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Trade & Investment

Egyptian oranges and the US-China trade war


China imported US$6.2 billion worth of fresh and dried fruit and nuts in 2017, up nearly ten-fold from 2005 (chart from Bloomberg)

A US Department of Agriculture’s Dec 15 report (EG/18031) states that ‘FAS Cairo forecasts a 5.1 percent increase in area planted and 9.6 percent increase in production based on growing demand for Egyptian oranges.

Russia, Saudi Arabia, Netherlands and China will likely remain the top import destinations for Egyptian oranges …”

Since 2-3 years ago, the sweet and juicy Egyptian navel oranges have strangely become rare in Hong Kong. Now I know why: all have gone to mainland China.

Egypt is the second largest exporter of citrus in the world. A journal in Egypt explains, “… Egypt competes with four countries, including Spain, which ranks first with exports of 1.6m tonnes; South Africa in third with 1.12m tonnes; the USA in fourth with 635,000 tonnes; and Turkey with about 400 tonnes …”

However, Egypt was only “the sixth largest producer of the world’s oranges after Brazil, China, the United States, the European Union (without Spain), and Mexico …”

It means although China is the 2nd largest producer, it imports lots and lots of oranges. A similar case is China’s purchase of peanuts from Senegal, a small country in West Africa (a former French colony). China is the “largest producer of peanuts in the world, with yields of more than 16 million tons per year, followed by India and the United States …” Yet the Chinese demand keeps on pushing the price of peanuts up, up and up.

Thanks to the US-China trade war, many Third World countries can sell more agricultural commodities to China. Bloomberg reported in Sept that even the Singapore-based Sunmoon had jumped into the wagon to help source different fruits for China, including “oranges from Egypt, kiwis from Italy and apples from Poland … The produce will fill the gap created when the Asian nation slapped tariffs on U.S. fruits as part of the escalating trade war between Xi Jinping and Donald Trump administration …”

And the key point is that “… the new business (Sunmoon is) doing in China underscores how the tariff ti-for-tat between the world’s two biggest economies is reshaping global trade flows … The Chinese market is one of the fastest growing in the world, though, and U.S. farmers will now find it that much more difficult to make potentially lasting connections there, according to Richard Owen, vice president of global membership and engagement at the Washington D.C.-based Produce Marketers Association …”

In other words, as the US-China relation is going to “hollow out”, China will turn to expand trades with the Third World nations more rapidly and widely, thus re-shaping the global trade flow pattern at a faster speed. It seems Robert Kaplan’s forecast that China’s growing population would bring anarchy to itself and Africa is more unlikely to happen.

The opinions expressed are those of the author, and not necessarily those of China Daily Mail.

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About keith K C Hui

Keith K C Hui is a Chinese University of Hong Kong graduate major in Government and Public Administration and the author of "Helmsman Ruler: China's Pragmatic Version of Plato's Ideal Political Succession System In The Republic" (2013).

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