China import ban on Taiwanese citrus fruits hurts pomelo farmers

RUISUI, Taiwan — In a sun-dappled orchard, Taiwanese pomelo farmer Jhan Jun-hao lays out a multipronged plan to prevent China's import ban from decimating income from his 130-odd trees of the pear-shaped, fleshy-skinned citrus fruit.

Ideally, he would secure new deals to sell domestically to major supermarkets. If that fails, he will try his luck at predawn auctions in wholesale markets.

"Of course I’m not optimistic," said the 33-year-old bespectacled farmer, who holds a master's degree in forestry. "Taiwan grows more fruit than it can eat, so that's why we need to sell abroad," he said, adding that there really is no No. 2 export market for pomelos. China is the only place one can hope to sell at scale.

On Aug. 3, the day after House Speaker Nancy Pelosi (D-Calif.) touched down in the self-governing democracy of 23 million that Beijing claims as its own, Chinese orders for Taiwan's pomelos were suddenly canceled, part of China's package of military exercises and trade measures designed to punish Taipei.

Chinese fighter jets, missiles and warships encircled Taiwan to send a threatening message about the Chinese Communist Party's readiness to invade if Taipei ever formalizes its independence. Even though the intensity of drills has dropped in recent days, analysts expect Beijing will continue with escalated economic coercion as part of an effort to punish the Taiwanese administration of President Tsai Ing-wen.

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In recent years, China has often used its vast market to pressure other governments. When South Korea deployed a U.S. antimissile system with a radar able to monitor Chinese launch sites, its companies in China faced boycotts and sudden inspections. A diplomatic spat with Canberra led Beijing to ban Australian coal and slap high tariffs on its wine imports, among other goods.

That same playbook is used on Taiwan. Citing quality concerns, Chinese customs announced it was suspending imports of Taiwanese citrus fruits, two kinds of fish and hundreds of packaged foods like cookies and instant noodles.

Although agricultural exports represent under 1 percent of the overall trade relationship, the ban has an outsize impact on Taiwan's fishing and farming communities. Taiwan's Council of Agriculture estimated that just over $20 million in trade would be affected. The pressure is greatest on farmers like Jhan who are scrambling to protect their income.

Guaranteeing a good price for seasonal fruit like pomelos is never easy. But China's ban means that supply has outstripped demand for bulk domestic sales, according to Liu Yuan-he, an auctioneer at the Taipei First Fruit and Vegetable Wholesale Market.

At 4 a.m. on a recent day, the 26-year veteran stood behind his electronic auctioning machine rattling through pomelo batches at a rapid clip. Compared with nearby stalls selling dragon fruit and lemons, the pomelo crowd was small and bidding subdued. Many lots went unsold.

"For Hualien, about 70 percent [of locally grown pomelos] would usually be sold overseas to mainland China. Now they don't know what to do with that 70 percent, so most will be auctioned," he said, referring to the Taiwanese county that includes Ruisui township. A bigger problem in the long run, according to Liu, is that young Taiwanese simply don't eat as much pomelo as the older generations. "They don't like having to cut them up," he said. "Pomelos will probably gradually die out."

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China's ban came at the worst time for pomelo farmers. When grown well with a smooth and unblemished skin, the fruit makes a popular gift for family and friends over the Mid-Autumn Festival on Sept. 10. Because the holiday, determined by the Lunar calendar, falls early this year and a hot, dry summer has delayed the harvest, there is only a short window between ripening and the holiday to sell.

"Taiwan's fruit exports remain heavily reliant on China, and the import bans have caused losses for farmers," said Christina Lai, an assistant professor at Academia Sinica, a state-founded research academy in Taiwan. "It is certainly quite difficult for the Taiwanese government and farmers to diversify tropical fruit exports immediately, which would incur significant costs from logistics and storage to identifying new business partners."

Democratic nations have increasingly banded together to resist China's global campaign of economic coercion. Taiwan's Ministry of Economic Affairs announced a $6.7 million fund this month to help diversify trade and grow markets in Japan, Southeast Asia and the United States.

After repeated incidents of Chinese economic coercion, Taiwan's producers "have gradually come to realize that the risks of the mainland market are relatively high," Min-Hsien Yang, professor at the Department of International Business and Trade of Taiwan's Feng Chia University, said in an interview.

"What I have never been able to understand is that even if current cross-strait relations are not good, [China] does not need to sacrifice products of farmers and fishermen," Yang added. From a political perspective, it seems to him like a losing strategy. As a proportion of total trade, it's tiny, but it affects a lot of people. China "wants more support, not more hatred, right?" Yang asked.

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In 2021, China remained the largest destination for Taiwanese exports at 19 percent of the total. The bulk of trade is in electronics and other technology products, which remain unaffected by Beijing's penalties.

Chinese imports from Taiwan have continued to rise since Tsai took office, despite Beijing's economic measures to punish what it claims are pro-independence policies adopted by the president and the Democratic Progressive Party.

Early in her career, Tsai was often critical of the Economic Cooperation Framework Agreement with China, which she once called a "sugarcoated poison pill," but she later softened her position on cross-strait trade. Her administration has sought to maintain communication, exchanges and trade with China but under the condition that the relationship must be mutually beneficial and should not be used as a tool to benefit China's economy while undermining Taiwan's.

Much of the action for resolving farmers’ concerns takes place in the headquarters of the Ruisui Township Farmers’ Association. In a building that once hosted a dinosaur museum, workers answer phone calls from frustrated farmers. In a move to find other ways to use up excess fruit, the association is branching out into pomelo soap, tea and salt.

Hhung Sheng-Huang, the group's director, said he is hugely stressed by trying to find domestic markets for pomelos previously expected to sell to China.

But he added that government support is already opening new sales opportunities, and efforts to process pomelos and automate aspects of farming are making gradual progress. Earlier this month, they held an event to demonstrate the first Taiwan-developed automatic pomelo peeling machine.

China's actions somewhat color how he views the country, but Hhung mostly thinks political disputes should stay out of the economy. "I just hope the other side of the strait can sympathize with the hard work of these farmers and not put political pressure on them," he said.