California Citrus Mutual President Casey Creamer held meetings last week with top trade officials within the United States Trade Representative (USTR) and the US Department of Agriculture (USDA).
The messages were simple and clear. He congratulated President Donald Trump's administration on the completion of the Phase One Trade deal with China, but also strongly communicated that the citrus market is continuing to suffer due to high retaliatory tariffs.
Creamer highlighted that navel sales volumes were down 36% in 2019 compared to the prior three-year average. Continuing that 2020 is starting much lower than in 2019. Creamer also indicated that we see pricing impacts outside of China and that grower returns are well below the cost of production.
Administration officials replied that they fully intend to ensure that China keeps its commitment to purchase additional agricultural commodities, according to CCM officials. In addition, to date, they have received no request from China to reduce the buys based upon the coronavirus outbreak.
Creamer emphasized the need for citrus to be prioritized when the Phase One deal became effective on Feb. 14 with the peak export season beginning around March 1 and that additional citrus purchases would be beneficial for Chinese consumers dealing with the coronavirus.
China recently announced that they were halving the retaliatory tariffs placed on agricultural commodities on Sept. 1, 2019. This only reduced the additional tariffs by 5% for citrus, with the total tariff and value-added tax (VAT) of 65%.
This tariff reduction on its own will not lead to a change in the market, citrus industry leaders said. China must ramp up purchases soon for the market to return to some level of normalcy, they added.
CCM says it will continue to work closely with industry marketers to help USDA and USTR enforce the China Phase One agreement.