The apple market has caused apple farmers headaches in the last two or three years. And the market is even more chaotic this year: high apple prices, high labor costs, high packaging costs, poor quality inspection, excessive investment, poor returns, and large losses.... how did the market end up like this?
Market analysis:
1. Surface area too large, production volume too big
Almost every farmer north of the Yellow River cultivates some apple trees. They used to have orchards of less than a hectare, but now every farmer has an orchard of tens or even hundreds of hectares. The apple production volume has increased without limit.
2. The apple import volume continues to increase, crowding the market.
3. The market share of apples shrinks as other foodstuffs become cheaper and the supply volume of other fruits grows.
4. The sales volume of top-quality apples decreases. Apples from Xixia County, Shandong, used to be popular as high-end individual gifts, but in the midst of anti-corruption campaigns these gifts have almost disappeared.
5. Apple production areas construct refrigerated warehouses on a large scale, thus turning farmers into traders with warehouses in direct competition with other apple traders.
6. Costs increased. Apple boxes were around 10 yuan [1.44 USD] earlier this year, and that price increased to 13 yuan [1.87 USD]. Other expenses related to packaging and storage add another 0.8 yuan [0.11 USD] per 0.5 kg.
7. Currency devaluation also influences the apple price.
Source: Fruit Service Center