Report Highlights: 

In 2013, Taiwan was the third largest export market for U.S. peaches/nectarines, and also the third largest export market for U.S. cherries. Stone fruits are well received by Taiwan consumers, who like peaches, nectarines and cherries due to their attractive appearance, sweetness, and fragrance. Taiwan wholesalers and retailers also prefer stone fruits because of their profitably. In 2013, Taiwan imported 16,421 metric tons (MT) of fresh peaches/nectarines from the United States. Taiwan’s imports of U.S. peaches/nectarines increased 16% by volume while total imports also increased 16% during the 2013 season. Meanwhile, Taiwan’s imports of U.S. cherries decreased 55% by volume in 2013. However, the United States is still the largest supplier of cherries to Taiwan, and exported 4,401 MT, or nearly US$34 million, in 2013.

Executive Summary: 

In 2013, Taiwan was the third largest export market for U.S. peaches/nectarines, and also the third largest export market for U.S. cherries. Stone fruits are well received by Taiwan consumers, who like peaches, nectarines and cherries due to their attractive appearance, sweetness, and fragrance. Taiwan wholesalers and retailers also prefer stone fruits because of their profitably. Many Taiwan fruit importers have set up branch offices in China to handle shipments entering the market through their headquarters in Taiwan. These Taiwan importers import fruit not only for Taiwan but also for China. At present, however, U.S. fruit exports to China via Taiwan importers are unchanged from the previous year. 

Given Taiwan’s year-round availability and wide variety of local fruit, Taiwan consumers have developed sophisticated tastes for fresh fruits, with the result that Taiwan's per capita consumption is among the highest in the world. Attractive appearance (size, color, shape) and quality image are given significant weight by Taiwan consumers. People in Taiwan commonly send food products in gift packages to their friends and relatives during three major lunar year festivals: Chinese New Year (usually in February), the Dragon Boat Festival (usually in June), and the Moon Festival (usually in September). Imported peaches and cherries are among the most popular gift items included in these packages. 

In Taiwan, an estimated 26% of fresh fruit is purchased in modern retail outlets with hypermarkets being the most popular store format. These retail chains regularly conduct U.S. fruit promotions, offering significantly lower prices than in wet markets in order to draw consumers into their stores. Nevertheless, traditional wet markets continue to account for 50% of total fresh fruit sales while fruit specialty stores (16 %) and street hawkers (6%) account for the rest of the market share. In recent years, non-store retailing remains stable with home shopping and TV/internet sales accounting for the remaining 2% of total fruit retail sales. 

Peaches/Nectarines: In 2013, Taiwan imported a total of 21,553 metric tons (MT) of peaches/nectarines, which is valued at approximately US$48 million. Out of that total, the United States continued to dominate the Taiwan peach/nectarine import market, accounting for 76% of Taiwan's total fresh peach/nectarine imports. Taiwan’s imports of U.S. peaches/nectarines increased 16% by volume while total imports also increased 16% during the 2013 season. Currently, the United States supplies 33% of Taiwan's total consumption. The principal competition for U.S. peaches/nectarines is from local production with an estimated 27,156 tons harvested in 2013. 

Cherries: Taiwan does not produce cherries, so 100% of local demand must be met by imports. Taiwan’s imports of U.S. cherries decreased 55% by volume in 2013. Despite this decrease, the United States continued to supply the largest share of the Taiwan cherry import market in 2013 with 4,401 MT or nearly US$34 million. However, the entry of major southern hemisphere suppliers (e.g., Australia, Chile, and New Zealand) has shifted some market share away from U.S. suppliers in recent years. 

Fresh Peaches & Nectarines

Production: 

In 2013, Taiwan peach/nectarine production totaled 27,156 MT, a nearly 7% decrease below the 2012 output, due in part to excessive rain in April and the powerful Typhoon Soulik, which hit central Taiwan in July. The majority of peaches/nectarines are grown in the northern and central part of Taiwan. In 2013, the area planted declined to 2,314 hectares, a 59 hectare decrease from the previous year. 

For 2014, Taiwan's Council of Agriculture (COA) initially projected that domestic production of peaches/nectarines would reach 30,821 MT, an increase of nearly 13% from 2013. Area harvested was estimated at 2,328 hectares, a 1% increase from 2013. Nectarines (white flesh) are available in the market in May/June and peaches are harvested in July/August.

Trade: 

In 2013, Taiwan imported a total of 21,553 MT, or US$48 million, worth of peaches and nectarines, which represents an increase from the previous year of 16% by volume and an 18% increase by value. The United States had the largest market share (76%), followed by Chile (22%), Australia (1.20%), Japan (1.08%), and New Zealand (0.03%). Imports of U.S. peaches/nectarines increased 16% in terms of volume. Imports from major suppliers other than the United States also posted positive growth in volume: Chile (+11%), Australia (+60%), Japan (+25%), and New Zealand (+273%). Imports of peaches from Japan (approximately 200-500 MT/per season) are not a major threat to imports of U.S. peaches. Meanwhile, Chile managed to hold its position as the second largest supplier after the United States by increasing supplies and lowering the cost of production. 

