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Friday, Mar 29, 2024

Sunkist, Ventura Farmers Apt To Gain From U.S.-China Pact

San Fernando Valley-based Sunkist, one of the nation’s largest citrus growers’ cooperatives, stands to be among the big gainers if the World Trade Organization approves the U.S.-China trade deal, making China a WTO member. Sunkist officials believe the cooperative’s 6,500 member farmers in California and Arizona could reap more than $500 million in China sales over the next five years, with a good chunk of those sales originating from Ventura County. “Certainly, (the trade deal) has major potential for U.S. agriculture, and Sunkist in part,” said cooperative spokesman Bill Quarles. “There are 6 billion people in the world and 1.3 billion of them in China. It’s a tremendously large population to feed. There’s tremendous demand for food products now, and in the future, as the economy grows and their per-capita (income) increases, they will be looking for better food products.” Ventura County farmers account for 35 percent of Sunkist’s sales, and if that percentage holds true for China, the new business could result in $175 million in additional sales for the county’s growers over the next five years. Sunkist had revenues of more than $1 billion in 1998, but the cooperative expects a significant drop to $851 million in 1999, due to crop damage sustained in early 1999. Cold weather last winter wiped out 40 percent of the San Joaquin Valley harvest. It also destroyed $43 million worth of Ventura County’s lemon crop, and $21 million of the county’s orange crop. But Sunkist now hopes to recoup some of those losses by expanding its sales to China. Under the new agreement, China will reduce agriculture tariffs from an average of 31.5 percent to 14.5 percent by 2004. It will also allow for private trade between the two countries for the first time, and more importantly, it will open up trade for citrus products. The two countries reached a tentative agricultural trade agreement in April. Unlike other parts of the U.S.-China trade deal, agriculture products will begin trading almost immediately. Sunkist expects to export primarily navel oranges, Valencia oranges, lemons and grapefruits to China. Ventura County’s biggest crop is lemons, which generated $178 million in sales in 1998. Valencia oranges, the second largest crop, accounted for just $43.5 million in 1998 sales. Lemons are a fairly inexpensive crop, and local farm officials are also hoping demand from the new market will boost prices. “One of the main things in marketing is, once you open up a large market, you run demand up by so much more. If you’ve already flooded the U.S. market with lemons, you need another market to keep the price up,” said David Buettner, chief deputy agriculture commissioner for Ventura County. Sunkist already markets its citrus products in Hong Kong, Japan, Taiwan and other parts of Asia. Some of that produce already likely makes it into mainland China through illegal channels, trade officials say. Chinese officials are expected to visit the United States in the coming weeks, at which time farmers will get a better idea of what the trade pact will mean to agriculture. China is requiring a higher degree of monitoring against infestation from Mediterranean fruit flies than is currently demanded by other export countries, a factor that could cause problems for inspectors. “It could be a significant manpower strain,” Buettner said. “We won’t know until the Chinese officials come over.”

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