 30](#consumption-tables)

[Urban Resident Per Capita Income and Expenditures
30](#urban-resident-per-capita-income-and-expenditures)

[Per Capita 2002 Purchases by Urban Residents Per Capita Income Level
31](#per-capita-2002-purchases-by-urban-residents-per-capita-income-level)

[Per Capita Historical Purchases by Urban Residents Across Commodity
Comparison
31](#per-capita-historical-purchases-by-urban-residents-across-commodity-comparison)

# Executive Summary

China is the world's largest producer and consumer of apples, pears, and
grapes accounting for approximately 50% of world apple production, 65%
of world pear production and 40% of world table grape production. Yet
traded volume in relation to production is relatively small but is
growing. In 2003, China exported approximately 3% of its apples, 3% of
its pears, and 0.3% of its grape production. In contrast, the United
States exported 13% of its apples, 19% of its pears, and 40% of its
table grapes in 2003.

Chinese agricultural officials are encouraging growers to improve
competitiveness so that fruit can be available over a longer period of
time, be of better quality (with respect to appearance, taste, and food
safety aspects) and consist of more desirable and commercial cultivars
demanded on the world market. Growers appear to be taking these
encouragements to heart: the trend for the past few years has been the
growth of large-scale, integrated commercial packinghouses and trading
enterprises, some of which are foreign invested, that contract with
growers to produce certain cultivars and manage orchards and inputs so
as to supply better quality and more desirable fruit.

This consolidation and quality improvement trend has made fruit exports
and sourcing for nationwide domestic retailers more convenient, as
production scales are larger, cost efficiencies better, and fruit
quality, size and appearance more uniform. In the coming years, industry
sources expect increasing sales to foreign markets with stringent food
safety standards and fussier consumers. Nevertheless, a large number of
fruit traders who handle lower quality and lower priced fruits still
compete aggressively for export markets. This sector of the trade does
not maintain such strict phytosanitary requirements, and its customers
have lower incomes and are not as demanding.

China's juice production capacity has grown rapidly in recent years with
significant new plant construction and improvement of existing
facilities. Concentrated apple juice (CAJ) manufacturers are facing
greater domestic competition for low cost apples as capacity grows and
as domestic fresh fruit quality improves and fresh fruit export markets
grow. CAJ manufacturers had been able to rely on abundant low-cost
low-grade fruit, but most manufacturers are now turning to slightly
better grade apples. Although not widespread, a few of the larger
integrated companies are beginning to plant cultivars specifically for
processing, e.g. high-sour apples for juicing. CAJ exports remain strong
and still account for nearly 90 percent of production, yet domestic
consumption of juices and juice drinks keeps rising as well.

Although China continues to import U.S. deciduous fruit, an increasing
share of trade enters from the Southern hemisphere during periods when
it can arrive fresh and not compete with domestic product. Industry
sources report that Northern hemisphere fruit still arrives, but is
typically imported only when it does not compete with domestic fruit,
when prices are lower than Southern hemisphere fruit, or during Chinese
festivals and holidays. Importers still seek competitive prices, but
growing consumption and sophisticated marketing of domestic and imported
fresh fruits means more consumers are more willing to pay higher prices.
Ministry of Agriculture (MOA) wholesale market information indicates
fruit prices increased over the past year. However, this may only
reflect the sharp price jump for the entire food basket price.

China's agriculture policy reforms target increased and altered
production, improved food safety, and expanded trade. Furthermore, early
in the year the central government called for reducing or eliminating
agricultural taxes and the specialty agricultural product tax (which
includes deciduous fruit) in order to stimulate rural income growth.
Implementing the plan is difficult because of the many levels of
government involved, each of which has a different interpretation and
perspective on the issue. As of late July, fruit growers in Shandong had
not heard about the decision and expected to pay taxes after harvest.

Recently drafted pesticide maximum residue limits (MRL's) apply to both
domestic and imported fruit. In December 2003, USDA provided comments to
the State General Administration for Quality Supervision, Inspection,
and Quarantine (AQSIQ) and the Ministry of Commerce (MOFCOM) stressing
concern with grape product MRL's. Further, the USDA provided AQSIQ and
MOFCOM comments on the recently issued revised fruit entry measures,
which include logistical, sanitary and phytosanitary rules. According to
trade sources, the proposed measures may push fruit prices higher for
goods transiting Hong Kong while simultaneously reduce illegal trade.
Expanded direct trade to China may result and possibly a more equitable
and competitive marketplace for both high-quality domestic fruit and
imported fruit may result.

# Production

## Apple, Pear, and Grape Production, Area, and Primary Cultivars

Post estimates 2004 apple production will be 20.2 million metric tons
(MMT), pear production 10.2 MMT, and grape production 5.6 MMT. These
estimates are slight changes from 2003 deciduous fruit production as
apple acreage reductions seem to have abated, new pear plantings remain
flat, and the rate of grape planting expansion has slowed. Further,
weather across the growing areas has been favorable, input costs remain
unchanged, fruit prices, although higher, did not climb as much as other
agricultural products, and orchards and vineyards matured to fuller
yields.

According to China's National State Statistics Bureau (SSB) and MOA's
"Statistical Report," calendar year (CY), 2003 apple production was 21.1
MMT on 1.9 million hectares (MHa), pear production was 9.8 MMT over 1.1
MHa and grape production was 5.2 MMT on 0.4 MHa. Last year was a high
year in the apple production cycle and broke the pattern of falling
apple production volumes that had occurred in the previous five years.
Commercial orchards and growers are choosing to top-graft apple and pear
trees to alternate cultivars rather than uproot and replant entire
trees.

The UN Food and Agriculture Organization (FAO) estimates for 2003 apple
production coincide with Chinese government figures. The FAO estimates
2003 apple production at 20 MMT, pear production at 9.4 MMT and grape
production at 3.9 MMT. Post's (FAS China) previous estimates for pear
and grape planting acreage and production coincided with MOA and the SSB
(see GAIN report CH3121). Our original forecast for apple production,
however, was lower than MOA and SSB data as production in Shandong and
Shaanxi proved better than originally anticipated.

During 2003, Red Fuji apples accounted for approximately 61% or 12.8 MMT
of the 21.1 MMT apple harvest. Rallus Janet apples amounted to roughly
7% or 1.5 MMT. As for the 9.8 MMT 2003 pear harvest, Ya Pears amounted
to 2.2 MMT (22% of total harvest) and Snow Pears amounted to 1.7 MMT
(17% of total harvest). In 2002, the Red Fuji and Rallus Janet accounted
for 57% and 7.5% of apple production respectively while Ya and Snow
Pears accounted for 23% and 20% respectively. Expectations are similar
for 2004.

MOA does not provide detailed grape variety production. Table grapes
like Kyoho (JuFeng), Globe, and Muscat are common, but nearly all
production in Xinjiang, the largest grape producing province, has been
the green oblong, and seedless Thompson-like Ma Nai ("Cow's Nipple"),
that is dried for raisins, as well as smaller, rounder, green seedless
grapes that are consumed fresh. Expansion of the wine industry is a
substantial driving force for new plantings in Hebei, Shandong, and
Liaoning, including Chardonnay, Sauvignon, Cabernet, Merlot and Pinot
Noir.

China's primary deciduous fruit production regions are the provinces
around the Bohai Gulf, the Northwest Loess Plateau, and the northern
portion of the Yellow River Basin. (See Historical Production Tables as
well as ATO Map Section of this report). Apple production is
concentrated in a few provinces: Shandong, Shaanxi, Henan, Hebei,
Shanxi, Liaoning and Gansu. These six provinces account for 86% of
planted area and 90% of production. In 2003, Shaanxi apple planted area
surpassed Shandong for the first time in China's modern history. Pear
production is slightly more diverse, but concentrated in Hebei and
Shandong; accounting for nearly 30% of area and 40% of production. Grape
production is concentrated in Xinjiang, Hebei, Shandong, Liaoning, and
Henan, which combined compose 63% of planted area and 69% of production.

## Concentrated Apple Juice (CAJ)

Industry sources forecast 2004 CAJ production at 500,000 MT, up 10% from
last year, as market demand remains strong and more processing
facilities are constructed. Post estimates 2003 calendar year production
exceeded 450,000 MT. CAJ is produced primarily in Shandong, Shaanxi and
Henan. Some processing plants do not operate at full capacity due to the
increased cost of raw materials. Juicing companies are no longer able so
easily to source out-of-grade apples for processing, as orchard
management improves and fewer out-of-grade apples are available.
Companies now mainly use second grade apples for juicing, increasing the
purchase price to around RMB 80 per ton. As a result, export prices also
jumped an average US\$60 per ton (see price table).

Last year, China's Chamber of Commerce began setting floor prices for
exported CAJ to avoid countervailing measures from importing countries
such as the United States. This year's FOB prices, adjusted every three
months, are from August 1 and set at \$630 per MT to Europe and \$720
per MT to the United States. Sources report internal debate on curbing
CAJ production to prevent China's share of world CAJ trade from
increasing too fast.

Chinese CAJ processors are equipped with state-of-the-art facilities and
benefit from cheap labor and raw materials, enabling their product to
remain quality- and price-competitive. The greatest challenge facing the
CAJ industry is that too rapid export growth may result in safeguard
measures by importing countries, or that too few apples will be
available for processing.

Juicing companies are contracting more high-sour apples dedicated to
juicing. Industry sources estimate no less than 40,000 hectares of
high-sour content apples have been planted and another 40,000 hectares
are under way with completion projected within a few years. Sources
indicate that some of the dedicated apple trees planted several years
ago have started bearing fruit this year, but larger volumes will not be
available for another three years.

China has limited production of other apple products such as jellies,
sauces and additives. CAJ blending with other fruit/vegetable juices
exists, but production of apple wine and vinegar is limited. Reports
indicate some food manufacturers are using fructose derived from apples
to replace cane sugar as a sweetener in processed foods.

# Consumption

## Climbing Fruit Purchases and Consumption in Urban Areas

Thanks to higher consumer income, improved distribution, and increased
production, urban and rural consumption of fresh and dried fruits and
melons has grown dramatically over the past several years, reaching
56.52 kilogram per urban household in 2002, up 37.5% from the 1990
levels of 41.11 kilograms. Fresh fruits and melons remain normal goods
for Chinese consumers; even the lowest-income urban households consume
an average 32 kilograms of fresh fruits and melons annually while the
wealthiest households consume an average 75 kilograms/year. Per capita
nationwide urban household expenditures on fresh fruits averaged RMB 168
amounting to 2.8% of living expenses and 7.4% of food expenses.

Expenditures on fruits and melons were highest in Beijing (RMB 313),
Shanghai (RMB 295), Zhejiang (RMB232), Guangdong (RMB216) and Tianjin
(215). The data may underrate Zhejiang and Guangdong, however, as these
are large provinces with numerous cities where consumption might
approach Beijing's level.

## Buying Habits Shifting from Wet-Markets to Retail Hypermarkets

The supermarket/hypermarket revolution is sweeping the nation.
Traditional fresh fruit and vegetable purchases at wet-markets are
gradually shifting to clean, attractive, inexpensive fruits at modern
retail outlets. Products range from locally sourced fruit, specialty
fruits from other provinces, or imported fruits. Retailers and
chain-stores are centralizing their purchases to obtain economies of
scale, contracting production under prescribed growing conditions that
will assure the desired fruit quality and uniformity or by contracting
with integrated growing and packing facilities who are capable of
supplying fruits at low cost due to their own improved and more
economical integration. Although it is not yet the norm, a few specialty
chain stores are also developing that sell only high-quality domestic
and imported fruits and vegetables.

