The city's biggest trader of fruit from Taiwan, Ggood, has quit the local market after suffering losses of more than 20 million yuan (US$2.93 million) over the past three years.
The company's distribution center in Minhang District has closed and Ggood is promising compensation for unfulfilled orders.
Lin Chih-hung, general manager of Ggood, which used to sell more than 80 percent of Taiwanese fruit in Shanghai, attributed the failure to the high cost of transporting the fruit between Taiwan and the mainland.
He said fruit had to be transported via a third place, such as Japan, to Shanghai because there was no direct route between the island and the mainland. As a result, transport costs were high and more fruit was spoiled due to the long passage.
This meant Taiwanese fruit was almost 10 times more expensive than the equivalent produced on the mainland, even more expensive than other imported fruit.
For example, a guava sold at 15 yuan, a mango was 50 yuan and a high-quality wax apple, regarded as the king of fruit by Taiwanese, cost 150 yuan.
"Locals were curious about Taiwan fruit at first and would buy some to try. But as time went on, few people could afford to buy such noble fruit often," said Yuan Yaxiang, an expert from the Shanghai Fruit Association. "Besides, locals didn't think some of the fruit was worth the price."
Ggood bought a large number of Taiwanese fruit in August 2005 after the central government imposed zero tariffs on Taiwanese produce. The favorable policy increased the volume of sales to 800 tons that year, almost triple that of the previous year.
But sales decreased quickly as prices rose over the following years, said Yuan.
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