The Chinese Celebration known as the Spring Festival will end this Saturday in China and around the world marking the end of the New Years Celebrations. The celebrations end with a beautiful “Lantern Festival” where many brightly colored and decorated lanterns are hanging and released into the sky.
The Chinese celebration of the New Year in years past was a big deal for the American Pecan industry, as many pecans made their way from pecan farms in Georgia, Texas and Alabama to the ports in China and ultimately to consumers in China to be given as gifts during the celebration of the New Year.
Since the onset of the trade war, that has all but stopped. Chinese buyers have all but stopped imports of pecans from the US due to extremely high tariffs placed on American Pecans by the Chinese government when entering China.
Chinese buyers instead have turned to Mexico to help fill the gap where the tariff on pecans is still at the lowered 7% as compared to the 47% on American pecans. Mexican pecan growers have been eager to fill the void, as prices to Mexican pecan growers have risen to levels higher than their American counterparts for the first time in history.
But its not just the Chinese that prefer Mexican pecans, American shellers prefer Mexican pecans as well. Over the past decade, American shellers have increased imports of Mexican pecans more each consecutive year setting new import records each year. This is actually a sore subject amongst American Pecan growers and American shellers.
American Pecan growers recently passed and funded the federal marketing order, only to have the on the farm value of their pecans drop to the lowest levels in nearly a decade, all while pecan consumption increases.
American pecan shellers don’t like to divulge the fact that they are importing more Mexican pecans than ever before, because several of the importers actually sit on the board of the American Pecan Council and this of course is a conflict of interest.
The Chinese market is one that American Pecan growers have been working in for more than a decade and until the trade war ensued, had become American Pecan growers largest customer. Chinese buyer have purchased slightly more pecans this year than last year, but sales are still dismal in comparison.
American growers still have high hopes for the Chinese market and still continue to market in China, while developing other markets around the globe. The American Pecan Council staff has done a great job in developing the domestic market right here at home, which still leads pecan shipments globally. Many industry officials say Americans are still the best market for the “super nut” , and the council is investing heavily in developing the consumption right here at home.
The Chinese celebrations will culminate this week with the lantern festival, but since the outbreak of the coronavirus, the celebrations have been far less than in years past. For example, in Shanghai, a city that is home to over 24 million people, the city looks like a ghost town, with almost no cars on the roads and no one traveling the sidewalks. If you have ever been to China, you understand how different this is from regular daily life, especially during the largest celebration of the year for Chinese people.
The shut down of transportation has dealt a major blow to the Chinese economy as well, causing billions in lost revenue for many sectors of the Chinese economy. See the piece by the Washington Post for more on the effects on the Chinese economy at the link below.