## Consumer's Fruit Purchasing Preferences

The most widely consumed fruits are apples, pears, and grapes, along
with bananas, citrus and melons. Easily pared large-sized apples and
pears and grapes with loose skin appeal to most Chinese consumers, who
nearly always avoid any fruit skins for sanitary reasons. Strongest
consumer demand and highest price is immediately after harvest as new
fruit crops enter the market. By and large most fruit consumption still
occurs in its growing regions, but consumers increasingly are exposed to
fruit from outside their province. Litchi and longan, for example, are
widely distributed tropical fruits produced in South China but also now
imported. Lower import tariffs from ASEAN countries (See Trade Section)
have led to wider availability of tropical fruits like mango, rambutan,
jackfruit and durian, which compete with deciduous fruits.

## Regional Branding Impacting Consumer Purchases

Although individual company efforts are critical, Chinese grower
associations at the provincial or local level help market fruits to
domestic retailers, consumers, and even overseas markets through their
participation in trade shows or through point of purchase. Most of these
associations are regional and market fruits like Zhejiang Pears,
Xinjiang "Fragrant" Pears, Yantai "Red Fuji Apples", etc. in the
capacity of intermediaries between growers, government, and retailers.
Some receive local government support; there is no formal central
government provincial assistance.

## Booming CAJ and Other Juice Drink Consumption

Fruit juice/drink consumption is surging at more than 40% each year in
China, with production in 2003 surpassing 3 MMT. Annual per capital
consumption of juice is still low at around one kilogram, but the number
is expected to grow significantly in the next few years. Individual
orange juice/drink dominates consumption. Apple juice, also widely
consumed, is a key ingredient for many blended drinks and for the food
industry. Currently, more than 90% of CAJ produced in China is for
export. Domestic CAJ consumption is between 30,000-50,000 MT a year and
growing fast. Housewives prefer 100% juice (including apple juice) while
young people favor juice drinks (with juice content ranging from
10%-30%). Surveys indicate that consumers say juice drinks taste better.
While juice drinks maintain the fastest growth rate, tea drinks and
sports drinks (or functional drinks) witnessed robust growth in recent
years, as well.

# Trade

China revised and announced its Administrative Measure for Inspection,
Quarantine, and Supervision for Fruit Entry on August 6, 2004 to the
World Trade Organization (WTO). Post analysis of these measures is in
the policy section of this report and in GAIN report CH4036, an
unofficial translation of the measures.

Also on August 6, AQSIQ revised and posted on its website the
eligibility list for imported fruit by country/region (CH4029). The
United States, France, Japan, New Zealand, Chile and Australia can
export certain apple varieties to China. The United States, Chile and
New Zealand received approval for grape exports to China while pears
from New Zealand and Japan also received approval. Nearly all imported
deciduous fruit enters the country via ports in South China, much of it
transshipped through Hong Kong. However, some traders express an
interest in being able to import directly to northern ports, but they
recognize it will depend on costs.

China's exports of fresh deciduous fruits are likely to continue the
strong pace into the future as quality is better, access to export
markets has improved and prices are competitive. China's apple industry
hopes to increase exports from current levels to 1.25 MMT by 2008, which
would account for nearly one-fourth of global apple trade. There is no
official list of approved export destinations for Chinese deciduous
fruits available, but as export statistics show, China has been
successful in its negotiations with other countries to gain new access
or expanded varieties access.

China and many of the ASEAN member nations have begun implementation of
the "Early Harvest" program of their Free Trade Agreement, which slashed
or eliminated tariffs on a variety of goods including fruit.
Consequently China's exports of deciduous fruit and imports of many
tropical fruits have risen rapidly. Most exported fresh fruits leave
China from northern ports near production areas for neighboring
countries like Russia or Southeast Asia, but access to new markets in
Europe along with North and South America are being negotiated. Some
Chinese exporters have partnerships with foreign investors.

## Apple Imports Climb While Exports Jump Nearly 150 Percent

Sales of imported apples by value increased from MY03/04 while sales by
volume fell. The United States, Chile and New Zealand remain the primary
apple suppliers to China. From MY02/03 to MY 03/04, imports from the
United States fell from 21.6 KMT to 18.5 KMT, but rose from \$9.4
million to \$14.4 million in value. At the same time, imports from Chile
fell from 18.9 KMT to 11.9 KMT but rose from \$9.1 million to \$9.3
million in value. New Zealand origin apple imports fell from 10.6 KMT to
6.2 KMT and also fell in value, from \$5.3 million to \$4.5 million.
Nearly 90 percent of China's apple imports enter the country through
Shenzhen and Guangzhou ports (Guangdong Province). For the past several
years, imports have been highest from April to June, but significant
imports still take place from January to March and even from July
through September.

MY03/04 apple exports grew to nearly \$250 million, up sharply from
MY02/03 exports of \$173 million; with the largest portion (\$97
million) from October through December and another large portion (\$70
million) occurring from January to March. China's apple export season is
slowly expanding as changing fruit cultivars allow for an extended
harvest season and improved cold storage and controlled atmosphere
storage development allows for fruit to be better-maintained over a
longer period. Although principal export destinations remain Southeast
Asia and Russia, increased apple exports to the EU (the Netherlands,
Spain, the United Kingdom, Italy, and France) appear to be taking hold.
Although China produces many apple cultivars across a number of
provinces, exports primarily depart China from Qingdao in Shandong
province (MY03/04 exports of \$165 million). Traders indicate Fuji
apples are the primary variety exported, but with more desirable
cultivars and better infrastructure developing in the country, many
expect to see exports increase from Liaoning and Shaanxi.

## Pear Exports Maintain Stable Growth

China imports small volumes of pears (MY03/04 500 MT) compared to its
annual production of over 9 MMT. Pear imports entering China are almost
all from New Zealand and enter the country via Guangzhou or Shenzhen in
South China from January to June.

China's pear exports did not expand as quickly as apple exports during
MY03/04, but remain an important and growing segment of China's fruit
trading industry. The suspension of exports to the United States and
other countries following the December 2004 detection of *Alternaria*
fungus in Ya Pears contributed to the slow growth. MY03/04 pear exports
reached \$85 million, up from MY02/03 exports of \$69 million. The pear
export season is primarily from September through December (\$35 million
in MY03/04), but it appears to be expanding slightly on both ends.

Primary destinations remain Southeast Asia and Russia. Ya and Fragrant
Pear exports to Canada were strong, but stopped by a finding of
*Alternaria*. The greatest export growth was to Indonesia; sales
increased from \$8 million to \$17 million over the course of the year
and should continue growing. A large portion of the export growth was in
Fragrant Pears, and "Other" pears aside from Ya and Snow Flake Pears.
Exports primarily leave China from the northern ports of Tianjin and
Qingdao, but large increases from South China's port of Shenzhen
appeared during the last year.

## Southern Hemisphere Grapes Welcomed in China While Domestic Exports Expand

China's imports of grapes continue to grow, jumping from \$32 million in
CY2002 to over \$41 million in CY2003 and reaching over \$45 million
through the first seven months of CY2004. The jump is due to expanded
imports from Chile, the largest supplier by value and volume. Grape
imports are strongest from April through June, but January to March is
also a high demand season. Imports from Southern Hemisphere countries in
the first half of the year will likely remain as China lacks domestic
grapes at that time while Chinese holidays, like the Spring Festival,
drive demand. Customs data indicates nearly 90 percent of grape imports
entered China from ports in Shenzhen and Guangzhou.

Fresh grape exports surged from \$276,000 dollars in CY2001 to over
\$5.8 million in CY2003 of which approximately \$5.5 million occurred in
the last half of the year. Exports for CY2004 appear strong, as the
first seven months reported recorded exports to nearly twice the level
of the first half 2003.

## CAJ Export Prospects Remain Bright as World Demand Grows

Customs data indicates China exported a record 485,700 MT of CAJ in
MY2003/04, a 30% increase, largely boosted by surging U.S. imports.
MY03/04 Sales by value were \$308 million, a 140 percent increase from
the prior marketing year. The U.S. remained the largest importer of
Chinese CAJ by volume and value. Japan, the EU, Russia, and Australia
were among other major buyers of Chinese apple juice, with their import
volume growing steadily. China already exported 315,875 MT of CAJ in the
first seven months of 2004, an increase of 25% over the same period last
year. Given increasing global CAJ demand, China, being the largest
supplier, expects to export 450,000-460,000 MT of apple juice in CY2004.

U.S. CAJ imports from China reached 233,476 MT and \$151 million in
MY03/04, a figure almost double the previous year (121,938 MT and \$79
million). Sources indicate fast growing demand for CAJ, lower U.S.
domestic production and the February 2004 U.S. International Trade
Commission (ITC) final ruling, eliminating countervailing duties, in
favor of 10 Chinese CAJ processors spurred the large increase.

The little apple juice China imports is for blending purposes.

# Stocks

## Cold Storage Expansion Allows Better, Larger Inventory Throughout the Year

China does not maintain any data on fruit stocks. Traders and growers
indicate strong growth of controlled atmosphere (CA) storage and cold
storage space throughout the country over the past two years. As
facilities expand and improve, the likelihood of better quality domestic
fruit and better maintained imported fruit being available throughout
the year is bound to grow. Although cold storage facility expansion
should benefit high-quality fruit consumption and trade, most fruit
never enters these facilities because of the cost.

# Policy

## Revised Entry Requirements for Fresh Fruit Likely to Impact and Impede Trade 

China announced revised Administrative Measures for Inspection,
Quarantine, and Supervision of its Entry Requirements for Fresh Fruits
on August 6, 2004, with adoption on September 20 and enforcement from
November 20, 2004. China notified the WTO (G/SPS/N/CHN/80) (see GAIN
CH4036 for an UNOFFICIAL translation and analysis) with a comment period
until September 15. The USDA provided comments to AQSIQ's Enquiry Point
on September 14, but requested China allow a longer comment period, and
noted the measures address logistical problems associated with imported
commodities and not just phytosanitary or food safety risk posed by
shipments. An unofficial translation of China's previous Administrative
Measures for Fruit Entry is in GAIN report CH1058.

The measures require that importers receive a Quarantine Import Permit
(QIP), valid for six months, before signing contracts. The measures
require and suggest importers cite sanitary requirements in the QIP
application and again in contracts. The scientific validity of the
requirement remains in question as it is unimaginable to cite sanitary
concerns before signing a contract and knowing from where
(country/region) fruit imports will arrive. Therefore the concern is
that the QIP may act as a de-facto import licensing mechanism.
Additionally, the QIP requires importers to designate the port of entry
thereby curtailing chances for diversion to other ports.

Other noteworthy changes in the Measures include additional inspection
and certification requirements for fruit re-exported to China via Hong
Kong, language that packaging and pallets carry markings designating
China as the fruit destination, documentation on packinghouses and crop
protection applications and a zero tolerance on dead leaves and branches
in shipments. Industry sources grant the measures could impede some
illegal trade and trade posing a legitimate health or phytosanitary
risk, but expect the changes will also impede legal trade by pushing
imported fruit prices higher with longer storage times and extra
inspections. There is also concern that the required markings do not aid
commodity trace back and prevent the possible re-export of fruit to
other markets. And, the documentation on chemicals and zero tolerance
for dead leaves and branches may be unreasonably restrictive.

