The Past, Present, and Future of China's Citrus Industry

By Mr. Liu Xinlu,
Deputy Director General of Cropping Administration Department,
Ministry of Agriculture

Restructuring on a Well Set Foundation

Summary

China abounds in citrus fruits with a growing history of over 2000 years according to written records. China's citrus growing acreage and output increased 20 times in the past 50 years, during which fastest growth occurred after the 1980s. There was structural oversupply in mid-1990s, and acreage growth came to a standstill. However, significant change in varietal structure has taken place since then, namely, the proportion for satsuma and tangerine fell, while the share of navels, Ponkan oranges and pomelos rose. The current varietal structure is still dominated by loose-skin mandarin, accounting for some 55%, and 30% for sweet orange, 10% for pomelo, 5% for others. The maturity of citrus fruits concentrates in the short period from Nov to Dec, with a small percentage of early and late varieties. Only 5% of citrus fruits are for processing, by comparison, 95% are for fresh fruit consumption. Most of Chinese citrus fruits sell domestically, with only 2% of fresh fruits exported. Citrus juice on the Chinese market is mainly imported from Brazil and the United States. The canned segments produced in China are mainly exported to Japan.

Ladies and Gentlemen:

First of all, allow me to extend our heartfelt welcome to you to the 2001 International Citrus Symposium, which provides a good opportunity for the world citrus industry to exchange views, and for Chinese citrus to be geared to the needs of the world. We shall seize the opportunity to learn from your experience to improve the Chinese citrus quality, and thereby make further contribution to the world citriculture.

Now I'd like to make a briefing on the history and current status of China's citriculture, and then look ahead at its future perspective.

I. Long history and rich resources

China is the origin of many varieties of citrus. Chinese people started to tame citrus, and cultivate citrus fruits for commercial purposes long time ago, as recorded in "Yu Gong" of "Xia Shu" (history of Xia Dynasty), and "Huo Zhi Lie Zhuan" of "Shi Ji" (a famous historical record). And "Ju Song" (Ode of Citrus), a chapter of "Li Sao"(Encountering Sorrow); the well-known verse composed by Qu Yuan, a great poet over 2000 years ago highlights the fact. Varieties of Chinese citrus had long been spreading all over the world through different channels. Around the 1^st century B.C., citron, originally grown in China, was brought to Iran and then to the Mediterranean countries. Other varieties like sweet orange were gradually brought abroad through overland and maritime commercial intercourse. Relevant research shows that varieties such as Valencia, navel orange, satsuma, etc. originate from China as well.

There are a great number of varieties and species of citrus in China. "Ju Lu" (Record of Citrus), written by Han Yanzhi in Southern Song Dynasty in 1178, is the first monograph on citrus in China and the world as well, which records 27 species/varieties of citrus in total, mainly grown in Wenzhou, east China's Zhejiang province, with description of cultivation techniques. Studies by related scientists have proven that some of the citrus varieties recorded in this book are still under cultivation.

The Chinese Government has always been paying great attention to collection, protection and study on tree crop germplasms, including citrus trees. Daoxian wild orange was found in southern Hunan and Honhe padeda in Yunan province. Trifoliate orange originated in China, the common rootstock in many countries, serves as the parent stock for a hybrid which is now employed as a new generation of improved stock with multiple resistance. A great deal of local high-quality varieties, such as Nanfeng orange, Jin orange, Shatian pomelo, local early orange, tangerine, were explored and sorted out in the extensive survey and recording of citrus resources during 1950s-60s. The National Citrus Germplasm Nursery financed by the government in the 1980s conserves 1190 major varieties/species from China and the world as well. Huazhong Agriculture University has made progress in its study on in vitro preservation technology. Furthermore, selection and breeding of citrus varieties has made progress; development of a virus-free seedling propagation system has drawn high attention and full support from the governments at various levels.

II. Restructuring on a well set foundation

Since the founding of the PRC, the citrus industry has been developing rapidly with planting acreage and output increasing dramatically. Total output rose from over 200,000 T in 1952 to 10.1 million T in 1997 with an annual growth rate of 10%. The development of China's citrus industry can be defined into 3 stages: 1^st stage (from 1950s to 1970s): the citrus output increased slowly at a 5% annual growth rate with only 300,000 T increase over 20 years. During this period, the citrus industry was characterized by planned production/marketing, and rationed supply; 2^nd stage (from 1980s to early 1990s): the reform by the Chinese Government of the citriculture system, featured by relaxing control over market, price and distribution which greatly stirred up enthusiasm of farmers, resulting in the swift and stable development of citrus production at an annual rate of 25%. During this period, the citrus output was doubled every 4 years; 3^rd stage (from the mid-1990s to date) is the adjustment period. First, regional adjustment, i.e., reallocation of citrus acreage and output by provinces (autonomous regions, municipalities): with speeding up of overall adjustment of the agricultural structure in China citrus production was further centralized towards the advantageous areas such as Jiangxi, Hunan and Zhejiang, while citrus output in Guangdong dropped by degrees due to declining profit margins; second, varietal adjustment: the government put forward the policy of "controlling acreage, adjusting structure, improving quality and promoting profit" to tackle the problem of structural and seasonal oversupply for citrus production that emerged in the mid- and late 1990s. While the acreage is stabilized, varietal and quality structure adjustment is accelerated mainly through replacing old, rogue varieties with navel or other high quality varieties by top grafting. For instance, tangerine acreage in Sichuan and Chongqing and Weizhang satsuma decreased considerably, while early satsuma and Ponkan orange in Hunan, navel in Jiangxi, Hu pomelo in Zhejiang, Shatian pomelo in Guangdong and Guangxi increased sharply.

