In the past two years, watermelon prices have become increasingly unstable, which is reflected in the high price increase in spring and the rapid price decline from July to September, showing an unprecedented degree of polarization.
Shanxi Yurun Agricultural Development Co., Ltd. is a service provider specializing in the entire watermelon industry chain. Looking back at the market, Mr. Fan Zhiqiang from the company, said: "The polarization situation has become more serious this year. In March, due to the disconnection of the season in production areas, there was a shortage in the market. The price at the origin was once as high as ￥12/kg, which can be said to be the highest price in history, and it continues to run at a high level. With the development of the season, the price dropped sharply after July, with the lowest price falling to ￥1.2/kg, the lowest price in history. At the same time, many watermelons were not sold due to lack of demand."
In terms of the reasons, Fan analyzed: "The overall market for watermelons has been good in the three years since the pandemic, which has attracted all parties to continue to expand the planting area, especially in the northwest region. Many places in the northwest are suitable for growing watermelons. The market period is concentrated from July to September. Excessive supply makes the market congested and depressed. There was a time when the market selling price was lower than the cost and the sales were not going well. In terms of supply, due to the large supply, buyers only select the best quality melons, and no one cares about the inferior ones, leaving a large number of watermelons rotting in the fields." In addition, Fan added that many new watermelon growers have emerged this year, some have moved to the northwest region from other producing areas, and some were originally engaged in other industries. New growers lack customers and make sales more difficult.
"In addition to expanding planting, there have been ‘price wars’ with watermelons in recent years, especially this year. Because watermelons can be supplied throughout the year and are in high demand, and can be highly branded, several leading fresh food companies are making their market plans. And because the threshold for operating in the watermelon market is low, small fresh fruit agencies are also speculating. Their respective quality and packaging are developing, and it is difficult to highlight their advantages. The lack of differentiation leads to price wars."
In response to the above situation, Fan, in addition to continuing to develop planting, has also developed the entire watermelon industry chain at the Shanxi Yuncheng base in recent years. Services on the origin side include assisting growers to solve financial problems, providing technical support, and expanding sales channels; on the client side, the company is positioned as a watermelon industry service provider, focusing on providing services to chain stores and supermarkets, such as organizing sales teams to go to stores to help increase sales. Improve customer stickiness and expand more channels with services.
Talking about the latest market situation, Fan said that it is currently the Yunnan watermelon production season. When it was launched in mid-September, the market was not good. By late September, the market rose a week before the Mid-Autumn Festival. On October 1-2, the price rose to ￥5/kg, three times higher than when it was first launched. "Although the demand is reduced supply is less, the market should not decline subsequently."
Looking forward to the trend, Fan said: "Because of its good taste, Meidu watermelon is expected to become the mainstream in the next 3-5 years or even longer; the market demand for small watermelons of 1.5-2.5 kilograms is rising and will become a trend; Ganmei watermelons are still available in quantity, but mainly in Guangdong, with average sales in other regions. In addition, some niche watermelons, such as yellow flesh melons, are suitable for development in small areas and focus on differentiation, but they may not be suitable for large-scale planting. The market still values taste."
Yurun Agriculture has its own 200-hectare base and technical team in Shanxi, developing the entire watermelon industry chain locally. Other production areas are mainly trading, and the brand name is "Yulin Watermelon".
