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Apple reserve in refrigerated warehouses is still quite large

Supply of Chinese apples from Yantai is slower than in recent years

In recent years, the supply of apples from Yantai quickened its pace around New Year, but this season the overall apple market has been slow. The average sales volume and average sales speed have both been lower than in recent years. There is still a large volume of apples in reserve in refrigerated warehouses. Manager Li, an apple farmer and trader from Yantai, recently talked about the current conditions in the Yantai apple market.

Apple orchards in Yantai enjoyed an abundant harvest in 2019. The overall apple production volume in Yantai increased by 30% in comparison with 2018. The market supply of apples exceeded demand this year and the overall price dropped.

"The current purchase price of premium apples from orchards in Penglai, Yantai, is around 3 yuan [0.43 USD] per 0.5 kg. The purchase price of premium apples from Xixia, Yantai, is around 2 yuan [0.29 USD] per 0.5 kg. Looking at the overall market, the development is obvious. Purchase prices and market prices are significantly lower than last year. However, the low prices did not increase the supply speed. On the contrary, apple sales around New Year slowed down. There are many apples, already packaged, that could not be sold on schedule," said manager Li.

"The market is depressed, which means that fruit traders who do not see an optimistic future tend to prioritize their own fruit, while at the same they stop buying fruit from apple farmers. The farmers who have a limited number of retail channels often end up with large volumes of unmarketable apples in storage. We expect the market conditions to slightly improve around Chinese Spring Festival [25 January, 2020]. However, after Spring Festival the apple price is likely to drop again to 2 yuan [0.29 USD] per 0.5 kg, or even 1.5 yuan [0.22 USD] per 0.5 kg."

Manager Li mainly produces ecological apples and predominantly sells them in gift boxes. "The apple production volume in an ecological orchard is relatively small. Most of our clients have been with us for a long time. Market changes therefore have a limited effect on our operation. The market price of our 80# apple gift boxes (10 apples) is relatively stable at 98 yuan [14.11 USD] per box, while the price of the 90# apple gift box [12 apples] is 168 yuan [24.19 USD] per box. We organize a wave of activities prior to Spring Festival. Around that time our prices will be slightly lower," explained manager Li.

When asked about the seasons for ecological apple production and retail, manager Li replied, "many apple orchards in Yantai have been renewing their apple trees in the last two years. Cutting down the old trees and planting new trees takes time, but we predict that the first season our new trees bear fruit the production volume per hectare will grow and the product quality will improve. As for the market, Chinese consumers have great consumption power, but the ecological apple industry faces several problems, including unstable product value and farmers who do not understand how the market operates. We are therefore talking with other apple growers to set up an association that can safeguard industry standards and improve product quality. The association will also help individual farmers to open up new markets. We hope to establish a strong brand for the ecological apple alliance.

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