Some domestic traders suggest the measures could encourage direct fruit
trade to China and divert it from transiting Hong Kong. Others, however,
believe the measures will merely alter the cost structure for trading
through Hong Kong. One large domestic packinghouse applauds the measures
citing the changes will make a more equitable market for high-quality
domestic fruit to compete with imported fruit.

## Drafted MRLs Designed to Improve Food Quality May Hurt Imports

In October 2003, China's National Notification Authority gave the WTO
(G/SPS/N/CHN/30) drafted revisions for 136 pesticides (acaracides,
fungicides, insecticides, and herbicides) MRLs of which, at least 50 are
for apples, pears, and grapes. The U.S. California Table Grape
Commission commented through the U.S. Embassy and the USDA FAS Office of
Food Safety and Technical Services Division that proposed limits for
Fenpropathrin, Glyphosate, Mancozeb, Metalaxyl, and Parathion were all
lower than U.S. established MRLs. According to China's SPS Enquiry
Point, the Measures are still in draft form, however; a final
publication could become available in late September 2004.

## Lower Tariff and VAT Rates for 2004 Imported Deciduous Fruits

China is in the last year of its scheduled tariff reductions that began
with the nation's 2001 WTO accession. Effective tariff rates for 2004
fell by 6% for grapes and 4% for apples and pears when compared to 2003
rates. Although it is possible additional reductions may occur in the
future, there is no schedule for their reductions at the present time.

  ------------- -------------------------------------- -------- ------- -----------
  **Deciduous                                                           
  Fruit Import                                                          
  Tariff and                                                            
  VAT Rates for                                                         
  2004**                                                                

  HS Code       Description                            2004             Effective

                                                       Tariff   VAT     Rate

  0806.10       Grapes, Fresh                          13.0%    13.0%   27.7%

  0808.10       Apples, Fresh                          10.0%    13.0%   24.3%

  0808.2012     Pears, Duck (Ya) or Snow (Hsueh),      12.0%    13.0%   26.6%
                Fresh                                                   

  0808.2013     Pears, Fragrant (Xiang), Fresh         12.0%    13.0%   26.6%

  0808.2019     Pears, Other, Fresh                    10.0%    13.0%   24.3%

  0808.2020     Quinces, Fresh                         16.0%    13.0%   31.1%
  ------------- -------------------------------------- -------- ------- -----------

# Marketing

## South China Key, but Eyes Turning North to Expanded Consumer Base

The largest percent of deciduous fruit arrives in South China, often
re-exported from Hong Kong. Although most Hong Kong and South China
fruit traders are well aware of the availability and variability of U.S.
and other nation's fruit, U.S. traders and packinghouses should continue
marketing fruits to traders in this key geographic area. At the same
time, however, it will be increasingly important to reach buyers in to
northern and central China as direct exports become more cost efficient,
and rules for re-export certification in Hong Kong change.

Indications are that not only USDA Cooperator associations, but also
other countries' fruit associations are targeting the large northern
China markets of Shanghai, Beijing, and emerging city markets like
Dalian. Exporters of U.S. deciduous fruits are advised to contact any of
the three USDA China Agricultural Trade Offices (ATOs) and the USDA
cooperator associations assisting with marketing U.S. fruits (see
following page with China map).

Successful marketing tactics include association- or company-managed
contests awarding prizes and gift packages to importers or vendors
buying the largest volumes or values of fruit. Traditional methods
include point-of-sale marketing, advertisements and flyers in newspapers
for retail stores, and promotions at restaurants, shopping malls,
stores, and public areas receiving large numbers of visitors.

# Deciduous Fruit Production Photos

## Shandong Apples, Hebei Pears, Xinjiang Grapes

Shandong Apples

Photo description (L-R): 1. New experimental bags on apples west of
Yantai in late July 2004. 2. Unbagged apples in established Yantai
orchard in late July 2004. 3. Conventional distribution of fruit to
wholesale fruit markets in late January 2004. Apples are in bulk plastic
bags inside the covered truck.

![](media/image2.png){width="6.006944444444445in"
height="1.5048611111111112in"}

Hebei Pears

Photo description (L-R): 1. Integrated, commercial 5-8 year old Ya Pear
orchard of integrated packinghouse in Baoding, Hebei in August 2004. 2.
New Century Pears prior to fruit grading and post-harvest packaging in
August 2004. 3. Factory inspection for pests and diseases within
packinghouse supplying export and domestic markets in August 2004.

![](media/image3.png){width="6.006944444444445in"
height="1.5152777777777777in"}

Xinjiang Grapes

Photo description (L-R): 1. Green seedless grapes grown at a state-owned
orchard in Turpan, Xinjiang in August 2003. 2. Green seedless grapes and
other fruit on display in Urumqi Wholesale market in August 2003.

![](media/image4.png){width="6.006944444444445in"
height="1.9736111111111112in"}

# China Map for USDA ATO Marketing Region and Production Areas

The following color-coded map of China indicates provinces and regions
where USDA ATO's conduct market surveys and promotions. Chinese
provinces shaded red are covered by ATO Beijing, while ATO Shanghai
covers green provinces, and ATO Guangzhou covers the provinces shaded
yellow. Provinces shaded gray are not covered by any ATO while Hong
Kong, shaded blue, is covered by a separate ATO located in Hong Kong.

The map may be of general use, as well, for understanding provinces and
cities mentioned in the production, consumption, and trade portions of
this report. For reference, the Bohai Gulf area is principally Liaoning,
Hebei, and Shandong. The Northwest Loess Plateau is Shanxi, Shaanxi, and
Gansu. The Yellow River Basin is Henan, Anhui, and Jiangsu.

![](media/image5.wmf){width="5.995138888888889in"
height="3.951388888888889in"}

## USDA ATO and Cooperators Contact Information

  ---------------------- ------------------------- -----------------------
  USDA ATO Beijing       USDA ATO Guangzhou        USDA ATO Shanghai

  Attn: Mr. LaVerne      Attn: Mr. Keith Schneller Attn: Mr. Ross Kreamer
  Brabant                                          

  Tel: 86-10-8529-6418   Tel: 86-20-8667-7553      Tel: 86-21-6279-8622

  Fax: 86-10-8529-6692   Fax: 86-20-8666-0703      Fax: 86-21-6279-8336

  Email:                 Email:                    Email:
  ATOBeijing@usda.gov    ATOGuangzhou@usda.gov     ATOShanghai@usda.gov

                                                   

  Washington Apple       California Table Grape    
  Commission             Commission                

  Attn: Mr. Victor Wang  Attn: Mr. Louis Ng        

  Tel: 86-20-37582315    Tel: 86-21-6247-3840      

  Fax: 86-20-27583695    Fax: 86-21-6247-3448      

  Email:                 Email:                    
  victorwongsh@163.net   lnash@public.sta.net.cn   
  ---------------------- ------------------------- -----------------------

# Production, Supply, and Demand (PSD) Tables

## Apples

+-------------------+-------+-------+-------+-------+-------+-------+
| ###### PSD Table  |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | #     |       |       |       |       |       |
|                   | ##### |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | ###   |       |       |       | (HA)  |       |
|                   | ##### |       |       |       | (1000 |       |
|                   | # App |       |       |       | TREES |       |
|                   | les,  |       |       |       | )(MT) |       |
|                   | Fresh |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2002  | Re    | 2003  | Est   | 2004  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Est   | Off   | Est   | Off   | Est   |
|                   | icial | imate | icial | imate | icial | imate |
|                   | \[    | \[    | \[    | \[    | \[    | \[    |
|                   | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 07    |       | 07    |       | 07    |
| Begin**           |       | /2002 |       | /2003 |       | /2004 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Planted      | 19    | 19    | 18    | 19    | 0     | 18    |
|                   | 25000 | 25000 | 50000 | 01000 |       | 90000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested    | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Bearing Trees     | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Bearing Trees | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Total Trees       | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Commercial        | 192   | 192   | 185   | 210   | 0     | 202   |
| Production        | 41000 | 41000 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Comm.         | 0     | 0     | 0     | 0     | 0     | 0     |
| Production        |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Production  | 192   | 192   | 185   | 210   | 0     | 202   |
|                   | 41000 | 41000 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports     | 51256 | 51256 | 53000 | 36853 | 0     | 45000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 192   | 192   | 185   | 210   | 0     | 202   |
|                   | 92256 | 92256 | 53000 | 36853 |       | 45000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic Fresh    | 164   | 158   | 151   | 165   | 0     | 152   |
| Consump           | 92353 | 92353 | 53000 | 28447 |       | 95000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports, Fresh    | 4     | 4     | 6     | 7     | 0     | 8     |
| Only              | 99903 | 99903 | 00000 | 08406 |       | 50000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| For Processing    | 23    | 29    | 28    | 38    | 0     | 41    |
|                   | 00000 | 00000 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Withdrawal From   | 0     | 0     | 0     | 0     | 0     | 0     |
| Market            |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL UTILIZATION | 192   | 192   | 185   | 210   | 0     | 202   |
|                   | 92256 | 92256 | 53000 | 36853 |       | 45000 |
+-------------------+-------+-------+-------+-------+-------+-------+

Industry sources estimate approximately 7 to 7.5 MT of fresh apples is
needed to produce 1 MT of CAJ at 70/71 degrees Brix.

### Apple Trade Matrix Tables

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Import Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | ####### A    |              |              |
|                       | pples, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | July-June    | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Imports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 21655        | U.S.         | 18517        |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Chile                 | 18894        | Chile        | 11897        |
+-----------------------+--------------+--------------+--------------+
| New Zealand           | 10643        | New Zealand  | 6293         |
+-----------------------+--------------+--------------+--------------+
| Vietnam               | 19           | Vietnam      | 112          |
+-----------------------+--------------+--------------+--------------+
| North Korea           | 0            | North Korea  | 19           |
+-----------------------+--------------+--------------+--------------+
| Japan                 | 1            | Japan        | 15           |
+-----------------------+--------------+--------------+--------------+
| France                | 43           | France       | 0            |
+-----------------------+--------------+--------------+--------------+
| Taiwan                | 1            | Taiwan       | 0            |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 29601        |              | 18336        |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 0            |              | 0            |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 51256        |              | 36853        |
+-----------------------+--------------+--------------+--------------+

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Export Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | ####### Ch   |              |              |
|                       | ina, Peoples |              |              |
|                       |  Republic of |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | ####### A    |              |              |
|                       | pples, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | July-June    | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Exports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 0            | U.S.         | 144          |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Russia                | 95461        | Russia       | 111670       |
+-----------------------+--------------+--------------+--------------+
| Philippines           | 53145        | Philippines  | 72640        |
+-----------------------+--------------+--------------+--------------+
| Indonesia             | 42995        | Indonesia    | 69364        |
+-----------------------+--------------+--------------+--------------+
| Vietnam               | 63059        | Vietnam      | 67476        |
+-----------------------+--------------+--------------+--------------+
| Thailand              | 21462        | Thailand     | 63071        |
+-----------------------+--------------+--------------+--------------+
| Malaysia              | 34789        | Malaysia     | 50007        |
+-----------------------+--------------+--------------+--------------+
| Kazakhstan            | 25274        | Kazakhstan   | 38097        |
+-----------------------+--------------+--------------+--------------+
| Singapore             | 27161        | Singapore    | 29789        |
+-----------------------+--------------+--------------+--------------+
| Netherlands           | 10686        | Netherlands  | 29396        |
+-----------------------+--------------+--------------+--------------+
| Hong Kong             | 20378        | Hong Kong    | 27532        |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 394410       |              | 559042       |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 105493       |              | 149220       |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 499903       |              | 708406       |
+-----------------------+--------------+--------------+--------------+

### Apple Average National Chinese Export Price Table

Prices in the table below reflect average monthly Chinese export prices
from all ports for all apple cultivars in the Harmonized Tariff System
080810.

