Tuesday, July 20, 2010


China's economic growth has given its citizens enormous buying power which is reflected by the newly acquired taste for luxury foods like tree nuts. Dry fruits and tree nuts are considered most expensive amongst agricultural commodities and with increased attention on these foods for their nutrition and health values international trade is looking up during the last few years. The insatiable appetite for high value and value added products in China is reflected by the enormous surge in demand for products like tree nuts which are produced in large quantities in the country, necessitating large scale imports.

"This year, China will emerge as the top foreign buyer of American almonds, more than doubling its purchases from two years ago, according to data from the Almond Board of California. Last year, China was the top foreign buyer of American walnuts, and in 2007, it became the leading export market for pecans. Altogether, China bought $737 million in tree nuts from the United States last year, up from just $89 million five years earlier, according to the United States Department of Agriculture. "They've basically gone from nothing to No. 1 in a relatively short period of time," said Keith Rigg, of the Minturn Nut Company, an almond grower and exporter in Le Grand, Calif. "It's really taken off like a rocket." The boom follows earlier increases in other American agricultural exports to China, including dairy and meat products, which rose as Chinese consumers became more affluent. But the increase in China's nut consumption has also depended in part on marketers' efforts to change eating habits and tastes. China is the world's leading grower of walnuts, and walnuts have long had a place in the Chinese diet, as in the moon cakes popular during the yearly midautumn festival. So it was easy for Chinese consumers to embrace American walnuts, which are often perceived as being of higher quality than the domestic version. But almonds and pecans were not widely available in China until recently. Complicating matters, the Mandarin word for almonds, "xing ren," is the same as the one for the small, often bitter apricot kernels that are also eaten by the Chinese".

Of course the Americans are happy that their products are finding market in a country with which it has enormous trade deficit. Though the value of the nuts imported by China is only a small fraction of the annual bilateral trade, it reflects the fact that better quality products can have a market in modern China, price not being a constraining factor. What can happen to the trade when Yuan is anticipated to appreciate again dollar remains to be seen.


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