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Can the price of oranges warm up before Chinese Spring Festival?

The month leading up to Spring Festival is the period when oranges enter the market in large volumes, but it is also the period when many products become more expensive. Will the price of oranges warm up before Spring Festival?

The production volume of oranges in Guangxi hit a record high this year. In addition to Guangxi, the surface area devoted to orange plantation in Sichuan, Guangdong, and Yunnan is not small either. The large volumes of oranges enter the market around the same time, which means that buyers have abundant choice and can afford to be selective. This puts pressure on the price of oranges. Furthermore, quite a few households have their own orange trees and the oranges can not be kept for very long. Farmers have no choice but to lower the price in order to sell their oranges.

The temperature in south China has recently been quite cool. The rainy, overcast weather created difficulties for orange storage. The moist weather affected product quality. Taken into consideration that the overall production volume increased, the market in south China simply was unable to absorb the entire orange harvest. The only solution was transport to north China, but transport adds to the cost price. This means that the retail price of oranges in north China went up as well.

The color and flavor of oranges also diminishes as a result of transport from the south to the north of China. Oranges that were harvested when they were ripe had started to rot by the time they arrived in north China. Farmers therefore harvested unripe oranges, which consumers of course did not appreciate either.

This analysis may suggest that a price increase is unlikely for oranges, but the Spring Festival is fast approaching and many people will buy gift boxes of oranges for friends and relations. This stimulus  may lead to a slight price increase. However, the rise will be limited by excessive supply and transport costs.

Source: lenongdao.com


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