+------------------------+--------------+--------------+--------------+
| ###### Prices Table    |              |              |              |
+------------------------+--------------+--------------+--------------+
| **Country**            | China,       |              |              |
|                        | Peoples      |              |              |
|                        | Republic of  |              |              |
+------------------------+--------------+--------------+--------------+
| **Commodity**          | Apples,      |              |              |
|                        | Fresh        |              |              |
+------------------------+--------------+--------------+--------------+
| Prices in              | US\$ FOB     | per uom      | Metric Ton   |
|                        | China        |              |              |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
| Year                   | 2003         | 2004         | \% Change    |
+------------------------+--------------+--------------+--------------+
| Jan                    | 340          | 350          | 3%           |
+------------------------+--------------+--------------+--------------+
| Feb                    | 340          | 310          | -9%          |
+------------------------+--------------+--------------+--------------+
| Mar                    | 370          | 390          | 5%           |
+------------------------+--------------+--------------+--------------+
| Apr                    | 400          | 390          | -3%          |
+------------------------+--------------+--------------+--------------+
| May                    | 430          | 430          | 0%           |
+------------------------+--------------+--------------+--------------+
| Jun                    | 470          | 460          | -2%          |
+------------------------+--------------+--------------+--------------+
| Jul                    | 430          | 400          | -7%          |
+------------------------+--------------+--------------+--------------+
| Aug                    | 370          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Sep                    | 280          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Oct                    | 330          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Nov                    | 320          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Dec                    | 310          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Date of Quote          | 8/25/2004    |              |              |
+------------------------+--------------+--------------+--------------+

### Fuji Apple Wholesale Market and All Apple Export Price Comparison

The following table represents average wholesale market prices for Fuji
Apples in different regions throughout China along with average export
prices for all Apples throughout China and in the principle export
location of Fuji Apples, Qingdao.

  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
  Regional                                                                                                       
  Average                                                                                                        
  Wholesale                                                                                                      
  Market Prices                                                                                                  
  for Fuji Apples                                                                                                
  in \$ per                                                                                                      
  Kilogram                                                                                                       

                  2002        2002        2003       2003        2003        2003        2004        2004        2004

  Region          Jul.-Sep.   Oct.-Dec.   Jan-Mar.   Apr.-Jun.   Jul.-Sep.   Oct.-Dec.   Jan.-Mar.   Apr.-Jun.   July-Aug.

  Central         0.24        0.23        0.23       0.26        0.28        0.24        0.23        0.30        0.42

  North           0.31        0.25        0.26       0.30        0.39        0.22        0.23        0.27        0.35

  Northeast       0.42        0.26        0.35       0.37        0.40        0.29        0.30        0.34        0.33

  South           0.51        0.34        0.42       0.39        0.48        0.39        0.35        0.42        0.49

  Southwest       0.27        0.26        0.25       0.25        0.50        0.27        0.27        0.39        0.35

  West            0.24        0.18        0.22       0.32        0.27        0.26        0.26        0.35        0.47

  China Export\*  0.31        0.33        0.35       0.42        0.34        0.32        0.35        0.41        NA

  Qingdao         0.38        0.47        0.52       0.57        0.45        0.40        0.45        0.52        NA
  Export\*                                                                                                       

  Source: MOA;                                                                                                   
  Central:                                                                                                       
  Shanghai,                                                                                                      
  Jiangsu, Henan,                                                                                                
  Anhui,                                                                                                         
  Zhejiang,                                                                                                      
  Hubei, Shaanxi;                                                                                                
  North: Shanxi,                                                                                                 
  Shandong,                                                                                                      
  Tianjin, Inner                                                                                                 
  Mongolia,                                                                                                      
  Beijing, Hebei;                                                                                                
  Northeast:                                                                                                     
  Liaoning,                                                                                                      
  Heilongjiang,                                                                                                  
  Jilin; South:                                                                                                  
  Fujian, Hunan,                                                                                                 
  Guangxi,                                                                                                       
  Jiangxi,                                                                                                       
  Guangdong,                                                                                                     
  Hainan;                                                                                                        
  Southwest:                                                                                                     
  Guizhou,                                                                                                       
  Yunnan,                                                                                                        
  Sichuan,                                                                                                       
  Chongqing;                                                                                                     
  West: Gansu,                                                                                                   
  Ningxia,                                                                                                       
  Xinjiang,                                                                                                      
  Tibet; \* HS                                                                                                   
  080810 Does not                                                                                                
  distinguish                                                                                                    
  variety                                                                                                        
  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------

## Concentrated Apple Juice (CAJ)

+-------------------+-------+-------+-------+-------+-------+-------+
| ###### PSD Table  |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | #     |       |       |       |       |       |
|                   | ##### |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | ##### |       |       |       | (MT)  |       |
|                   | ####  |       |       |       |       |       |
|                   | Apple |       |       |       |       |       |
|                   |  Juic |       |       |       |       |       |
|                   | e, Co |       |       |       |       |       |
|                   | ncent |       |       |       |       |       |
|                   | rated |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2002  | Re    | 2003  | Est   | 2004  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Est   | Off   | Est   | Off   | Est   |
|                   | icial | imate | icial | imate | icial | imate |
|                   | \[    | \[    | \[    | \[    | \[    | \[    |
|                   | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 07    |       | 07    |       | 07    |
| Begin**           |       | /2002 |       | /2003 |       | /2004 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Deliv. To         | 23    | 29    | 28    | 38    | 0     | 41    |
| Processors        | 00000 | 00000 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks  | 7000  | 7000  | 2392  | 2392  | 1392  | 1372  |
+-------------------+-------+-------+-------+-------+-------+-------+
| Production        | 3     | 3     | 4     | 5     | 0     | 5     |
|                   | 95000 | 95000 | 95000 | 19000 |       | 65150 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Imports           | 520   | 520   | 1000  | 679   | 0     | 900   |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 4     | 4     | 4     | 5     | 1392  | 5     |
|                   | 02520 | 02520 | 98392 | 22071 |       | 67422 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports           | 3     | 3     | 4     | 4     | 0     | 5     |
|                   | 70128 | 70128 | 62000 | 85699 |       | 27500 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic          | 30000 | 30000 | 35000 | 35000 | 0     | 38875 |
| Consumption       |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks     | 2392  | 2392  | 1392  | 1372  | 0     | 1047  |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL             | 4     | 4     | 4     | 5     | 0     | 5     |
| DISTRIBUTION      | 02520 | 02520 | 98392 | 22071 |       | 67422 |
+-------------------+-------+-------+-------+-------+-------+-------+

### CAJ Trade Matrix

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Import Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | ####### A    |              |              |
|                       | pple Juice,  |              |              |
|                       | Concentrated |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | Jul-Jun      | Units:       | MT           |
+-----------------------+--------------+--------------+--------------+
| Imports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 14           | U.S.         | 17           |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Australia             | 302          | Australia    | 263          |
+-----------------------+--------------+--------------+--------------+
| South Korea           | 72           | South Korea  | 106          |
+-----------------------+--------------+--------------+--------------+
| China                 | 33           | Kyrgyzstan   | 94           |
+-----------------------+--------------+--------------+--------------+
| Taiwan                | 26           | Taiwan       | 78           |
+-----------------------+--------------+--------------+--------------+
| Germany               | 22           | Israel       | 32           |
+-----------------------+--------------+--------------+--------------+
| Hungary               | 13           | Hungary      | 25           |
+-----------------------+--------------+--------------+--------------+
| Denmark               | 8            | Spain        | 21           |
+-----------------------+--------------+--------------+--------------+
| Netherlands           | 6            | Japan        | 20           |
+-----------------------+--------------+--------------+--------------+
| Turkey                | 6            | Kazakhstan   | 17           |
+-----------------------+--------------+--------------+--------------+
| Oman                  | 5            | Germany      | 6            |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 493          |              | 662          |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 27           |              | 17           |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 520          |              | 679          |
+-----------------------+--------------+--------------+--------------+

+-----------------+----------------------+--------------+--------------+
| ###### Expo     |                      |              |              |
| rt Trade Matrix |                      |              |              |
+-----------------+----------------------+--------------+--------------+
| **Country**     | China, Peoples       |              |              |
|                 | Republic of          |              |              |
+-----------------+----------------------+--------------+--------------+
| **Commodity**   | ####### Apple        |              |              |
|                 |  Juice, Concentrated |              |              |
+-----------------+----------------------+--------------+--------------+
| Time Period     | Jul-Jun              | Units:       | MT           |
+-----------------+----------------------+--------------+--------------+
| Exports for:    | 2002                 |              | **2003**     |
+-----------------+----------------------+--------------+--------------+
| U.S.            | 121938               | U.S.         | 233476       |
+-----------------+----------------------+--------------+--------------+
| Others          |                      | Others       |              |
+-----------------+----------------------+--------------+--------------+
| Russia          | 42730                | Japan        | 45328        |
+-----------------+----------------------+--------------+--------------+
| Netherlands     | 38716                | Netherlands  | 41063        |
+-----------------+----------------------+--------------+--------------+
| Japan           | 38111                | Russia       | 38294        |
+-----------------+----------------------+--------------+--------------+
| Germany         | 37763                | Germany      | 33280        |
+-----------------+----------------------+--------------+--------------+
| Australia       | 26328                | Australia    | 25844        |
+-----------------+----------------------+--------------+--------------+
| Canada          | 25026                | Canada       | 24016        |
+-----------------+----------------------+--------------+--------------+
| South Africa    | 6041                 | New Zealand  | 5246         |
+-----------------+----------------------+--------------+--------------+
| U.K.            | 5015                 | U.K.         | 5028         |
+-----------------+----------------------+--------------+--------------+
| New Zealand     | 3776                 | Israel       | 4916         |
+-----------------+----------------------+--------------+--------------+
| Taiwan          | 2722                 | France       | 3777         |
+-----------------+----------------------+--------------+--------------+
| Total for       | 226228               |              | 226792       |
| Others          |                      |              |              |
+-----------------+----------------------+--------------+--------------+
| Others not      | 21962                |              | 25431        |
| Listed          |                      |              |              |
+-----------------+----------------------+--------------+--------------+
| Grand Total     | 370128               |              | 485699       |
+-----------------+----------------------+--------------+--------------+

### CAJ Average National Chinese Export Price Table

+------------------------+--------------+--------------+--------------+
| ###### Prices Table    |              |              |              |
+------------------------+--------------+--------------+--------------+
| **Country**            | China,       |              |              |
|                        | Peoples      |              |              |
|                        | Republic of  |              |              |
+------------------------+--------------+--------------+--------------+
| **Commodity**          | Apple Juice, |              |              |
|                        | Concentrated |              |              |
+------------------------+--------------+--------------+--------------+
| Prices in              | US\$FOB      | per uom      | Metric Ton   |
|                        | China        |              |              |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
| Year                   | 2003         | 2004         | \% Change    |
+------------------------+--------------+--------------+--------------+
| Jan                    | 580          | 630          | 9%           |
+------------------------+--------------+--------------+--------------+
| Feb                    | 600          | 630          | 5%           |
+------------------------+--------------+--------------+--------------+
| Mar                    | 600          | 650          | 8%           |
+------------------------+--------------+--------------+--------------+
| Apr                    | 600          | 660          | 10%          |
+------------------------+--------------+--------------+--------------+
| May                    | 600          | 650          | 8%           |
+------------------------+--------------+--------------+--------------+
| Jun                    | 610          | 660          | 8%           |
+------------------------+--------------+--------------+--------------+
| Jul                    | 610          | 670          | 10%          |
+------------------------+--------------+--------------+--------------+
| Aug                    | 640          | N/A          |              |
+------------------------+--------------+--------------+--------------+
| Sep                    | 620          | N/A          |              |
+------------------------+--------------+--------------+--------------+
| Oct                    | 620          | N/A          |              |
+------------------------+--------------+--------------+--------------+
| Nov                    | 610          | N/A          |              |
+------------------------+--------------+--------------+--------------+
| Dec                    | 620          | N/A          |              |
+------------------------+--------------+--------------+--------------+
| Date of Quote          | 9/8/2004     |              |              |
+------------------------+--------------+--------------+--------------+

