Somewhere around 2010 China’s growing middle class population became the world’s largest importer of pecans for consumption. I specify the consumption detail in that statement for the reason that the US has long been the largest importer of pecans, importing a large portion of Mexico’s pecan crop, however much of what is imported into the US is used for the dual purpose of pecan exports to other countries along with keeping domestic farmgate pecan prices suppressed.
The increase of pecan consumption in China was largely an event driven by a short walnut crop in China and rising demand for nuts. Chinese buyers and nut processors found a higher quality alternative in the pecan nut and began purchasing in-shell pecans here in the US directly from growers in the orchards.
The US Pecan Growers Council led the way in promoting pecans in China and working to reduce pecan tariffs down to 7% from around 30% which helped to dramatically increase pecan imports. By 2012 China was importing 60,000 metric tons (130.2 million pounds) of pecans from the US. In 2017 Chinese buyers purchased 120 million pounds of pecans in the month of November of which 115 million pounds was in-shell. Because Chinese buyers purchase mostly in-shell, growers were able to sell directly to Chinese buyers, this increased farmgate pecan prices by 3 fold in many cases pushing growers to invest in this new customer.
During the first Trump administration President Donald Trump began issuing tariffs on Chinese imports into the US to address trade imbalances between the two economies and China responded in kind leading to dramatically increased tariffs on many products shipping from the US to China of which pecans and many other farm products were caught in the crossfire.
Chinese buyers immediately reposed by shifting purchases to pecans produced elsewhere such as South Africa and Mexico. With the influx of demand in-shell pecan prices continued to strengthen in South Africa who currently exports around 97% of their pecan crop to China.
Now with the China and US trade war heating up again, China is looking to secure favorable trade deals with other countries and has recently announced the removal of all trade tariffs for 53 of the African countries including South Africa which will of course include pecans. This is a positive note for South African pecan growers further cementing a relationship with their largest customer. However diversification can offer more security in the long run as American pecan growers can attest to. Since the first trade war began Chinese buyers naturally looked elsewhere to fulfill their ongoing purchases, and with geopolitical relationships touchy at best, it is likely that Chinese pecan purchase will stay largely in the countries with lower trade tariffs.
