China’s Ban on Taiwan Pineapples Backfires as New Buyers Step In

(Bloomberg) - China's surprise ban on pineapple imports from Taiwan five months ago has been widely viewed as an attempt to undermine President Tsai Ing-wen's standing with a political electorate. Trade data shows that the move had anything but the desired effect.
The figures for the first half of the year collected by the Taiwan Agriculture Council show that fruit producers on the island have fared better since China began on 1. Deliveries to Japan in the four months to June rose more than eight-fold over the previous year 16,556 tons. A domestic campaign to boost demand also helped.
The helping hand of Japanese importers came as a pleasant surprise to Taiwan's excited farmers as they prepared for a fall in prices following China's move, calling it a normal precaution to protect biosecurity. The prickly fruit is one of a long list of products from Australian wine to coal to lobster. China has targeted sanctions to influence trade disputes.
"The bleeding stopped before it even started," said Chen Li-i, an official with the Taipei Agriculture Council.
Japan has now replaced China as the main overseas destination for Taiwan's pineapples. While it is unclear how long the ban will last - the postponement could well be reversed once restrictions are lifted - the humble tropical fruit has become an unlikely symbol of defiance in the region's geopolitical intrigues. Amid the rattle of sabers from Beijing, Japan and island democracy have expressed a widespread desire to forge closer ties. Tokyo leaders see their own security directly tied to that of Taiwan, which China claims is its territory.
Pineapples are an important source of income for farmers in central and southern Taiwan. About 11% of the tropical fruits harvested in Taiwan are sold overseas. Until the ban, they were almost exclusively shipped to China.
"The export orders are looking unexpectedly good," said Chiao Chun, chief executive officer of Harvest Consultancy Co. in Taipei. "That was really a crisis turned into an opportunity."
In addition to aid from Japan, an increase in domestic demand fueled by a “Save the Farmers” campaign on social media has rallied local buyers to support farmers. Even President Tsai pitched in the day after the Chinese ban came into effect.
The farmers also received passionate support from local businesses. Restaurants across the island stormed in to add a sweet touch of pineapple to all kinds of dishes, from shrimp balls, fried rice, and even the classic beef noodle soup. The Taiwan Railways Administration introduced a special edition lunch box with pineapple on the side.
As a result, domestic prices of the fruit rose 28% during the March-June period to an average of NT $ 22.1 (80 cents) per kilogram, a three-year high. The total value of pineapples sold locally rose 17%, according to the Chen Farm Council.
"Higher prices due to strong domestic demand resulted in more profit for farmers," said Chen.
Taiwan needs to review its export markets for the fruit, according to Young Fu-fan, a grower in southern Tainan County.
"Farmers can no longer expect to make 'easy money' with China," he said.
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© 2021 Bloomberg L.P.
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