As the fruit with the second largest production in China, citrus is scattered along and south of the Yangtze River valley, altogether 19 provinces have seen commercial production in the areas mainly between 20 and 30 degrees north latitude and on the hilly land between 700 and 1000 m above sea level. Citrus is currently one of the major cash crops in southern China. It should be mentioned that the Chinese government built up a Yangtze Citrus Zone with the World Bank loan in Sichuan, Chongqing and Hubei in 1990s, which enormously furthered the development of Chinese citriculture.

At present, China produces about 10 million T of citrus annually, ranking 3^rd in the world. The output was 10.1 million T in 1997, 8.59 T in 1998, 10.79 T in 1999, and expected to be 20% less in 2000 owing to frost damage. Citrus production in China is based on small-scale household growing, there are few orchards covering more than 10,000 mu of acreage.

Citrus growing acreage remains around 1.2-1.3 million ha in recent years, namely, 1.309 million ha in 1997, 1.27 million ha in 1998, 1.283 million ha in 1999, and 1.3 million in 2000.

Citrus production in China has the following features:

In respect of varietal structure, before the 1990s, 2/3 of the citrus volume by variety was loose-skin mandarin, among them, most were satsuma and tangerine; sweet orange only had a share of 20% of the total, the rest were pomelo and kumquat, etc. In the past decade, loose-skin mandarin had fallen to about 55%, while sweet orange rose to 30%, pomelo to 10% after the varietal restructuring. As development of navel orange and pomelo is encouraged, the local navel can compete with any product of the same kind in the world in terms of both outer appearance and taste, and seedless pomelo is being spread quickly while early satsuma is entering the large-scale production phase.
Basically for climatic reasons, citrus fruits in China mature mostly from October to next January, during which, the peak season is from late October to December. Consequently, most of current citrus fruits appear on the market during the short period from October to March, and after that, only a small amount of non-perishable citrus fruits like Hu pomelo can be found on the market, which means undersupply exists in the citrus market in almost 6 months, suggesting much more efforts need to be put in expansion of the period for fruit maturity.
Respect to marketing, most citrus products sell within the country with only a small percentage for export. Export volume has long stagnated around 100,000 T, and began to rise in recent years to about 200,000 T of fresh fruits, accounting for only 2% of the total output. Among them, loose-skin mandarin occupies over 90% of the total export volume, and major destinations are Canada and Russia. As exports are increasing, imports are growing as well. Most of the imported citrus is sweet orange and its juice from the United States, Brazil, Australia, South Africa, Egypt, etc.
In respect of consumption, citrus production in China is mostly for fresh fruit consumption. Only 5% of the fruits are processed, mainly for canned segments of satsuma exported to Japan and North America. Although more than 20 processing lines have been introduced since the 1980s, the processing capacity has been much underutilized due to a package of reasons like variety, raw materials and cost, etc. The sweet orange juice on the market is produced by Chinese manufacturers by reconstituting or packing the concentrated or non-concentrated juice imported from Brazil and the United States.

In general, China has tremendously enhanced the total production of citrus through expanding acreage in the past decades. However, the citrus industry as a whole is still underdeveloped with lack of competitiveness. By comparison with the United States and Brazil, China's citrus industry is still somewhat backward in terms of quality and yield, and of processing in particular.

III. Great potential and bright future

In accordance with the current agricultural policy environment and citrus production capacity, China's citrus industry is to develop steadily in the future.

Despite the growing acreage of nearly 1.3 million ha, only 70% of the total acreage bears fruit, besides, some young trees haven't come to the peak stage yet. Therefore, average yield of citrus in China amounts to 7.8 T/ha, only ½ of the world average. The existing varietal structure and quality is not sufficient to satisfy the domestic and international market demand, implying a great potential in the development of China's citriculture. In the future, the Chinese government will make greater efforts in adjusting varietal/quality structure, and encourage growers to absorb the advanced knowledge and enhance yield and quality by taking full advantage of modern technology. In the coming years, the growing acreage of citrus is expected to retain the present level, and given no severe frost damage happens, the total output of citrus is expected to exceed 12 million tonnes within 5 years.

With regards to varietal structure, satsuma will continue to shrink its share, while high-quality navel, Ponkan orange, and other varieties with local flavour will increase and pomelo will maintain its current proportion. The consumption pattern dominated by fresh fruit will hardly change in 5 years, with sweet orange juice still relying on imports, but China will expedite the development of storage and processing of citrus to prolong the fresh-fruit supply and upgrade the processed products.

In the years to come, efforts will be made to heighten the overall standard of economic returns of China's citrus industry, based on the principle of "improving the variety and quality, establishing the trade reputation and brand and reducing cost". The citrus industry of China is anticipated to turn on a new look in the fields of quality, grading, packaging, and processing.