## Pears

+-------------------+-------+-------+-------+-------+-------+-------+
| ###### PSD Table  |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | #     |       |       |       |       |       |
|                   | ##### |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | ##    |       |       |       | (HA)  |       |
|                   | ##### |       |       |       | (1000 |       |
|                   | ## Pe |       |       |       | TREES |       |
|                   | ars,  |       |       |       | )(MT) |       |
|                   | Fresh |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2002  | Re    | 2003  | Est   | 2004  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Est   | Off   | Est   | Off   | Est   |
|                   | icial | imate | icial | imate | icial | imate |
|                   | \[    | \[    | \[    | \[    | \[    | \[    |
|                   | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 07    |       | 07    |       | 07    |
| Begin**           |       | /2002 |       | /2003 |       | /2004 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Planted      | 10    | 10    | 11    | 10    | 0     | 10    |
|                   | 50000 | 50000 | 00000 | 61500 |       | 70000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested    | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Bearing Trees     | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Bearing Trees | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Total Trees       | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Commercial        | 93    | 93    | 98    | 97    | 0     | 102   |
| Production        | 09000 | 09000 | 45000 | 98424 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Comm.         | 0     | 0     | 0     | 0     | 0     | 0     |
| Production        |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Production  | 93    | 93    | 98    | 97    | 0     | 102   |
|                   | 09000 | 09000 | 45000 | 98424 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports     | 751   | 751   | 750   | 498   | 0     | 600   |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 93    | 93    | 98    | 97    | 0     | 102   |
|                   | 09751 | 09751 | 45750 | 98922 |       | 00600 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic Fresh    | 85    | 85    | 89    | 89    | 0     | 93    |
| Consump           | 72164 | 72164 | 95750 | 95753 |       | 25600 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports, Fresh    | 2     | 2     | 3     | 3     | 0     | 3     |
| Only              | 72137 | 72137 | 50000 | 03169 |       | 50000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| For Processing    | 4     | 4     | 5     | 5     | 0     | 5     |
|                   | 65450 | 65450 | 00000 | 00000 |       | 25000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Withdrawal From   | 0     | 0     | 0     | 0     | 0     | 0     |
| Market            |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL UTILIZATION | 93    | 93    | 98    | 97    | 0     | 102   |
|                   | 09751 | 09751 | 45750 | 98922 |       | 00600 |
+-------------------+-------+-------+-------+-------+-------+-------+

### Pear Trade Matrix Tables

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Import Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | #######      |              |              |
|                       | Pears, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | July-June    | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Imports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 0            | U.S.         | 0            |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| New Zealand           | 714          | New Zealand  | 498          |
+-----------------------+--------------+--------------+--------------+
| Japan                 | 35           | Japan        | 0            |
+-----------------------+--------------+--------------+--------------+
| Taiwan                | 2            | Taiwan       | 0            |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 751          |              | 498          |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 0            |              | 0            |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 751          |              | 498          |
+-----------------------+--------------+--------------+--------------+

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Export Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | #######      |              |              |
|                       | Pears, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | July-June    | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Exports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 7141         | U.S.         | 3730         |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Indonesia             | 36159        | Indonesia    | 59206        |
+-----------------------+--------------+--------------+--------------+
| Malaysia              | 51456        | Malaysia     | 42715        |
+-----------------------+--------------+--------------+--------------+
| Russia                | 29536        | Russia       | 36500        |
+-----------------------+--------------+--------------+--------------+
| Hong Kong             | 26569        | Hong Kong    | 34069        |
+-----------------------+--------------+--------------+--------------+
| Vietnam               | 34675        | Vietnam      | 28970        |
+-----------------------+--------------+--------------+--------------+
| Thailand              | 2230         | Thailand     | 19642        |
+-----------------------+--------------+--------------+--------------+
| Singapore             | 24373        | Singapore    | 15815        |
+-----------------------+--------------+--------------+--------------+
| Philippines           | 13714        | Philippines  | 10676        |
+-----------------------+--------------+--------------+--------------+
| Canada                | 10132        | Canada       | 8735         |
+-----------------------+--------------+--------------+--------------+
| Netherlands           | 10258        | Netherlands  | 8459         |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 239102       |              | 264787       |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 25894        |              | 34652        |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 272137       |              | 303169       |
+-----------------------+--------------+--------------+--------------+

### Pear Average National Chinese Export Price Table

Prices in the table below reflect average monthly Chinese export prices
from all ports for all pears and quinces in the Harmonized Tariff
Schedule category 080820 (including Ya, Snow, Fragrant, and Other).

+------------------------+--------------+--------------+--------------+
| ###### Prices Table    |              |              |              |
+------------------------+--------------+--------------+--------------+
| **Country**            | China,       |              |              |
|                        | Peoples      |              |              |
|                        | Republic of  |              |              |
+------------------------+--------------+--------------+--------------+
| **Commodity**          | Pears, Fresh |              |              |
+------------------------+--------------+--------------+--------------+
| Prices in              | US\$ FOB     | per uom      | Metric Ton   |
|                        | China        |              |              |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
| Year                   | 2003         | 2004         | \% Change    |
+------------------------+--------------+--------------+--------------+
| Jan                    | 240          | 260          | 8%           |
+------------------------+--------------+--------------+--------------+
| Feb                    | 240          | 250          | 4%           |
+------------------------+--------------+--------------+--------------+
| Mar                    | 250          | 330          | 32%          |
+------------------------+--------------+--------------+--------------+
| Apr                    | 230          | 270          | 17%          |
+------------------------+--------------+--------------+--------------+
| May                    | 280          | 270          | -4%          |
+------------------------+--------------+--------------+--------------+
| Jun                    | 260          | 270          | 4%           |
+------------------------+--------------+--------------+--------------+
| Jul                    | 250          | 260          | 4%           |
+------------------------+--------------+--------------+--------------+
| Aug                    | 270          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Sep                    | 260          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Oct                    | 300          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Nov                    | 290          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Dec                    | 300          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Date of Quote          | 8/25/2004    |              |              |
+------------------------+--------------+--------------+--------------+

### Ya Pear Wholesale Market and Ya and Snow Pear Export Price Comparison

The following table represents average wholesale market prices for Ya
Pears in different regions throughout China along with average export
prices for Ya and Snow Pears throughout China and in the principle
export location for Ya Pears, Tianjin.

  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
  Regional                                                                                                       
  Average                                                                                                        
  Wholesale                                                                                                      
  Market Prices                                                                                                  
  for Ya Pears in                                                                                                
  \$ per Kilogram                                                                                                

                  2002        2002        2003       2003        2003        2003        2004        2004        2004

  Region          Jul.-Sep.   Oct.-Dec.   Jan-Mar.   Apr.-Jun.   Jul.-Sep.   Oct.-Dec.   Jan.-Mar.   Apr.-Jun.   July-Aug.

  Central         0.06        0.13        0.18       0.22        0.20        0.15        0.18        NA          0.13

  North           0.09        0.13        0.16       0.19        0.19        0.11        0.13        0.14        0.16

  Northeast       0.22        0.17        0.17       0.21        0.29        0.16        0.19        0.19        0.13

  South           NA          0.24        0.22       0.29        0.22        0.26        0.23        0.20        0.30

  Southwest       0.14        0.12        NA         0.19        NA          NA          0.48        0.34        0.41

  West            NA          0.07        0.11       0.17        0.11        0.09        0.21        0.23        0.19

  China Export\*  0.23        0.23        0.23       0.19        0.23        0.28        0.21        0.19        NA

  Tianjin         0.21        0.22        0.22       0.18        0.23        0.29        0.19        0.17        NA
  Export\*                                                                                                       

  Source: MOA;                                                                                                   
  Central:                                                                                                       
  Shanghai,                                                                                                      
  Jiangsu, Henan,                                                                                                
  Anhui,                                                                                                         
  Zhejiang,                                                                                                      
  Hubei, Shaanxi;                                                                                                
  North: Shanxi,                                                                                                 
  Shandong,                                                                                                      
  Tianjin, Inner                                                                                                 
  Mongolia,                                                                                                      
  Beijing, Hebei;                                                                                                
  Northeast:                                                                                                     
  Liaoning,                                                                                                      
  Heilongjiang,                                                                                                  
  Jilin; South:                                                                                                  
  Fujian, Hunan,                                                                                                 
  Guangxi,                                                                                                       
  Jiangxi,                                                                                                       
  Guangdong,                                                                                                     
  Hainan;                                                                                                        
  Southwest:                                                                                                     
  Guizhou,                                                                                                       
  Yunnan,                                                                                                        
  Sichuan,                                                                                                       
  Chongqing;                                                                                                     
  West: Gansu,                                                                                                   
  Ningxia,                                                                                                       
  Xinjiang, Tibet                                                                                                
  \*Export of                                                                                                    
  08082012 Ya and                                                                                                
  Snow Pears                                                                                                     
  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------

## Grapes

+-------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**     |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | #     |       |       |       |       |       |
|                   | ##### |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | ##### |       |       |       | (HA   |       |
|                   | ####  |       |       |       | )(MT) |       |
|                   | Grape |       |       |       |       |       |
|                   | s, Ta |       |       |       |       |       |
|                   | ble,  |       |       |       |       |       |
|                   | Fresh |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2002  | Re    | 2003  | Est   | 2004  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Est   | Off   | Est   | Off   | Est   |
|                   | icial | imate | icial | imate | icial | imate |
|                   | \[    | \[    | \[    | \[    | \[    | \[    |
|                   | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 01    |       | 01    |       | 01    |
| Begin**           |       | /2003 |       | /2004 |       | /2005 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Planted      | 3     | 4     | 3     | 4     | 0     | 4     |
|                   | 80000 | 21000 | 90000 | 45000 |       | 60000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested    | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Commercial        | 49    | 51    | 50    | 56    | 0     | 62    |
| Production        | 00000 | 75939 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Comm.         | 0     | 0     | 0     | 0     | 0     | 0     |
| Production        |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Production  | 49    | 51    | 50    | 56    | 0     | 62    |
|                   | 00000 | 75939 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports     | 57000 | 53411 | 57000 | 55000 | 0     | 60000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 49    | 52    | 50    | 56    | 0     | 62    |
|                   | 57000 | 29350 | 57000 | 55000 |       | 60000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic Fresh    | 37    | 37    | 38    | 40    | 0     | 45    |
| Consump           | 50500 | 65906 | 00000 | 85000 |       | 85000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports, Fresh    | 6500  | 13444 | 7000  | 20000 | 0     | 25000 |
| Only              |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| For Processing    | 12    | 14    | 12    | 15    | 0     | 16    |
|                   | 00000 | 50000 | 50000 | 50000 |       | 50000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Withdrawal From   | 0     | 0     | 0     | 0     | 0     | 0     |
| Market            |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL UTILIZATION | 49    | 52    | 50    | 56    | 0     | 62    |
|                   | 57000 | 29350 | 57000 | 55000 |       | 60000 |
+-------------------+-------+-------+-------+-------+-------+-------+

