After a slump in 2016 the apple market is showing signs of a recovery. Since late February, prices have been rising by 0.4 to 0.8 yuan per kilo, an increase of 10% compared to earlier prices. The reason seem to be shortages of supply caused by such stocks as there are being snapped up by exporters. Farmers and merchants in the production areas appeared reluctant to sell them low, thus driving the prices higher and higher. So far the increase in prices remains a speculation within the production areas. Thus the actual prices in the market haven't been greatly affected.
Despite the recent rise in prices, the market outlook for Fuji apples is still uncertain. The good news is that the total amount of stock this year is 10% to 20% lower than the same period last year. The inventory in some cold storage plants in Shaanxi has even been cleared. The low inventory will help keep the prices of the apples from falling. However, the uncertainty of demand and low acceptance of high prices from the consumer side have both restricted the prices from rising greatly. If the prices of apples are too high due to speculation, dealers will be reluctant to sell while consumers are reluctant to buy. Furthermore, the current level of inventory can be risky because the market demand will not be optimistic if the majority of the apples still remain in the warehouses by 1st, May.
Source: Shanxi Farmers (Taiyuan)
