Date
17 January 2017
Mario Alejandro Andrade Cárdenas says China is a growing market for Mexican produce. Photo: EJ Insight
Mario Alejandro Andrade Cárdenas says China is a growing market for Mexican produce. Photo: EJ Insight

Mexico to double berry output in four years with China’s help

Mexico expects its berry production to double in the coming four years with rising demand from China, the world’s second largest economy.

Mexican berry exports, which include blueberries, raspberries, blackberries and strawberries, are worth about US$1.5 billion a year, up 20 percent every year, Mario Alejandro Andrade Cárdenas, vice president of Foreign Trade of the National Agricultural Council (CNA), told EJ Insight.

“With such strong growth, which is partly contributed by China, it is likely that we will be able to double our production of berries in about four years,” Andrade said.

“We have seen strong growth of our berry exports to China after the signing of protocols for raspberry and blackberry in late 2014. We are expecting to close the protocols for strawberry and blueberry as early as possible.”

About 5,000 Mexican berry growers are based in Baja California, Jalisco, Michoacán, Guanajuato and Puebla, using 25,000 hectares of farmland and providing 120,000 permanent jobs.

About 85 percent of their produce is exported to the United States, which has almost all its imported strawberries coming from Mexico.

In November 2014, the Chinese government agreed to import raspberry and blackberry from Mexico, with the first batch of produce arriving in Shanghai in January last year.

However, competition from Chile and Peru remains a big hurdle for Mexican berry exporters.

High tariff

“We are directly competing with Chile and Peru in the Chinese market. They have free trade deals with China but we don’t… we are facing a very high duty of 25 percent, which is a negative factor,” Andrade said.

He hopes the Chinese government will cancel the 25 percent tariff on Mexican berries. He said Mexican berries are more competitive than those from Chile and Peru as Mexico can offer up to nine months’ supply due to seasonal advantages.

Also, the production of blueberries in Mexico is growing 70 percent every year and will become one of the biggest categories in the country’s agricultural sector, he said.

Chile and Peru, both of which are major copper exporters, signed free trade agreements with China in 2005 and 2009, respectively.

They enjoy zero tariff for many of their agricultural produce to China, including berries. Chilean blueberries have been shipped to China since 2012 while the Peruvian variety will be shipped from next month.

At present, Canada, Chile and Mexico are among the world’s biggest suppliers of blueberries.

Peru’s Agriculture Minister Jose Hernandez said earlier this month that the South American country will boost its blueberry production over the next two years.

Mexican avocado

Mexico is the largest supplier of avocado in the world, accounting for about 45 percent of supply. 

Total exports of Mexican avocados are likely to reach US$1.8 billion this year compared with the country’s tomato exports of US$2 billion.

Between 2013 and 2015, Mexico’s avocado exports to China have increased nearly 13-fold.

From 2016, China has lowered the tariffs for avocados to about 10 percent from 25 percent, according to a report by Producereport.com.

Mexico benefits the most from the cut as competitors such as Chile and Peru have already been enjoying zero tariffs with free trade agreements with China.

However, Mexican avocado exporters still have to pay 11.3 percent more tax in China than their rivals.

Andrade said the situation remains unfair to Mexico as consumers may make price a higher priority when buying fruits in supermarket although Mexican avocados have higher quality.

He said he hopes the Chinese authorities will further cut tariffs on Mexican produce.

The Comprehensive Strategic Partnership established in 2013 by the Mexican and Chinese presidents sets out an increased presence for Mexican products in the Chinese market as a key priority, said Damián Martínez Tagüeña, Mexican consul general in Hong Kong.

“Great progress has been made as a result of our continuous bilateral dialogue on a broad range of issues, benefiting both producers and consumers,” he said.

“Mexico’s agro-food exports grew by almost 14 percent in 2015 and we were the country that signed the largest number of access protocols with China last year.” 

Donald Trump

Andrade said the coming US presidential election may have a negative impact on Mexican agricultural exports but he is not worried too much if Republican candidate Donald Trump, who has promised to build a wall at the US-Mexico border, wins.

“There are 70,000 trucks crossing the US-Mexico border every day. If Trump closes the border for one to two weeks, there will be no food from Mexico. The US population will suffer,” he said.

He said Mexico is the back garden of the US and it will continue to treat the US as a major market.

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JP/RA

Chief reporter at EJ Insight

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