However, the major direct competition to imports from the United States comes from locally produced peaches/nectarines; 27,156 MT produced in 2013. The United States is expected to remain the largest supplier of stone fruit varieties to the Taiwan market into the foreseeable future. Currently, imports of peaches/nectarines from China are prohibited due to phytosanitary concerns. 

Trade analysts predict that peach/nectarine imports will decline by 10%, falling to 19,398 MT in 2014/15. The reduction in import sales is, in part, due to strong demand and favorable selling prices in the U.S. domestic market. Taiwan importers, therefore, tend to be more conservative in placing orders with U.S. suppliers.

Fresh Cherries, (Sweet & Sour)

Production:

Taiwan does not produce cherries. 

Consumption: 

In 2013, Taiwan was the number five export market for U.S. Northwest cherries and the number four export market for California cherries. This market is particularly important for U.S. growers because they know that Taiwan consumers will pay premium prices for the largest cherries, with 9-10 row cherries preferred by local buyers. 

Although the bulk of fresh fruit in Taiwan is still sold in traditional wet markets, industry estimates indicate that 20-25% of cherries are now sold in supermarkets/hypermarkets. During the summer season, these chains often conduct U.S. cherry promotions with prices set below wet market prices in order to attract more consumers. As a result, these modern retail stores are taking market share from the wet markets. TV/Internet home shopping and convenience stores have also experienced significant sales growth in recent years in Taiwan. Online shopping, with home delivery service, is expected to continue to expand in the coming years. U.S. cherries remain one of the most popular gift pack items for the holidays. 

Trade: 

During the 2013 season, Taiwan’s total fresh cherry imports dropped significantly, nearly 45% by volume and 24 % by value, reaching a total of 8,284 MT or US$67 million. The United States remained the leading supplier with 53% of the market, followed by Chile (23%), Canada (10%), Australia (8%), and New Zealand (6%). The reduction in imports can be attributed to a decrease in production in the Unites States. U.S. cherry exports to Taiwan decreased 55% by volume and 36% by value in 2013. Other major suppliers also posted a negative growth in 2013: Chile (-40%), Canada (-30%), and New Zealand (-22%). 

Taiwan’s accession to the WTO in 2002 opened the market to imports from southern hemisphere suppliers: Chile, New Zealand, and Australia. U.S. market share continues to decrease since that time. Taiwan has also permitted the import of fresh cherries from China since 2002. However, imports from China have not yet had a significant impact on the market due to quality/food safety issues and importer concerns regarding consumer acceptance of Chinese cherries. 

Meanwhile, Taiwan’s import demand for cherries continues to grow. It is estimated that cherry imports will increase 67%, reaching 13,800 MT in 2014/15. An important factor is the near-record high production of Washington state cherries in 2014.

Policy: 

General Phytosanitary Requirements 

Stone fruit imports are regulated by three basic Taiwan regulations: the Food Sanitation Act, the Food Safety Management Regulations, and the Maximum Residue Level (MRL) standards. Taiwan currently bans imports of stone fruit from some countries due to pests of quarantine concerns. Imports of stone fruit from the United States require a phytosanitary certificate of origin issued by the office of Plant Protection & Quarantine (PPQ) of the Animal and Plant Health Inspection Service (APHIS) within the United States Department of Agriculture (USDA). The certificate must state that the fruit has been inspected and found free from relevant pests.

Taiwan also monitors MRLs of around 330 chemical compounds, checking shipments on a random basis. Taiwan's Department of Health (DOH) is in the process of reviewing a backlog of MRL applications for agrochemicals that are internationally-approved and commonly used in the United States and other countries. The Agricultural Affairs Office (AAO) at the American Institute in Taiwan (AIT), along with U.S. industry representatives, has been working with Taiwan authorities to develop a review process that will allow for the timely establishment of MRLs; not only for agrochemicals on the backlog lists, but also for new agrochemicals that would replace older, less effective compounds. These discussions are ongoing. 

The China Factor in Competition for the Taiwan Stone Fruit Market 

Taiwan has opened two stone fruit categories of fresh apricots (January 2007) and fresh cherries (February 2002) to China. To date, however, Taiwan has recorded no imports under either category. The import of stone fruit from China, while still a long-term threat to U.S. market share, is currently not considered a major competitor in the current market. 

While importers have indicated interest in testing China’s supplies of fresh cherries, logistical difficulties and quality control problems have so far prevented any sales except for 300 kilograms of cherries, which were imported into Taiwan in 2013. This is the first time that fruits produced in China have been exported into Taiwan. Cherries, with their unique position as a high-volume, high-value, short sales window item, represent both high-risk and high-profit for Taiwan importers. As such, established suppliers in the United States and other major fruit producing countries are still preferred by the Taiwan consumers due to their reliability and responsiveness. Imports of fresh cherries from China will not make an impact on the Taiwan market in the foreseeable future