### Grape Trade Matrix Tables

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Import Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | ####         |              |              |
|                       | ### Grapes,  |              |              |
|                       | Table, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | Jan-Dec      | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Imports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 19479        | U.S.         | 22028        |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Chile                 | 35289        | Chile        | 31138        |
+-----------------------+--------------+--------------+--------------+
| South Africa          | 0            | South Africa | 204          |
+-----------------------+--------------+--------------+--------------+
| Mozambique            | 0            | Mozambique   | 23           |
+-----------------------+--------------+--------------+--------------+
| Indonesia             | 0            | Indonesia    | 19           |
+-----------------------+--------------+--------------+--------------+
| Thailand              | 76           | Thailand     | 0            |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 35365        |              | 31384        |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 0            |              | 0            |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 54844        |              | 53412        |
+-----------------------+--------------+--------------+--------------+

+-----------------------+--------------+--------------+--------------+
| #####                 |              |              |              |
| # Export Trade Matrix |              |              |              |
+-----------------------+--------------+--------------+--------------+
| **Country**           | China,       |              |              |
|                       | Peoples      |              |              |
|                       | Republic of  |              |              |
+-----------------------+--------------+--------------+--------------+
| **Commodity**         | ####         |              |              |
|                       | ### Grapes,  |              |              |
|                       | Table, Fresh |              |              |
+-----------------------+--------------+--------------+--------------+
| Time Period           | Jan-Dec      | Units:       | Metric Ton   |
+-----------------------+--------------+--------------+--------------+
| Exports for:          | 2002         |              | **2003**     |
+-----------------------+--------------+--------------+--------------+
| U.S.                  | 0            | U.S.         | 1            |
+-----------------------+--------------+--------------+--------------+
| Others                |              | Others       |              |
+-----------------------+--------------+--------------+--------------+
| Pakistan              | 776          | Pakistan     | 3966         |
+-----------------------+--------------+--------------+--------------+
| Russia                | 2083         | Russia       | 2618         |
+-----------------------+--------------+--------------+--------------+
| Vietnam               | 1241         | Vietnam      | 1298         |
+-----------------------+--------------+--------------+--------------+
| Malaysia              | 673          | Malaysia     | 1290         |
+-----------------------+--------------+--------------+--------------+
| Indonesia             | 213          | Indonesia    | 761          |
+-----------------------+--------------+--------------+--------------+
| Thailand              | 0            | Thailand     | 676          |
+-----------------------+--------------+--------------+--------------+
| Hong Kong             | 430          | Hong Kong    | 629          |
+-----------------------+--------------+--------------+--------------+
| Philippines           | 35           | Philippines  | 507          |
+-----------------------+--------------+--------------+--------------+
| Mongolia              | 71           | Mongolia     | 431          |
+-----------------------+--------------+--------------+--------------+
| Macau                 | 0            | Macau        | 391          |
+-----------------------+--------------+--------------+--------------+
| Total for Others      | 5522         |              | 12567        |
+-----------------------+--------------+--------------+--------------+
| Others not Listed     | 341          |              | 876          |
+-----------------------+--------------+--------------+--------------+
| Grand Total           | 5863         |              | 13444        |
+-----------------------+--------------+--------------+--------------+

### Grape Average National Chinese Export Price Table

Prices in the table below reflect average monthly Chinese export prices
from all ports for all grape cultivars in the Harmonized Tariff System
080610.

+------------------------+--------------+--------------+--------------+
| ###### Prices Table    |              |              |              |
+------------------------+--------------+--------------+--------------+
| **Country**            | China,       |              |              |
|                        | Peoples      |              |              |
|                        | Republic of  |              |              |
+------------------------+--------------+--------------+--------------+
| **Commodity**          | Grapes,      |              |              |
|                        | Table, Fresh |              |              |
+------------------------+--------------+--------------+--------------+
| Prices in              | US\$ FOB     | per uom      | Metric Ton   |
|                        | China        |              |              |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
| Year                   | 2003         | 2004         | \% Change    |
+------------------------+--------------+--------------+--------------+
| Jan                    | 310          | 390          | 26%          |
+------------------------+--------------+--------------+--------------+
| Feb                    | 320          | 190          | -41%         |
+------------------------+--------------+--------------+--------------+
| Mar                    | 600          | 300          | -50%         |
+------------------------+--------------+--------------+--------------+
| Apr                    | 490          | 520          | 6%           |
+------------------------+--------------+--------------+--------------+
| May                    | 630          | 530          | -16%         |
+------------------------+--------------+--------------+--------------+
| Jun                    | 370          | 340          | -8%          |
+------------------------+--------------+--------------+--------------+
| Jul                    | 250          | 320          | 28%          |
+------------------------+--------------+--------------+--------------+
| Aug                    | 380          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Sep                    | 460          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Oct                    | 460          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Nov                    | 410          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Dec                    | 430          | NA           |              |
+------------------------+--------------+--------------+--------------+
| Date of Quote          | 8/25/2004    |              |              |
+------------------------+--------------+--------------+--------------+

### Red Globe Grape Wholesale Market and All Grape Import Price Comparison

The following table represents average wholesale market prices for Red
Globe Grapes in different regions throughout China along with average
import prices for Red Globe Grapes throughout China and in the principle
import location for Red Globe Grapes, Guangzhou.

  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
  Regional                                                                                                       
  Average                                                                                                        
  Wholesale                                                                                                      
  Market Prices                                                                                                  
  for Red Globe                                                                                                  
  Grapes in \$                                                                                                   
  per Kilogram                                                                                                   

                  2002        2002        2003       2003        2003        2003        2004        2004        2004

  Region          Jul.-Sep.   Oct.-Dec.   Jan-Mar.   Apr.-Jun.   Jul.-Sep.   Oct.-Dec.   Jan.-Mar.   Apr.-Jun.   July-Aug.

  Central         1.90        1.17        1.94       1.95        1.59        1.74        2.89        3.05        2.92

  North           0.98        1.50        2.35       2.46        2.35        1.87        2.08        1.82        2.09

  Northeast       0.96        0.84        2.65       2.41        2.41        1.45        2.80        1.93        1.93

  South           2.41        1.83        1.95       2.21        2.10        1.97        2.69        2.34        2.00

  Southwest       NA          NA          NA         NA          NA          0.76        0.00        3.43        NA

  West            0.54        0.43        1.20       3.19        1.63        0.70        1.17        2.85        NA

  China Import\*  0.60        0.59        0.62       0.76        0.96        1.09        1.10        1.08        NA

  Guangzhou       0.58        0.59        0.62       0.71        0.96        1.10        1.10        1.10        NA
  Import\*                                                                                                       

  Source: MOA;                                                                                                   
  Central:                                                                                                       
  Shanghai,                                                                                                      
  Jiangsu, Henan,                                                                                                
  Anhui,                                                                                                         
  Zhejiang,                                                                                                      
  Hubei, Shaanxi;                                                                                                
  North: Shanxi,                                                                                                 
  Shandong,                                                                                                      
  Tianjin, Inner                                                                                                 
  Mongolia,                                                                                                      
  Beijing, Hebei;                                                                                                
  Northeast:                                                                                                     
  Liaoning,                                                                                                      
  Heilongjiang,                                                                                                  
  Jilin; South:                                                                                                  
  Fujian, Hunan,                                                                                                 
  Guangxi,                                                                                                       
  Jiangxi,                                                                                                       
  Guangdong,                                                                                                     
  Hainan;                                                                                                        
  Southwest:                                                                                                     
  Guizhou,                                                                                                       
  Yunnan,                                                                                                        
  Sichuan,                                                                                                       
  Chongqing;                                                                                                     
  West: Gansu,                                                                                                   
  Ningxia,                                                                                                       
  Xinjiang,                                                                                                      
  Tibet; \* HS                                                                                                   
  080610 Does not                                                                                                
  distinguish                                                                                                    
  variety                                                                                                        
  --------------- ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- -----------

# Historical Production Tables

## 2003 Fruit Production Comparison for Apples, Pears, Grapes, Citrus and Peaches

  -------------- ------------ ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------- -----------
  **2003                                                                                                                            
  Provincial                                                                                                                        
  Major Variety                                                                                                                     
  Fruit                                                                                                                             
  Production                                                                                                                        
  Comparison                                                                                                                        
  (1000 Ha and                                                                                                                      
  MT)**                                                                                                                             

                 **Apples**                **Pears**               **Grapes**               **Citrus**                **Peaches**   

  **Province**   **1000 ha**  **MT**       **1000 ha** **MT**      **1000 ha**  **MT**      **1000 ha**  **MT**       **1000 ha**   **MT**

  Beijing        13           134,815      13          130,766     5            63,053      0            0            17            264,585

  Tianjin        7            68,069       4           25,851      6            140,060     0            0            4             49,071

  Hebei          276          2,002,769    213         2,820,702   52           803,418     0            0            99            1,133,773

  Shanxi         154          1,801,786    28          154,901     14           111,885     0            0            9             102,927

  Inner Mongolia 19           51,940       14          93,020      4            20,789      0            0            0             0

  Liaoning       115          1,089,937    86          515,892     37           586,124     0            0            19            229,149

  Jilin          25           190,133      26          120,215     14           107,362     0            0            0             391

  Heilongjiang   18           169,115      6           35,379      2            19,122      0            0            0             0

  Shanghai       0            139          2           17,931      2            27,564      10           174,439      9             101,543

  Jiangsu        39           494,611      44          502,033     11           140,777     3            54,143       30            317,105

  Zhejiang       0            810          24          244,454     8            172,714     125          1,766,619    22            210,067

  Anhui          17           221,317      37          583,091     8            161,600     2            10,793       15            167,674

  Fujian         0            151          23          129,980     5            55,801      164          1,943,977    26            195,809

  Jiangxi        0            0            22          45,181      2            3,631       186          619,887      9             26,994

  Shandong       357          6,118,563    74          982,562     66           761,031     0            0            126           1,576,537

  Henan          165          2,509,614    37          433,413     22           331,036     8            29,504       47            424,846

  Hubei          4            13,458       41          563,895     6            57,415      110          1,240,592    38            404,180

  Hunan          0            0            24          70,750      10           36,944      260          1,727,712    17            74,305

  Guangdong      0            0            6           38,760      0            0           150          1,351,484    0             61,173

  Guangxi        0            0            13          82,088      9            94,210      122          1,521,327    11            72,172

  Hainan         0            0            0           0           0            0           3            14,549       0             0

  Chongqing      3            6,441        24          142,901     3            17,413      96           752,374      8             46,295

  Sichuan        27           225,384      71          547,714     11           144,409     192          1,861,568    29            269,816

  Guizhou        5            9,262        31          97,867      3            15,895      34           149,820      11            54,254

  Yunnan         34           13,414       40          176,285     5            42,606      25           133,128      17            95,803

  Tibet          1            5,577        0           464         0            0           0            0            0             850

  Shaanxi        402          4,617,921    57          689,816     11           89,925      17           98,601       19            153,007

  Gansu          168          829,959      51          286,128     9            63,343      0            3,192        12            75,254

