NEW GRADING AND MARKETING STANDARDS FOR CHINA DR. RANDY D.HUDSON NATIONAL PECAN GROWERS COUNCIL
CHINA
China – A Very Important Market
山核桃 Shan He Tao [$5.00/LB.] 碧根果 Bi Gen Guo [$12.00/LB.] 长 寿果 Chang Shou Guo [$30.00/LB]
HIGH VALUE MAIL ORDER BUSINESS
2012 POOR US QUALITYISSUES CHINA STANDARDS PROPOSAL • Proposed By China in 2012 as a result of disputes between US Pecan Industry and Chinese Processors • Problems involved contracted quality issues concerning grade, count and uniformity The first Chinese • Standards were released for comment in Spring 2013
BEIJING SUMMIT ON GRADING AND STANDARDS December, 2013
Pecans Are Not Uniform In Size and Shape as Other Nuts
Explaining the Impact Of Grading and Market Standards on the Pecan Industry and China Markets Beijing, China December, 2013
China Grading and Standards • Count / Size – Number of Nuts Per Pound • Grade – Per Cent Kernel (Meat) to Shell • Uniformity – Size Variability and Shape • Moisture – < 4%
THE COMPARATIVE DIFFERENCES BETWEEN UNITED STATES AND PROPOSED CHINA STANDARDS ON SIZE CHINA UNITED STATES OVERSIZE <45 <55 JUMBO EXTRA LARGE 46 -55 56 - 63 LARGE 56 – 63 64 - 77 MEDIUM LARGE 64 - 77 NO DESIGNATION MEDIUM 78 – 95 78 - 95 SMALL 96 – 120 96- 120
PROPOSED “STANDARD” GRADES FOR SELECT VARIETIES VARIETY CHINA UNITED STATES STUART 45 - 50 44 - 50 WESTERN 57 - 60 54 - 60 DESIRABLE 52 - 54 48 -54 WITCHITA 58 - 62 54 - 62 PAWNEE 58 – 60 56 - 60 CAPE FEAR 54 - 56 50 - 56 MONEYMAKER 43.- 48 42 – 48 1) ANY PECAN GRADING BELOW THE PROPOSED LEVEL WOULD BE CONSIDERED “SUB - STANDARD”
UNIFORMITY 1) THE PRODUCT SHALL FORM A SINGLE GRADE SAMPLE – PURE BY VARIETY 2) IN A PRODUCT CONSISTING OF 2 OR MORE TYPES, THE MAJOR TYPE SHALL CONSTITUTE 92% OF THE TOTAL PRODUCT(S) 3) A PRODUCT CONSISTING OF LESS THAN 92% OF MAJOR TYPE OF 2 OR MORE PRODUCTS IS TO BE CALLED A BLEND, WITH BLEND TYPE DESIGNATION CONSISTING OF MORE THAN 75% OF TOTAL. 4) THE MINIMUM WEIGHT OF THE 10 SMALLEST NUTS IN A 100 NUT SAMPLE MUST EXCEED 7% OF TOTAL. (SAME AS USDA)
STANDARDS SIGNING CEREMONY BEIJING, CHINA SEPTEMBER, 2014
“SIZE, QUALITY AND UNIFORMITY” • LARGER THE NUT, HIGHER THE PRICE – DESIRABLE, OCONEE, MAHAN, STUART, SUMNER • NUTS NEED TO BE SIZED – JUMBO/EX. LARGE 14 – 16 ($2.45) ($2.90) – LARGE/MED.LARGE 12 – 13 ($1.60) ($1.60) • NUTS NEED TO BE BLOWN TO REMOVE POPS AND OFF-QUALITY NUTS (30% BLENDED WITH 52%) • LOADS NEED TO BE UNIFORM • (LONG SHINNY NUTS WITH SHORT FAT ONES)
China Consumption and Impact • China Imports 30-40% of US Production (60 – 100 million pounds annually) • China Consumes Nearly 70% of Eastern US Production • Has a Direct Impact on the price of Large Seeded Nuts > $50-$60 M Annually •
Significant Tariff Reduction • Reduced From 24% to 10% • A 14% reduction Adds an additional $50-75 million in Market Opportunity
Recent Effects of Standards Effort 1) Set of rules to govern and standardize the international trade of pecans between US and China 2) Tariff reduction from 24 to 10% 3)International HS Code – 0802909040
Free Port Zones Mainland In China • Tariff Free • Free transportation from Port to Zone • Bonded Freezer Storage Space • No storage or Tariff Charges until Sold and taken from Free Port Trade Zone by Customer
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