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China: What causes the apple market to change?

2018 China Apple: What causes the apple market to change?

The price of fruit in south China is low, supply volume sufficient, and many fruit varieties enter the market at the same time as apples. This creates market difficulties for Fuji apples in this area. This year's apple production decreased as a result of frost, which in turn led to high prices for Fuji apples in the autumn purchase season. Furthermore, many farmers decided to store their harvest. Still, the market trend is changing. As seasonal fruit enters the market this year, the price of apples in storage is falling. The additional cost of storage in the first half of this year means that many fruit farmers earned less per kg than they did last year.

Apart from this, the apple juice market also cooled down in recent years. Many apple processing companies work on the basis of pre-orders. The price of raw material increased, but many companies are unable to increase production capacity.

Why is the apple sales volume this small? Why is apple trade this slow? There are 5 main reasons:

1. The average purchase price of apples increased by 20% this year. The price of cardboard boxes increased by close to 30%. The cost price increased, which means that the retail price followed, and when the price is high, the sales volume is smaller.

2. Product quality deteriorated. The proportion of top-quality apples fell by 20%. The larger sales volume of medium-quality apples suffered from apple rust, lackluster color, spots, and wrinkles. This naturally influences sales.

3. The supply of domestic and imported fruits to the market is rich and varied, and the supply volume is large. Apples used to be a cornerstone of the fruit market in recent years, but they now receive fierce competition from bananas, citrus fruit, pears, and grapes. Some of these fruits are even cheaper, and the future of apples does not look promising.

4. Apple export suffered from increased prices. Add to this the continued halt of apple export from China to India and unreasonable fees on apple export to Indonesia, and the future of apple export is far from ideal either.

5. The industry improves and local governments rearrange management of large and medium-sized cities. Many farmers return to the countryside and the apple market is left in depression.

People in the industry say that apples are still mainly a fresh snack. The volume of processed apple products such as apple juice is still small. There is much potential in the development of apple processing companies, and this may be the answer to increased consumption of Fuji apples.