China: Shaky year for honey pomelos, good domestic prices for pears
"Due to the very low price many farmers didn't pick the pomelos from the trees, this will cause less fruiting this season. Another reason is the climate this year: rainy weather is continuing in the production area, when the fruit start growing it was always raining heavily, which caused a lot of fruit to fall," said Vivien Li of HengFeng Fresh in China.
"Prices for pomelos slid to historic lows last year," continues Li. The reason for such low prices was the glut of fruit which surged onto the market and resulted in depressed prices. Li added that although the government has taken steps to ensure the same thing doesn't occur this year, many of the aftershocks of last year's situation have run onto this season.
With pomelos going for 20 percent of their normal price at end of last season, it just didn't make economic sense for growers to pick fruit which would cost more to harvest than they would recoup in sales. The result was less fruit this year.
Contributing to the problem was rainy weather in several key production areas. Because heavy rains damaged part of the crop and because growers were reluctant to pick the fruit which was there, Li estimated that the 2012 crop will be about 20 percent lighter than usual. "It is hard to estimate what the prices will do, we estimate in the beginning the price will be high and when more product comes on to the market the price will come down." But also domestic consumption which accounts for 60% of total production will have an important effect on the price.
Pear growers, who began harvesting in June, are well into the season and are reporting normal volumes. Because there's been a steady supply, prices have not been erratic and there has also been a steady supply for the export market.
"We ship our pears to Southeast Asia, Russia, Europe and the Middle East, though we usually get better prices domestically than on the export market," said Li. But with good supplies this year, there have been enough pears to ship out of the country.
Current varieties available from Heng Feng Fresh are Su, Green Diamond, Crown, Golden, Fengshui, Yuanhuang, Crystal, Shandong, Ya, Red Fragrant, Singo and Gong varieties.
But steady supplies are not always enough to ensure good export volumes, noted Li. Garlic, for example, has had a stable production year. Adding to that stability is the fact that the commodity can easily be held in storage to make up for unexpected spikes or gaps in production. But despite those steadying forces, supplies of garlic for export have been erratic due to domestic demand keeping product at home.
"Because the price for garlic at home has been sky-high, export volume has been reduced this year by half," said Li. "The price is always fluctuating, and that's not good for our export companies."
So while having a steady supply of produce can help ensure there will be enough volume for export, a domestic market with increasing spending power can complicate things. As Li pointed out, because of the current situation, selling domestically is currently preferred.
"People's living conditions here have improved in recent years, so domestic prices, especially for pears, have been better than export prices."
For more information:
Vievien Li
Hengfeng Fresh Produce Co., Ltd
Tel: +86 530 8275988
Fax: +86 530 8191288
Mobile: +86 182 540 55579
[email protected]
www.hengfengfresh.com