India has been a top-three export market for Washington apples. But shipments have softened in the last year due to a 20% retaliatory tariff the country implemented on U.S. apples amid an ongoing trade dispute.
That brings the overall duty for U.S. apples to India to 70%. Most other countries exporting to India have a 50% duty.
“That differential is significant,” said Mark Powers, president of the Northwest Horticultural Council, a Yakima-based organization that represents the Northwest tree fruit industry in public policy issues.
Now India has been in lockdown in response to COVID-19, which has suspended talks between the two countries, Powers said.
The lockdown also means open-air wholesale markets, where Washington apples are sold, are closed, said Toni Lynn Adams of the Washington Apple Commission, which does promotions internationally for the apple industry.
That has contributed to a drop in apple exports. As of mid-April, 25 million 40-pound boxes have been exported, below the 28 million boxes shipped during the same period during the 2017-18 crop year, when overall volumes were comparable.
With India’s lockdowns creating physical barriers to entry, the Washington Apple Commission has turned to digital promotions to engage with consumers there.
The commission partnered with one of the major retailers in India to promote apples on its website. The commission also sponsored a virtual fitness and lifestyle event featuring one of India’s lifestyle personalities.
“There are so many things that have changed with the (COVID-19) situation,” she said. “A lot of trade events that we normally would be part of are canceled. In-store events we had to postpone. It’s really shifting our marketing and rewriting how we want to move forward.”
There was a positive development with China, which has been in a trade dispute with the U.S. for the last two years. In February, Chinese importers were able to start requesting an exclusion that would reduce tariffs for U.S. products.
That mechanism was part of the first phase of an agreement between the two countries.
A series of retaliatory tariffs in the last two years had caused the overall duty for tree fruit to increase from 10% to 60%. The tariff drops to 25% with an exclusion.
The exclusion process went into effect in mid-February — just as the coronavirus outbreak was hitting China.
“The timing made it where we haven’t felt the positive impacts of that phase-one agreement,” Adams said.
With manufacturing in China limited to essential items, fewer ships with Chinese products have arrived in the U.S., which means there are fewer ships to send back U.S. products such as apples and pears.
“It reduces the capacity to do export sales,” DeVaney said.
The improving trade situation in China — along with an improving situation with COVID-19 — may benefit Northwest sweet cherries, which are currently in bloom. Cherry harvest, weather permitting, typically ramps up in mid-June and continues through July and early August.
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Coronavirus further impacts already-challenging export markets for Washington fruit - Yakima Herald-Republic
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