The Covid-19 pandemic weakens consumer power, which affects consumer demand for apples. In addition, apples are easily replaced with other seasonal fruits, and demand for the latter further weakens the competitive market position of apples. These developments put a lot of pressure on the Chinese apple industry. Furthermore, the amount of apples entered into storage in 2019/20 was higher than in 2017/18. That puts additional pressure on the apple industry. The price of Chinese apples is low, and has been low for the last five years, which makes it difficult for apple farmers to earn a living.
The first apples of the new production season entered the Chinese market in small volumes in early June. Fresh Fuji apples and apples from storage supplied the market at the same time, which put more pressure on the price of apples, especially on the price of last season's apples as they are running out of retail time.
Price trends in major apple production areas
The price of apples has dropped to a low point, which stimulates the market and relieves some of the pressure on apple warehouses as they reach the final stage of the retail period. However, there are many other kinds of fruit that compete with apples, and fresh apples have not yet entered the market in large volumes. The market conditions of apples are therefore not likely to improve in the short term. There is still some pressure on last season's apples to clear storage. And only low prices can effectively clear the warehouses at the end of the season. The price of last season's apples will likely fluctuate but remain low, and this also weakens the price of the early season apples that just entered the market in small volumes.
Weather conditions were exceptional this year. The growth of many apples was disturbed by extreme weather conditions. During the blossom season in April many apple production areas experienced a sudden drop in temperatures, twice. These cold currents took place between the 8th and 12th of April, and between the 21st and 24th of April.
Although extreme weather conditions were frequent, they were also scattered. In May apple production areas across China enjoyed excellent weather conditions. The apples developed at a normal pace. Early estimates predict that the apple production volume in 2021 will be 15% smaller than in 2020. However, the production volume in 2019/20 was rather large, so that a 15% decline is within normal margins.
