The USDA FAS South Korea citrus annual outlook report has been issued, showing a big decline in the country's unshu orange output and continued big opportunities for U.S. oranges.

From the report:


Unshu orange production for MY 2010/11 is forecast at 530,000 metric tons, down more than 125,000 metric tons from last year’s bumper crop. The significant drop in the MY 2010/11 production is mainly due to a cyclical low crop, an early colder spring, and frequent rainfall during the summer. In MY 2010/11, fresh orange imports are expected to maintain the level at 110,000 metric tons.

Unshu orange (tangerines) production for MY 2010/11 is forecast at 530,000 metric tons, down more than 125,000 metric tons or 19 percent from last year’s bumper crop (655,000 metric tons). (Note: greenhouse production and late varieties are excluded from this estimate). The significant drop in the MY 2010/11 production is mainly due to a cyclical low crop, an early colder spring, and frequent rainfall during the summer. The quality of the crop for MY 2010/11 is slightly reduced due to unfavorable weather conditions.

 Because of colder weather during the flowering season, the number of tangerine flowers was reduced by 5 percent from the previous year. Also, frequent summer rains during the flowering season adversely affected fruit set and production. The market prices in MY 2010/11 for Unshu oranges are expected to increase sharply due to a smaller crop and reduced production of other local fruits such as apples, pears and persimmons.

The retail price for Jeju tangerine in December 2010 is already up by 50 percent from the previous year. Consequently, local fruit distributors are expected to increase the supply of imported of fresh oranges and table grapes in MY 2010/11. Several government and industry support programs to improve quality and limit production are discussed below. Marketing Orders The Jeju government will not submit marketing orders for citrus to the central government for MY 2010/11 because citrus production was less than the optimal level, which is 580,000 metric tons.

Additionally, another reason for not submitting marketing orders is because market prices have also increased by 50 percent in December 2010 from the previous year. Over the past 7 years, this is the second time that the Jeju government did not request marketing orders. Direct Payment Program Effective MY 2010/11 the Jeju government will eliminate its direct payment program but will encourage tangerine growers to control production levels voluntarily. In 2010, the area of tangerine tree thinning by the Jeju government was recorded at 558 hectares, which is 72.1 percent lower level than the 2,000 hectares in 2009.

Check Off Program
The Jeju government will continue the use of its citrus check-off program in MY 2010/11. The funding for this year’s program is 2 billion won ($1.7 million), which is the same as last year’s amount. The central government provides half of the funding. The remainder is collected through a 0.5 percent check-off fee from auction sales and producer group donations. Check-off funds are used for supporting marketing activities, developing foreign markets, training farmers to produce quality fruit, and improving marketing channels.


 Greenhouse Production:  In 2010, total production of greenhouse citrus is recorded at 21,124 metric tons, down 7 percent from the previous year due to unfavorable summer weather conditions. Greenhouse production is expected to increase slightly by 6.5 percent to around 22,500 metric tons in 2011. This increase will be due to current Jeju government production policies. The Jeju government is promoting greenhouse mandarin production stabilize supply.

Trade:  The export of Unshu oranges in MY 2010/11 is expected to decrease to 2,000 metric tons, down by 50 percent from MY 2009/10 due to higher domestic market prices. Consequently, Jeju Unshu orange growers are willing to provide more of the 2010 crop for domestic consumption than for exports.

Russia and Canada are the major markets for Jeju tangerines although they will import limited amounts in MY 2010/11. In 2010, the U.S. Animal and Plant Health Inspection Service (APHIS) issued the revised import requirements for Jeju tangerine exports to expand the area in the United States where Unshu oranges from Korea may be distributed. At present, Unshu oranges are exported to overseas markets under a voluntary contract plan between the Jeju government and growers each year.

 However, the provincial government plans to extend its contract period from one to two years in order to meet export commitments in the future. Over the next several years, the Jeju authority is planning to export 5,000 metric tons of mandarins to the United States annually. Additionally, the Jeju Citrus Growers Agricultural Cooperative is developing marketing and distribution strategies to successfully access the U.S. market.

 Imports of fresh oranges from January through October 2010 were 106,000 metric tons, a 54 percent increase from last year. The significant increase of imports is mainly due to the stronger Korean won and the poor harvest of domestic fruits in 2010. In MY 2010/11, fresh orange imports are expected to maintain the same level at 110,000 metric tons due to the anticipated availability of quality oranges in California and reduced domestic fruit production including apples and pears in 2010.

Through October, over 96 percent of all imports originated from the United States (101,787 metric tons) and the remainder from Chile and South Africa. U.S. oranges will continue to dominate the Korean market in MY 2010/11 and for the foreseeable future due to growing consumer preference for familiar U.S brands and quality oranges. Policy The mandatory pre-fumigation policy for the imports of U.S. fresh oranges to minimize the possible introduction of California red scale (CRS) was lifted as of November 2010.

The amended import protocol would ensure the continued import of high quality U.S. fresh oranges in MY 2010/11. Under the previous import protocol, Korea’s National Plant Quarantine Service (NPQS) required mandatory fumigation for imported California oranges to control the spread of CRS.