Issue link: https://read.dmtmag.com/i/629538
12 FEBRUARY 1, 2016 GOOD FRUIT GROWER www.goodfruit.com C herry exporters likely will face a challenging 2016 as China's contracting economy drags down other Asian nations with it, though the horizon holds a few bright spots. That's the message from Keith Hu, international mar- keting director for Northwest Cherry Growers, the promo- tional arm for cherry producers in Washington, Oregon, Idaho, Utah and Montana, based in Yakima, Washington. The outlook for next year is OK, he said — not very negative, "but there are for sure certain things we need to be cautious about." China heralds most of the bad news. Analysts expect the economic growth in the world's most populous nation to slow to between 3 percent and 7 percent, which would hamper the economies of its major trading partners, such as South Korea. In 2015, the two nations took in 43 percent of the Northwest's cherry exports, Hu said. China imported 1.81 million 20-pound boxes of cherries, a high volume, but didn't pay well in August for heat-damaged fruit shipped by ocean containers. "Speaking to many, many export managers, the final return is questionable," Hu said. Canada represented the largest cherry market at 32 percent of Northwest exports in 2015. Meanwhile, potential growth in Vietnam, Singapore and Thailand could help the industry weather China's storm, Hu said. Vietnam importers paid some of the highest prices at more than $60 per box before adjustments in 2015. Meanwhile, Hu expects more competition from Turkish cherries in China's markets. "We all know they produce decent cherries," Hu said. However, Northwest exporters have a shipping advantage over their Turkish competitors: a smoother, shorter drive to Sea-Tac Airport than Turkey's growers have to Istanbul, where the nation's closest international airport is located. On the bright side in China, Hu's marketing programs showed a higher return on investments — $184 dollars per $1 of promotion spending — of anywhere in the world. South Korea was second, with Mexico third. Also, Northwest cherries are reaching a broader geographic area in China, with exports up in China proper and down in Hong Kong, Hu said. Sea-Tac now offers two direct passenger flights to Beijing some days, opening up more cargo space. In spite of the struggles in China, the country still represents some of the strongest potential, Hu said. The nation will have 500 million middle class people within 15 years, Jack Ma, founder and executive chairman of online retail giant Alibaba Group, told CNBC in a November interview. Alibaba sells Northwest cherries through online orders, often at premium prices. Last year, Wapato, Washington, grower Peter Verbrugge helped ring the New York Stock Exchange bell when Alibaba sold its first public shares. Promise in the Philippines Hu has a hopeful hunch about the Philippines, a nation of 101 million people with rapidly growing cities and an expanding economy. "The Philippines have been on my radar for the past couple of years," he said. This year, Hu plans to apply for a grant of about $100,000 from the U.S. Department of Agriculture's Emerging Market Fund to train retailers and importers there how to handle and promote cherries. The cherry industry shipped about 4,500 boxes to the Philippines in Cherry CHALLENGES China's economic struggles may make for a difficult cherry export year. by Ross Courtney