2020 was a very bumpy year for apples. Whether in the spot market or the futures market, prices fluctuated violently. At the beginning of the year, frost led prices to climb all the way from the bottom, only to be followed by news that production wasn’t as low, as expected. This has led to purchase prices plummeting. Recently, with the new crop becoming available in large volumes, traders are in a rush to buy. Has the purchase price really touched the bottom and begun to rise?
New crops becoming available; stock volumes at very high level
Generally speaking, apples flood onto the market around October of each year, and the activities of putting the crop into storage come to an end in November. However, according to statistics from major industry platforms, this year, instead of falling as expected, the stock volume has risen compared to previous years, even hitting a five-year high.
With most of the new crop already put into storage, distribution in the wholesale market is slowing. Because of this, most of the apples being dealt during the period between November and the Spring Festival are of poor quality. Pricing in the entire market has become extremely chaotic - poor-quality products can cost as little as one yuan, while growers in the west are receiving more than four yuan for average-quality products, and the products are marketed for more than five yuan in the wholesale markets.
Fierce competition from citrus
In the coming weeks, the stock of apples will be more than sufficient, and costs will gradually stabilise. In winter and spring, apples face competition with other seasonal fruits. Varietal and regional competition within the category is also fierce.
It is understood that the production of citrus this year has exploded, increasing by about 20%. The purchase price of mandarins in Hubei is under one yuan, which is less than half of the price of last year. Therefore, the low prices of alternative fruits are likely to further lower the apple market.
Source: Apple Growing