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    What COVID-19 Has To Do With the Price of Cherries in China

    The past month was a rotten time to be in the imported fruit business.

    I’ve spent the past 16 years working in China’s imported fruit industry, but the past month may have been the hardest I’ve ever been through.

    The year started optimistically. Imports were up 24% in 2019, and we were preparing for the annual Lunar New Year sales season, when people across the country stock up on fruit to give guests or use in family celebrations. Domestically grown fruits have long been a part of holiday spreads, but in recent years imported items like Chile-grown cherries have become a particularly popular New Year’s gift.

    Then everything went pear-shaped. On Jan. 20, the government suddenly raised the alarm about a new coronavirus outbreak in the central province of Hubei. The disease, since renamed COVID-19, quickly spread nationwide, killing 3,123 people and sickening almost 80,000 more as of March 8. To combat the epidemic, officials implemented a series of escalating “hardcore” control measures, shutting down roads, closing public places, banning gatherings, and encouraging — or requiring — residents to stay home.

    These policies posed a hurdle to businesses around the country. My industry is no exception: With Lunar New Year’s parties canceled, people staying indoors, and potential customers generally limiting purchases to essentials such as meat, eggs, and vegetables, consumer demand for relative luxuries like imported fruit has shriveled. Based on my personal observations, cherry retail prices have sunk by about 40% to 50% during what should be their peak sales season.

    Wholesale imported fruit markets in Shanghai are generally open year-round. Most wholesalers stayed open during the epidemic, though they took preventative measures such as shortening business hours. Yet the number of buyers has dropped by more than 50% in the markets I’ve visited.

    Compounding the problem: Fruit has a definite shelf life. Imported fruits in particular have to be moved quickly after their long journey across the globe. Tropical fruits can only be kept for about a week after arriving in China; temperate fruits, for about two weeks to a month. Cherries and blueberries, which are usually fast sellers, begin to lose their sheen about a week after their arrival in China.

    In short, the longer fruit lingers on the shelf, the more likely it will have to be sold off at a loss. And that was bad news for an industry heavily dependent on what had become a paralyzed transportation network.

    Although the national government has pushed provinces to lift roadblocks and travel restrictions, based on my observations, fewer than half of all drivers have been able to return to work. Many are stuck in their rural hometowns, and those that make it out are often unable to find a landlord willing to rent to nonlocals in their cities of employment.

    Even those who can work are sometimes turned away at their destination if their officially listed place of residence is in an epidemic-affected area — even if they haven’t returned home in years. Others have been forced to undergo mandatory 14-day quarantines after every stop.

    With deliveries held up for weeks, the entire supply chain began showing signs of strain last month. And in imports, problems in one part of the supply chain can reverberate elsewhere. Last year, pork prices skyrocketed in China after an outbreak of African swine fever, leading many companies to buy pork from international suppliers. Late last September, however, the government released some of its strategic pork reserves to get prices back under control. Suddenly, the imported pork that was still on its way to China became more expensive than pork sold domestically.

    In an attempt to cut their losses, many importers breached their contracts, and containers full of frozen pork began piling up in the country’s ports. These containers have to stay plugged in, lest their contents go bad, but there were so many that subsequent refrigerated imports have since struggled to find available power sources.

    Although the situation has since somewhat improved, it remains unclear when the country’s logistics industry will return to some semblance of normalcy.

    In an attempt to limit the damage from all these problems, local and national officials have rolled out a raft of new policies targeting enterprises, including tax breaks and preferential loan treatment, but these are merely Band-Aids over a gaping wound. The goal of a company is to make money, not to minimize losses, and as long as normal operations are disrupted, no amount of targeted relief policies can make businesses whole.

    Generally speaking, however, sellers remain optimistic, reasoning that the country’s demand will likely continue to grow. In conversations with my international business partners, I’ve tried to reassure them about the future of the Chinese market: consumers may not be buying now, but they remain interested in imported fruit and access to fresh produce year-round. Orders need to be made in advance, however, so it’s all a bit of a gamble. All we can do is hunker down and try to survive the frost.

    As told to Sixth Tone’s Lu Hua.

    Translator: Lewis Wright; editors: Kilian O’Donnell and Lu Hua.

    (Header image: Wang Yiyun for Sixth Tone)