  Qinghai        4            8,246        1           4,418       0            74          0            0            0             340

  Ningxia        20           154,927      3           12,430      7            41,407      0            0            4             8,241

  Xinjiang       28           263,418      48          249,537     92           1,066,331   0            0            9             31,939

  National Total 1,901        21,001,776   1,062       9,798,424   421          5,175,939   1,506        13,453,709   607           6,148,100

  Source: China                                                                                                                     
  Agricultural                                                                                                                      
  Yearbooks                                                                                                                         
  -------------- ------------ ------------ ----------- ----------- ------------ ----------- ------------ ------------ ------------- -----------

## 1999-2003 China Apple, Pear, and Grape Production (1000 Ha and MT) by Province

Apples

  -------------- --------- ------------ --------- ------------ --------- ------------ --------- ------------ ---------- ------------
  **China Apple                                                                                                         
  Production                                                                                                            
  (1000 Ha and                                                                                                          
  MT) by                                                                                                                
  Province                                                                                                              
  1999-2003**                                                                                                           

  Province       1999                   2000                   2001                   2002                   2003       

                 1000 ha   MT           1000 ha   MT           1000 ha   MT           1000 ha   MT           1000 ha    MT

  Shandong       498.20    6,432,745    444.30    6,476,586    397.68    6,163,790    369.00    5,000,017    357.30     6,118,563

  Shaanxi        413.63    3,992,705    395.46    3,885,700    374.29    3,912,713    369.00    3,921,630    401.50     4,617,921

  Henan          240.69    2,427,717    207.00    2,388,997    180.20    2,524,083    168.30    2,603,588    164.50     2,509,614

  Hebei          341.13    1,871,157    328.30    1,806,155    316.50    1,845,447    288.30    1,965,571    276.40     2,002,769

  Shanxi         187.70    1,748,293    177.90    1,629,575    164.73    1,551,595    158.40    1,724,180    154.10     1,801,786

  Liaoning       209.00    1,469,839    195.10    1,231,479    161.90    1,134,657    131.90    1,005,142    115.10     1,089,937

  Gansu          195.00    629,027      167.60    690,671      165.90    723,901      163.50    776,004      167.50     829,959

  Jiangsu        63.60     679,626      49.60     695,294      47.73     680,191      46.70     614,555      38.90      494,611

  Xinjiang       36.20     246,838      34.60     299,673      31.17     270,983      30.40     250,396      27.80      263,418

  Sichuan        28.70     186,798      28.60     202,283      26.90     193,972      25.70     206,909      26.80      225,384

  Anhui          24.74     308,521      23.60     302,040      20.68     259,680      17.90     296,552      17.10      221,317

  Jilin          18.83     114,604      24.07     100,543      22.20     97,164       26.10     168,372      25.30      190,133

  Heilongjiang   32.20     96,962       28.60     112,086      25.20     109,689      28.80     183,067      18.40      169,115

  Ningxia        23.67     170,536      21.73     159,462      20.91     126,642      20.40     124,682      20.40      154,927

  Beijing        18.90     151,717      18.00     157,654      16.00     153,174      13.50     144,392      13.20      134,815

  Tianjin        11.72     81,039       10.40     79,466       9.31      68,424       8.30      67,056       7.30       68,069

  Inner Mongolia 23.80     41,757       23.94     46,853       20.90     43,081       16.50     40,350       18.80      51,940

  Hubei          11.04     30,447       9.00      30,224       6.80      21,800       4.30      12,388       4.20       13,458

  Yunnan         45.10     85,919       50.30     101,105      42.28     103,496      37.30     104,816      33.70      13,414

  Guizhou        7.20      7,010        8.08      7,675        7.70      7,854        7.40      9,406        4.80       9,262

  Qinghai        4.11      15,897       4.00      14,144       3.91      9,661        3.90      9,078        3.90       8,246

  Chongqing      2.20      5,688        2.25      7,020        1.98      6,226        1.80      6,225        2.70       6,441

  Tibet          1.00      5,506        1.05      5,299        0.83      5,405        0.50      5,072        0.60       5,577

  Zhejiang       0.40      1,036        0.33      845          0.24      936          0.20      1,100        0.20       810

  Fujian         0.20      257          0.20      380          0.20      311          0.10      302          0.00       151

  Shanghai       0.00      0            0.00      21           0.01      111          0.10      135          0.00       139

  Jiangxi        0.00      0            0.00      0            0.00      0            0.00      0            0.00       0

  Hunan          0.00      0            0.00      0            0.00      0            0.00      0            0.00       0

  Guangdong      0.00      0            0.00      0            0.00      0            0.00      0            0.00       0

  Guangxi        0.00      0            0.00      0            0.00      0            0.00      0            0.00       0

  Hainan         0.00      0            0.00      0            0.00      0            0.00      0            0.00       0

  National Total 2438.96   20,801,641   2254.01   20,431,230   2066.00   20,014,986   1938.30   19,240,985   1,900.50   21,001,776

  Source: China                                                                                                         
  Agricultural                                                                                                          
  Yearbooks                                                                                                             
  -------------- --------- ------------ --------- ------------ --------- ------------ --------- ------------ ---------- ------------

Pears

  -------------- -------- ----------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
  **Pear                                                                                                          
  Production                                                                                                      
  (1000 Ha and                                                                                                    
  MT) by                                                                                                          
  Province                                                                                                        
  1998-2003**                                                                                                     

                 1999                 2000                  2001                  2002                  2003      

  Province       1000 ha  MT          1000 ha   MT          1000 ha   MT          1000 ha   MT          1000 ha   MT

  Hebei          221.80   2,509,805   218.70    2,551,647   211.50    2,445,536   211.7     2,662,875   213.1     2,820,702

  Shandong       73.50    857,807     60.30     911,298     62.96     961,234     64.1      829,821     74.1      982,562

  Shaanxi        52.01    432,356     55.58     458,306     57.95     451,236     57.2      460,171     57.3      689,816

  Anhui          31.15    492,525     34.40     616,192     34.72     672,389     36.7      767,482     36.5      583,091

  Hubei          54.12    541,856     56.10     633,197     52.80     676,761     50.8      677,021     40.9      563,895

  Sichuan        34.20    272,066     48.20     344,472     52.30     394,805     61.9      469,702     71.2      547,714

  Liaoning       82.50    424,605     85.70     455,404     87.60     509,942     85.5      412,724     85.5      515,892

  Jiangsu        38.20    361,118     38.60     390,137     39.71     462,768     43.7      519,451     44.2      502,033

  Henan          28.77    263,003     31.00     333,000     32.80     395,919     35.5      479,640     36.7      433,413

  Gansu          57.30    222,097     54.50     245,941     52.40     266,001     50.6      266,254     51        286,128

  Xinjiang       28.60    198,148     33.90     194,879     42.67     226,967     45.8      308,989     47.7      249,537

  Zhejiang       12.80    114,341     16.65     147,563     19.40     188,737     22.1      147,842     24.1      244,454

  Yunnan         38.90    152,099     45.60     158,112     40.90     157,491     38.7      161,000     39.7      176,285

  Shanxi         30.60    118,816     31.20     128,577     29.78     139,782     30.3      104,019     27.9      154,901

  Chongqing      13.10    53,376      15.11     76,251      18.20     89,316      21.2      100,777     24.4      142,901

  Beijing        9.40     98,075      10.00     102,693     10.28     115,197     12.1      125,009     12.5      130,766

  Fujian         19.30    81,307      20.90     96,394      21.90     110,029     22.2      125,032     22.5      129,980

  Jilin          36.06    136,699     39.95     140,779     36.30     75,508      30.6      200,593     26.3      120,215

  Guizhou        15.60    46,114      18.34     47,677      25.30     66,606      28.4      82,385      31        97,867

  Inner Mongolia 30.20    111,872     27.14     109,605     23.56     103,160     15.1      93,676      13.6      93,020

  Guangxi        9.80     67,818      10.20     60,863      11.50     64,528      12        69,819      13.3      82,088

  Hunan          14.80    27,293      16.30     35,558      20.20     55,348      20.9      63,237      24.1      70,750

  Jiangxi        21.00    38,899      23.60     42,109      19.20     42,790      21.3      48,795      21.8      45,181

  Guangdong      8.37     36,892      8.52      42,144      8.00      37,097      7.5       40,318      6.3       38,760

  Heilongjiang   6.60     29,804      5.76      26,250      5.27      27,965      6.8       44,863      5.7       35,379

  Tianjin        3.74     20,075      3.71      30,172      4.53      27,991      4.2       22,863      4.1       25,851

  Shanghai       0.90     16,298      1.10      17,369      1.30      15,752      1.9       12,752      2.1       17,931

  Ningxia        2.34     10,114      2.47      9,058       2.25      9,071       2.4       6,707       2.6       12,430

  Qinghai        1.02     5,931       1.10      5,963       1.06      5,525       1.1       5,228       1.2       4,418

  Tibet          0.10     492         0.11      803         0.09      646         0.1       387         0.1       464

  Hainan         0.00     0           0.00      0           0.00      0           0         0           0         0

  National Total 976.78   7,742,331   1,014.7   8,412,413   1,026.0   8,796,097   1,042.4   9,309,432   1,061.5   9,798,424

  Source: China                                                                                                   
  Agricultural                                                                                                    
  Yearbooks                                                                                                       
  -------------- -------- ----------- --------- ----------- --------- ----------- --------- ----------- --------- -----------

Grapes

  -------------- -------- ----------- -------- ----------- -------- ----------- ------- ----------- ------ -----------
  **Grape                                                                                                  
  Production                                                                                               
  (1000 Ha and                                                                                             
  MT) by                                                                                                   
  Province                                                                                                 
  1999-2003**                                                                                              

                 1999                 2000                 2001                 2002                2003   

  Province       1000 ha  MT          1000 ha  MT          1000 ha  MT          1000 ha MT          1000   MT
                                                                                                    ha     

  Xinjiang       41.30    610,415     59.10    683,645     70.55    661,524     87.9    908,069     91.7   1,066,331

  Hebei          39.40    447,002     42.80    523,601     46.34    580,139     51.5    758,280     52.1   803,418

  Shandong       29.20    362,593     36.50    475,325     49.67    619,141     54.6    640,723     65.9   761,031

  Liaoning       20.80    307,457     27.80    430,282     29.70    396,991     35.6    522,061     37.4   586,124

  Henan          12.24    182,392     16.80    208,280     18.15    280,331     20.4    304,982     21.6   331,036

  Zhejiang       4.60     97,346      5.14     114,569     6.20     132,849     7.1     145,171     8.2    172,714

  Anhui          3.54     48,868      4.60     56,156      5.06     76,062      8       100,306     7.6    161,600

  Sichuan        6.40     97,005      7.70     116,037     9.10     120,980     9.8     133,709     11.1   144,409

  Jiangsu        5.90     77,060      5.90     87,697      8.10     114,568     9.9     133,564     10.8   140,777

  Tianjin        4.02     76,547      5.27     102,201     6.00     114,154     5.7     137,909     5.9    140,060

  Shanxi         6.20     36,411      7.10     50,564      9.40     70,236      14      90,686      13.7   111,885

  Jilin          9.30     52,814      11.82    65,716      9.75     62,618      12.7    79,268      13.8   107,362

  Guangxi        2.70     25,455      5.20     39,427      7.80     63,058      8.6     79,197      8.6    94,210

  Shaanxi        4.38     37,669      5.31     41,550      6.87     58,206      10.3    61,896      11.4   89,925

