Citrus commission to study China's industry

Florida Citrus Commission is going to study to China's citrus production and trade to try to keep that country from gaining competitiveness with the United States' dominance. Last month the Commission OK d a $174,941 study of the Florida citrus industry's future to get ahead of any problems the U.S. industry could face before it gets too competitive. The commission unanimously approved the study and didn't ask Bob Norberg nor his colleague Zhifeng Gao any questions at its Dec. 15 meeting in Bartow. Not too much is known about the Chinese citrus industry now, said Norberg, the deputy executive director of the Florida Department of Citrus, but it has grown tremendously in the last five years. It now ranks third in the world in production and shipping behind the United States and Brazil.
The need for the study came from a trip Norberg took to China where he learned how much citrus is being grown there. He told the Florida Citrus Commission at its December meeting that one man at the end of his presentation said with his hands over his head that China will dominate the world in citrus production in five years.
"I said, 'Well, this can't be good,'" he told commissioners. He added he doesn t know what they plan to do to accomplish that, but if the apple juice trade is any indication, China had no share in that market five years ago and now it trades with about 75 percent of the world.
The goal of the project, which began Jan. 6, is to answer four questions. Will China achieve its goal of production? Will China's demand for citrus surpass its supply? Will there be new markets for orange juice in China? Will China's pomelo be a competitor to Florida grapefruit? The objective to the research project is to determine the Chinese supply and demand for orange juice, Chinese consumer attitudes about orange juice, and export potential for Chinese grapefruit and pomelo. The pomelo market is one area that has sparked Norberg's concern. "There is some conflicting data coming out of the orange juice industry," Norberg told commissioners. On one hand, he said, the United States did not see any citrus from China five years ago, but on the other hand, pomelos are showing up in the United States traditional European markets.
Florida's juice processors annually buy 95 percent of the state's orange crop. Brazil accounts for nearly 55 percent of the world's annual orange juice production, while Florida produces about 30 percent, mostly sold in the U.S. Currently China produces about 2.9 million metric tons of oranges which ranks it fourth in the world behind Brazil at 17.1 million metric tons, the U.S. at 11.3 million metric tons and Mexico at 3.5 million metric tons. In grapefruit China's production of 931,000 metric tons is second to 2.2 million metric tons from the U.S. To achieve the study's goals the team plans to send people to China and Europe to get figures. It also plans look at the Chinese soil. "We've got consumer surveys that we will use in Europe and do a study with the United States and China with it," he said. He also said he's got surveys people will use with Chinese consumers to see how much orange juice they drink and see if it's imported juice or locally grown juice.
"We'll also do a biological assessment of the soil and see if they can grow good citrus," he said. A third item, he said, is to develop a database in which to use this information. "We believe we see conflicts so we need a good data repository," he said. Gao told commissioners some information they do know is that the Chinese citrus industry has been "developing rapidly" and the quality of their products has significantly improved. "The share of orange juice production in China from 2002 to 2007 has increased by 900 percent," Gao said. "The numbers are pretty aggressive."
From 2002 to 2007 the amount has increased by 40 percent while production in the United States has increased by 7 percent.
By person, the consumption of orange juice has grown in China by 170 percent and 59 percent in the world, he said. In the United States it has grown 13 percent in that time. The money for the study is budgeted, Norberg said. Because of the Florida Citrus Commission's fiscal calendar it will include money from three years. The study will get about $61,000 this year, $63,000 the second year and $47,000 the third. Norberg said he will keep the commission updated on their progress.