(Feb. 20) China’s rising exports of fresh produce will continue to pressure U.S. fruit and vegetable sales to Asia, the U.S. Department of Agriculture Economic Research Service said Feb. 14.

U.S. traders confirm the government’s report and say that China is aiming for greater access to the U.S. market.

Still, they say Chinese growth may be thwarted if their undervalued and artificially fixed currency is allowed to float to its true strength. That would make U.S. produce more competitive and reduce Chinese profitability.

China’s combined fresh and processed fruit and vegetable exports topped $5.1 billion in 2002-04, up from $2.3 billion in 1992-94.

The increase in Chinese exports was primarily concentrated in Asian markets and was accompanied by a sharp decline in the U.S. market share in those markets, the USDA said.

While processed fruits and vegetables account for 60% of China’s fruit and vegetable exports, the ERS report said the country’s fresh exports are growing fast.

In fact, fresh vegetable exports tripled in value from 1994 to 2004. Garlic and mushrooms, the USDA said, account for more than half of China’s fresh vegetable exports, combining to average more than $480 million annually during 2002-04. Other important exports are onions, carrots and radishes.

As for fresh fruit exports from China, the USDA said the value of shipments nearly tripled between 1994 and 2004. Apples accounted for more than half of total Chinese fresh fruit exports, and pears and tangerines also are exported in substantial volume.

China’s Asian neighbors account for about 75% of Chinese fresh vegetable exports, with Japan alone taking 31%.

Half of Chinese fresh fruit exports go to countries in Southeast Asia, the USDA said.

The USDA notes that the U.S. share of the apple market in Southeast Asia fell from 50% in 1997 to less than 15% in 2004. China’s market share rose from about 15% in 1997 to nearly 70% in 2004.

Meanwhile, the USDA said that China’s share of Japan’s import market for fresh vegetables increased from less than 10% in 1989-91 to 37% in 2002-05. Conversely, the U.S. share of Japan’s import market for fresh vegetables sank from 29% in 1994 to 19% in 2002-04.

Paul Shimizu, president of the trading company Jaspo Inc., Bellevue, Wash., confirmed China’s growing export influence has hurt U.S. exports in Asia.

Shimizu said apple and onion exports from the U.S. have particularly been hurt.

Chinese broccoli volume to Japan originally was heavy from December through February — when U.S. production was shifting south from California’s central coast — but now, he said, China is extending its growing season.

Chinese onions from its Shandong province are only a half day by ferry from South Korea, he noted. Chinese onions also are expanding their reach in Japan.

About four years ago, Shimizu said Japan bought close to 450,000 metric tons of U.S. onions and about 40,000 metric tons of Chinese onions. In 2005, he said, the market share was nearly reversed, with about 80,000 metric tons shipped by the U.S. while China accounted for almost 300,000 metric tons.

While China is in a position of strength, he noted that an appreciation of China’s currency could reduce its competitiveness. Some believe the yuan is undervalued by as much as 40%. If the yuan were revalued, it would help U.S. fresh produce compete both in Southeast Asia and in China.

One constraint of China’s growth as an exporter could be the growth of its internal demand for fruits and vegetables, both the USDA and traders agreed.

Shimizu said China’s internal demand for produce is growing, and consumers are acquiring a taste for onions and certain vegetables that haven’t been a part of their traditional diet.

While China’s influence has expanded in Southeast Asia and Japan, Shimizu said that China want to expand its fresh produce shipments to North America. He believes ya and fragrant pear varieties could show increased shipments to North America in future years. He said China also wants access for kiwifruit, apples and citrus in the U.S. market.

Dave Martin, export sales manager for Stemilt Growers Inc., Wenatchee, Wash., noted that while China largely commands fuji apple sales in Southeast Asia and is pushing fujis into Europe, there is demand for other varieties, such as the royal gala offered by U.S. growers.

“Chinese fujis are all over the place, but the European market is far more complex than the Asian market,” he said.