  Gansu          3.00     20,150      4.20     22,194      6.87     32,008      8.8     52,442      9.4    63,343

  Beijing        1.90     23,070      3.10     33,961      4.08     43,361      4.8     50,972      4.5    63,053

  Hubei          5.27     70,952      5.10     74,788      4.90     68,301      4.9     59,850      5.7    57,415

  Fujian         2.20     32,449      2.60     38,702      3.10     39,291      3.9     48,775      4.5    55,801

  Yunnan         2.60     15,599      3.80     17,746      6.30     25,414      4.9     34,539      5.3    42,606

  Ningxia        4.18     6,577       5.42     8,959       6.61     20,582      7       22,639      7      41,407

  Hunan          3.40     14,960      4.00     18,764      5.30     24,218      8.3     28,850      9.8    36,944

  Shanghai       1.10     22,007      1.10     23,124      1.39     23,921      1.8     26,140      1.5    27,564

  Inner Mongolia 2.60     14,867      3.05     15,853      5.04     16,004      3.6     14,408      3.5    20,789

  Heilongjiang   1.50     7,249       2.02     9,611       1.64     10,513      1.6     14,506      2.1    19,122

  Chongqing      1.00     9,142       1.17     9,917       1.47     10,493      1.7     12,137      2.6    17,413

  Guizhou        2.50     9,077       3.54     10,241      3.20     11,306      3.2     14,708      3.4    15,895

  Jiangxi        2.00     2,892       2.90     2,681       1.76     3,294       1.8     3,560       1.8    3,631

  Qinghai        0.01     106         0.00     107         0.02     117         0       106         0.1    74

  Guangdong      0.00     0           0.00     0           0.00     0           0       0           0      0

  Hainan         0.00     0           0.00     0           0.00     0           0       0           0      0

  Tibet          0.00     0           0.00     0           0.00     0           0       0           0      0

  National Total 223.24   2,708,127   283.04   3,281,698   334.00   3,679,680   392.4   4,479,453   421    5,175,939

  Source: China                                                                                            
  Agricultural                                                                                             
  Yearbooks                                                                                                
  -------------- -------- ----------- -------- ----------- -------- ----------- ------- ----------- ------ -----------

# Consumption Tables

## Urban Resident Per Capita Income and Expenditures

  -------------- -------- ------------ -------------- ---------- -------- ---------- ------ ---------- -------- -------- -------
  **Urban                                                                                                                
  Resident Per                                                                                                           
  Capita Income                                                                                                          
  and                                                                                                                    
  Expenditures                                                                                                           
  by Region in                                                                                                           
  2002 by Value                                                                                                          
  in (RMB)**                                                                                                             

  Region         Income                Expenditures                                                                      

                 Total    Disposable   Living         Food       Dried or Meat,      Eggs   Aquatic    Dining   Fruit as Fruit
                 Income   Income       Expenses       Products   Fresh    Poultry, &        Products   Out      a % of   as a %
                                                                 Fruit &  Related                               Living   of Food
                                                                 Melons                                                  

  Average        8,177    7,703        6,030          2,272      168      455        59     170        414      2.8%     7.4%

  Beijing        13,252   12,464       10,285         3,472      313      566        70     163        853      3.0%     9.0%

  Shanghai       14,396   13,250       10,464         4,120      295      633        68     592        819      2.8%     7.2%

  Zhejiang       12,682   11,716       8,713          3,474      232      457        48     553        879      2.7%     6.7%

  Guangdong      11,961   11,137       8,988          3,460      216      852        46     365        860      2.4%     6.2%

  Tianjin        9,839    9,338        7,192          2,607      215      427        87     232        540      3.0%     8.2%

  Liaoning       6,941    6,525        5,343          2,075      205      386        74     173        210      3.8%     9.9%

  Tibet          8,627    8,079        6,952          2,837      199      605        45     59         192      2.9%     7.0%

  Fujian         9,861    9,189        6,632          2,881      197      609        65     546        348      3.0%     6.8%

  Jilin          6,523    6,260        4,974          1,809      195      334        57     101        231      3.9%     10.8%

  Xinjiang       7,453    6,900        5,636          1,913      182      421        44     54         375      3.2%     9.5%

  Hunan          7,372    6,959        5,575          1,986      173      434        43     102        331      3.1%     8.7%

  Guangxi        7,757    7,315        5,413          2,201      162      689        39     187        351      3.0%     7.4%

  Shandong       8,158    7,614        5,596          1,928      161      332        75     121        345      2.9%     8.3%

  Yunnan         7,690    7,241        5,828          2,423      160      474        49     71         603      2.7%     6.6%

  Ningxia        6,409    6,067        5,105          1,774      158      308        35     41         336      3.1%     8.9%

  Chongqing      7,663    7,238        6,360          2,419      156      574        65     98         450      2.4%     6.4%

  Hebei          7,015    6,680        5,069          1,795      154      330        74     96         162      3.0%     8.6%

  Jiangsu        8,739    8,178        6,043          2,442      154      496        66     241        401      2.5%     6.3%

  Gansu          6,524    6,151        5,064          1,793      150      273        44     40         339      3.0%     8.4%

  Heilongjiang   6,334    6,101        4,462          1,585      149      304        57     80         189      3.3%     9.4%

  Sichuan        6,989    6,611        5,413          2,156      146      531        59     69         352      2.7%     6.8%

  Shaanxi        6,747    6,331        5,378          1,833      140      254        46     49         449      2.6%     7.6%

  Jiangxi        6,521    6,336        4,549          1,844      136      417        48     111        239      3.0%     7.4%

  Inner Mongolia 6,341    6,051        4,860          1,532      133      305        44     40         230      2.7%     8.7%

  Guizhou        6,107    5,944        4,598          1,789      132      431        41     42         277      2.9%     7.4%

  Qinghai        6,499    6,171        5,043          1,851      128      382        41     49         297      2.5%     6.9%

  Hainan         7,174    6,823        5,460          2,436      126      657        26     354        490      2.3%     5.2%

  Hubei          7,142    6,789        5,609          2,088      120      390        51     115        432      2.1%     5.8%

  Shanxi         6,528    6,234        4,711          1,531      120      225        64     35         207      2.5%     7.8%

  Henan          6,516    6,245        4,505          1,517      110      294        63     38         211      2.4%     7.2%

  Anhui          6,335    6,032        4,737          2,045      99       418        79     106        321      2.1%     4.9%

  Source: 2003                                                                                                           
  China                                                                                                                  
  Statistical                                                                                                            
  Yearbook,                                                                                                              
  Table 10-15                                                                                                            
  -------------- -------- ------------ -------------- ---------- -------- ---------- ------ ---------- -------- -------- -------

## Per Capita 2002 Purchases by Urban Residents Per Capita Income Level

  -------------------- ------------- ------------ --------- ---------- ------------ ---------- ---------- -------------
  **Per Capita Annual                                                                                     
  Purchases of Major                                                                                      
  Commodities of Urban                                                                                    
  Households by Level                                                                                     
  of Income (2002)**                                                                                      

  **Item/Consumption   **Average**   **Lowest**   **Low**   **Lower    **Middle**   **Upper    **High**   **Highest**
  (kg)**                                                    Middle**                Middle**              

  Fruits and Melons    56.6          31.7         44.5      51.0       57.9         64.2       70.7       74.7

  Fruit Wine           0.2           0.1          0.2       0.2        0.3          0.3        0.4        0.4

  Fresh Vegetables     116.5         102.7        109.1     112.7      116.1        122.0      127.2      126.6

  Fish                 9.6           5.7          7.1       8.1        9.4          10.7       12.4       14.5

  Shrimp               1.3           0.4          0.6       0.9        1.2          1.7        2.4        2.7

  Grain                78.5          83.3         82.3      79.6       77.7         77.8       76.8       71.4

  Pork                 20.3          15.7         18.3      20.0       20.8         21.6       22.8       22.4

  Beef                 1.9           1.2          1.6       1.8        2.1          2.2        2.2        2.2

  Mutton               1.1           0.7          0.8       1.1        1.3          1.4        1.3        1.2

  Poultry              9.2           5.2          7.0       8.1        9.2          10.4       11.9       13.3

  Eggs, Fresh          10.6          8.4          9.8       10.5       10.7         11.1       11.6       11.1

  Source: State                                                                                           
  Statistics Yearbook                                                                                     
  2003, Table 10-12                                                                                       
  -------------------- ------------- ------------ --------- ---------- ------------ ---------- ---------- -------------

## Per Capita Historical Purchases by Urban Residents Across Commodity Comparison

+----------------+------+------+------+------+------+------+--------+
| #######        |      |      |      |      |      |      | **1990 |
| # Per Capita A |      |      |      |      |      |      | to     |
| nnual Purchase |      |      |      |      |      |      | 2002** |
| s of Major Com |      |      |      |      |      |      |        |
| modities of Ur |      |      |      |      |      |      |        |
| ban Households |      |      |      |      |      |      |        |
+----------------+------+------+------+------+------+------+--------+
| **It           | **19 | **19 | **19 | **20 | **20 | **20 | **%    |
| em/Consumption | 90** | 95** | 99** | 00** | 01** | 02** | Ch     |
| (kg)**         |      |      |      |      |      |      | ange** |
+----------------+------+------+------+------+------+------+--------+
| Fresh Fruits   | 4    | 4    | 5    | 5    | 59.9 | 5    | 37.48% |
| and Melons     | 1.11 | 4.96 | 4.21 | 7.48 |      | 6.52 |        |
+----------------+------+------+------+------+------+------+--------+
| Nuts and       | 3.21 | 3.04 | 3.26 | 3.3  | 3.37 | 2.76 | -      |
| Kernels        |      |      |      |      |      |      | 14.02% |
+----------------+------+------+------+------+------+------+--------+
| Fresh          | 1    | 11   | 11   | 11   | 11   | 11   | -      |
| Vegetables     | 38.7 | 6.47 | 4.94 | 4.74 | 5.86 | 6.52 | 15.99% |
+----------------+------+------+------+------+------+------+--------+
| Pork           | 1    | 1    | 1    | 1    | 1    | 2    | 9.86%  |
|                | 8.46 | 7.24 | 6.91 | 6.73 | 5.95 | 0.28 |        |
+----------------+------+------+------+------+------+------+--------+
| Beef and       | 3.28 | 2.44 | 3.09 | 3.33 | 3.17 | 3    | -8.54% |
| Mutton         |      |      |      |      |      |      |        |
+----------------+------+------+------+------+------+------+--------+
| Poultry        | 3.42 | 3.97 | 4.92 | 5.44 | 5.3  | 9.24 | 1      |
|                |      |      |      |      |      |      | 70.18% |
+----------------+------+------+------+------+------+------+--------+
| Aquatic        | 7.69 | 9.2  | 1    | 9.87 | 1    | 13.2 | 71.65% |
| Products       |      |      | 0.34 |      | 0.33 |      |        |
+----------------+------+------+------+------+------+------+--------+
| Grain          | 13   | 97   | 8    | 8    | 7    | 7    | -      |
|                | 0.72 |      | 4.91 | 2.31 | 9.69 | 8.48 | 39.96% |
+----------------+------+------+------+------+------+------+--------+
| Source: State  |      |      |      |      |      |      |        |
| Statistics     |      |      |      |      |      |      |        |
| Yearbook 2003, |      |      |      |      |      |      |        |
| Table 10-10    |      |      |      |      |      |      |        |
+----------------+------+------+------+------+------+------+--------+