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By DANIEL TAUB and JASON BOOTH Staff Reporters After months of being battered by Mother Nature, two Los Angeles fruit-growing concerns are finally getting some good news in both cases from overseas. Sherman Oaks-based Sunkist Growers Inc. could likely benefit from China’s recent decision to open citrus imports from the United States. And Westlake Village-based Dole Foods Inc. may get a boost from a World Trade Organization ruling that the European Union is unfairly restricting banana imports from the United States. China’s move to allow California citrus growers as well as growers from throughout the United States to export oranges, lemons and other citrus fruits is expected to have the most immediate impact. The agreement came last month even as President Clinton and Chinese Premier Zhu Rongji reached an impasse on China joining the WTO. The news was especially good for Sunkist, a marketing cooperative that represents about 6,500 citrus growers in California and Arizona. Nearly a third of Sunkist’s $913 million in fresh-fruit revenues for the year ended Oct. 31, 1998 came from overseas and more than $270 million of that was from Hong Kong, Japan and other parts of Asia. Sunkist does not expect to start exporting fruit to China until the next navel orange harvesting season begins in October or November. One reason for the delay is that citrus supplies are limited this year following last December’s freeze in the San Joaquin Valley. The freeze is believed to have destroyed up to 40 percent of Sunkist’s latest crop. Sunkist, which has not exported directly to China since the 1930s, already has some name recognition in the world’s most populous country, according to spokesman Bill Quarles. “It’s surprising that there are people who do recognize the Sunkist brand from before World War II,” he said. “And in southern China, they get TV reception from Hong Kong and recognize a lot of the Sunkist advertising from that standpoint.” Furthermore, he said, there are a few Sunkist-branded juices and other processed products that are made by Hong Kong-based companies and legally sold in China. That, too, helps Sunkist’s name recognition in China, he said. The United States exported about $100 million in fresh citrus to Hong Kong last year, and Quarles said that within five years, the market in China and Hong Kong combined is expected to reach $200 million. Growers are also optimistic about the potential in China. “Lemons are a relatively finite supply. The supply and demand is relatively inelastic, which means that to broaden the lemon distribution base, we need to expand our markets,” said Bob Pinkerton, who manages his family’s lemon farm in Ventura County and sells under the Sunkist name. “Opening up China gives us a much broader base for marketing.” Dole, meanwhile, isn’t expected to reap the benefits of the banana decision quite so quickly. On April 6, the WTO ruled that the European Union has unfairly restricted imports of bananas produced by U.S. companies, and that the United States, in retaliation, could impose annual sanctions on E.U. products. But that doesn’t bring an immediate end to Europe’s import restrictions. Analysts point out that the WTO was forced to act because the U.S. and Europe have not been able to reach a compromise on their own. So instead of dialogue between the two sides, which might have led to an agreement, battle lines have been drawn in a trade conflict that could drag on for years. Still, considering the other woes that have beset Dole throughout 1998, it was a refreshing turn of events. “It’s the first good news the company has had in a long time,” said George Dahlman, an analyst at Piper Jaffray. Unusually wet weather brought on by El Ni & #324;o caused an overproduction of bananas in the first half of the year, thus lowering prices. Then Russia’s economic crisis effectively shut down a market that accounted for 8 percent of world banana imports, further dampening banana prices. Toward the end of the year, Dole’s crops in Latin America were damaged heavily by Hurricane Mitch. Investor optimism over the WTO ruling was compounded by word that Dole Chairman David Murdock has been buying Dole shares. Between March 9 and April 6, he purchased $43.7 million worth of stock on the open market. Dole also announced that earnings from continuing operations in the first quarter of the year were up 40 percent from a year ago. Inspired by the string of positive news, investors drove the stock up 20 percent in the first two weeks of April. But the rally didn’t last long. Since the stock peaked on April 22, it has lost almost 10 percent of its value. Dole officials did not return calls for comment. Analysts stress that while Murdock is acting bullish, he is a long-term investor, so his buys do not necessarily indicate that the stock will rally any time soon. “People were impressed by Murdock’s big purchase,” said Nomi Ghez, an analyst at Goldman Sachs, which recently downgraded its estimates for Dole. “He obviously sees value in the long term, and so do we, but in the short term we think demand for bananas will be flat.”

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