India tariffs threaten California almond industry

In this June 23, 2019 photo, Californian almond kernels and other dry fruit are stored in a plastic bag for sale at a shop in New Delhi, India. California almond farmers are facing long-term uncertainty in the wake of new tariffs on exports to India, the state's top market for almonds. (AP Photo/Altaf Qadri)
Updated 28 June 2019

India tariffs threaten California almond industry

MODESTO, California: Along large swaths of California’s lush central valley, almonds in the fuzzy hulls of tree leaves blow in the wind on thousands of acres of orchards. Thousands of miles away in India, customers browse the nut sections of busy street markets and grocery stores in search of the best almonds to use in curry dishes, health drinks, ice cream and many other recipes.
Now the future of that market is uncertain. India this month imposed tariffs on almonds and 27 other American products, including apples and walnuts, in retaliation for the US ending India’s preferential trade status. Those tariffs took effect June 16 and come on top of a significant tariffs China placed on almonds last year.
“We can deal with market disruption in one country, but to have it in multiple countries is a real challenge,” said David Phippen, a partner of Travaille & Phippen, Inc., a farm and processing company in Manteca.
California supplies 82% of the world’s almonds and has almost 7,000 growers. The Almond Board of California estimates the industry generates about 104,000 jobs in California, and the effect of the tariffs might ripple outward. India is such an important market that the almond board, whose members engage in market research and promotion overseas, has an office in New Delhi with a $6 million annual advertising budget.

Blossoms cover an almond orchard near Firebaugh, California. (AP Photo/Rich Pedroncelli, File)

The tariffs add about 12 cents per pound to shelled almonds, a 20 percent increase, and about 4 cents for those still in their shells, a rise of 17%.
“That doesn’t sound like a large number, but India was an important alternative to exports that would’ve gone into China,” said Julie Adams, president of the Almond Board of California. “It’s difficult to know what the long-term effect of (the tariffs) will be.”
The hit from China tariffs was much harder: the country imposed 50% tariffs on US almonds in an escalating trade dispute. Exports to China decreased by about a third, according to the almond board.
Bhupesh Gupta, a grocery store owner in New Delhi, believes higher prices will cut into sales. While India is one of the world’s largest consumer markets, it also has huge income disparities and hundreds of millions live in poverty. Even a small increase in the cost could have a large ripple effect on what people buy.
Still, other sellers say that Indians are so passionate about almonds that they will figure out a way to deal with price hikes.
“It won’t matter, as anyone who needs almonds will buy no matter what the price,” said Delhi grocer Virender Kaneja.
For California farmers, most immediately the tariffs mean planning difficulties as the harvest season approaches. For example, some may need to take on more of the shipping costs to make up for the increased prices, which will be negotiated in the contracts. The handlers then may absorb the increased costs themselves or pass them onto the growers.

The sun peaks past almonds growing on the branches of an almond tree at the Wenger Ranch in Modesto, California. (AP Photo/Rich Pedroncelli, File)

To cope, growers may cut down on spending on equipment and fertilizer, perhaps making the choice to forego replacing a tractor. If the Indian tariffs slow the flow of inventory, as happened after the Chinese tariffs, the capacity of storage facilities may be stretched.
“From a grower perspective, we’re along for the ride,” said Jake Wenger, whose family has grown almonds on Wenger Ranch in Modesto, about 90 miles (150 kilometers) east of San Francisco, for four generations.
US Secretary of State Mike Pompeo is in India this week, meeting with officials amid growing tensions between the two countries over trade and tariffs. The trip is focused on Iran, but a California congressman has asked Pompeo to raise the almond tariff issue.
Some growers worry that if California almonds get too expensive, buyers will look elsewhere.
“They can buy other nuts or seeds, or if they’re preparing a nut mix, they can lower the amount of almonds in that mix,” said Phippen.
Countries may also turn to other producers, such as Australia, whose free trade agreement with China allowed the country to supply almonds in the wake of its tariffs on US almonds.
Ultimately, the almond industry will need to make inroads in other markets, which is no small task.

