Very interesting research from Ashentegra and Luklee. I find...

Very interesting research from Ashentegra and Luklee. I find that there is so much happening lately in relation to this company and the industry it operates in, that it is quite difficult to keep on top of all the issues.

It remains to be seen how all these developments pan out, but it does feel a little like we could be at a turning point.

On the China front, one story that has been swiftly developing over the past 24 hours is the response by that country to the Trump tariffs, with China's Ministry of Commerce yesterday publishing a statement on its website with a list of 128 US products on which it was proposing to levy retaliatory tariffs.

It would appear that the Chinese have the US fruit and nut industry in their sights, with the majority of the 128 items being horticultural produce. Almonds feature prominently on the list, with numbers 8 and 9 being 'unshelled almonds' and 'shelled almonds', respectively. Apparently, all the produce from the US that feature on the list could be whacked with an additional 15% tariff.

This news report from Reuters overnight provides an interesting overview on the subject:

SHANGHAI, March 23 (Reuters) - As Beijing and Washington exchange barbs that threaten a potential trade war, health-conscious Chinese shoppers are beginning to fret over what this could mean for their pockets: a potential jump in prices for U.S.-grown cherries and pistachios.

Close to 80 fruit and nut products from the United States are at risk, after China declared plans to levy additional duties on up to $3 billion of U.S. imports in retaliation against U.S. President Donald Trump’s plans to slap tariffs on up to $60 billion in Chinese goods.

U.S. exports of fruits, frozen juices and nuts to China amounted to $669 million last year, and it was the top supplier of apples, cherries, walnuts and almonds, with much of the produce coming from growers in California, Florida and Michigan.

The article also mentions the online shopping portal referred to previously by Lukelee. According to the report, many Chinese have also mooted Australia as a potential alternative source of supply for many of the agri products targeted by the tariffs:

...Chinese imports of fresh fruit and nuts have surged in recent years thanks to the country’s rapidly growing middle class, which has given rise to a new generation of consumers willing to splurge on healthy food.

In a demonstration of their buying power, Chinese shopping portal JD.com sold 57 million cherries to Chinese consumers in one day during a shopping event in June last year.

These fruits and nuts are part of a list of 128 U.S. products that could be hit with tariffs if the two countries fail to agree on trade issues, China’s Ministry of Commerce said.

The two countries have, however, said they are in talks. The Trump administration says it wants to impose the tariffs in response to China’s “economic aggression”.

Still, not all Chinese consumers viewed negatively the potential higher duties on U.S. fruit and nuts. Some said they could find alternatives from Australia and Europe, with at least one saying the tariffs could be good for China’s own growers.
“These products all have domestic equivalents,” said the commentator on Weibo. “This could lift demand!”

It does sound like Select might have got the timing right with their push into China, though keep in mind it remains to be seen if China goes ahead with the proposed tariffs.