The market will have difficulty achieving recovery
China: Apple supply exceeds demand
China is a big player in both the production and consumption of apples but, as a result of a continuous growth in apple production, supply is currently exceeding demand. The estimated production volume in 2017 was 43.5 million tons. 86% of those apples were destined for the domestic fresh food market. Around 10% went to processing factories, and around 3% was exported.
Most apple consumption is domestic. It is a seasonal product that sells throughout the year. After the apples are harvested in October, they are gathered and stored in refrigerated warehouses. From there they are sold throughout the year. In the beginning of February this year, visiting traders began to leave prematurely. Warehouses stopped packaging, and supply became noticeably smaller. The volume in warehouses and the volume on the road are both smaller on average than they were in the same period in the previous year. As far as current conditions are concerned, the weather is clearly turning warmer and soon seasonal products such as pineapples and strawberries will enter the market. The consumption of apples will possibly decrease even further.
Apple exports are still negligible, with the latest export figures showing that the Chinese apple export volume in January 2018 was 110.2 thousand tons. This is a decrease of 36.66% compared to the previous month and a decrease of 31.13% compared to the same period in the previous year. The trade value was 121.4 million USD, which is a decrease of 36.31% compared to the previous month and a decrease of 19.61% compared to the same period in the previous year.
The overall apple consumption this year is clearly weaker than in previous years. Warehouses empty slowly and the pressure on remaining stock is high. This is particularly true for warehouses in Shaanxi. With the additional pressure of great supply and with Spring Festival over, apple farmers vigorously sell at even lower prices. The price has already entered a downward trend. The prices of high-quality fruit are more comfortable, but they too show a similar trend.
Publication date: 3/6/2018
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