A nearly ready-to-harvest almond is seen in an orchard in Newman, California. (AP Photo/Rich Pedroncelli, File)

“It takes so long for us to build relationships to market our products,” said Sara Neagu-Reed, associate director of the California Farm Bureau Federation’s federal policy division.
Still, no one is panicking, yet. California’s export of almonds to India is valued at about $650 million, according to the US Agriculture Department and California Department of Food and Agriculture, but the state tallied $4.5 billion in foreign sales in 2017. The USDA valued US almond exports to China and Hong Kong at about $549 million in 2017-2018
In just over a month, the fruit will be harvested from farms and trucked to hulling businesses, where the nut will be separated from the shell and hull.
“It’s pretty amazing and gives you pride as a grower when you think about something that’s making its way all over the world,” Wegner said.
In recent years, drought has been the biggest challenge for almond growers, and farmers noted that they have become accustomed to market fluctuations and cite the strong, worldwide demand for almonds as reason for optimism.
The almonds at Wenger Ranch are part of this year’s record-high crop of 2.5 billion pounds (1.1 billion kilograms), up from about 2.3 billion pounds last year. Most of those almonds are already committed into contracts, so Wenger isn’t worried for now. It’s the future that’s in the air.
“We can’t do this every year,” he said. “Long term, there has to be a solution to settle this.”

Japan’s Uniqlo pulls ad after South Korean fury

Updated 21 October 2019

Japan’s Uniqlo pulls ad after South Korean fury

  • South Korean and Japanese relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism
  • Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes
SEOUL: Japanese retail giant Uniqlo has pulled a commercial featuring a 98-year-old US fashion figure from South Korean screens, it said Monday after it was accused of whitewashing colonial history.
South Korea and Japan are both US allies, democracies and market economies faced with an overbearing China and nuclear-armed North Korea, but their relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism.
The latest example is an advert for Uniqlo fleeces showing elderly fashion celebrity Iris Apfel chatting with designer Kheris Rogers, 85 years her junior.
The last line has the white-haired Apfel, asked how she used to dress as a teenager, innocuously responding: “Oh my God. I can’t remember that far back.”
But Uniqlo’s Korean arm subtitled its version of the ad slightly differently, reading: “I can’t remember things that happened more than 80 years ago.”
That would put the moment as 1939, toward the end of Japan’s brutal colonial rule over the Korean peninsula, where the period is still bitterly resented, and some South Koreans reacted furiously.
“A nation that forgets history has no future. We can’t forget what happened 80 years ago that Uniqlo made fun of,” commented one Internet user on Naver, the country’s largest portal.
The phrase “Uniqlo, comfort women,” in reference to women forced to become sex slaves to Japanese troops during the Second World War, was among the most searched terms on Naver at the weekend, and demonstrators protested outside Uniqlo shops on Monday.
Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes, and South Korean consumers have mounted boycotts of Japanese products.
Uniqlo — which has 186 stores in South Korea — has itself been one of the highest-profile targets, while Japanese carmakers’ sales dropped nearly 60 percent year-on-year in September.
The company denied the allegations in a statement, saying the text was altered to highlight the age gap between the individuals and show that its fleeces were for people “across generations.”
“The ad had no intention whatsoever to imply anything” about colonial rule, a Uniqlo representative said on Monday, adding the firm had withdrawn the ad in an effort at damage control.
Analysts said the controversy demonstrated the politicization of the neighbors’ complex history.
The reaction was excessive, said Kim Sung-han, a former foreign affairs vice minister who teaches at Korea University, involving a “jump in logic” that “assumes everything Uniqlo does is political as a Japanese company.”
“I don’t see how her remark could be linked to the comfort women issue,” he added. “This is overly sensitive.”