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Serious Apple Reduction of Output Stimulated Continuous Price Increas, but the Rising Space to Be Gradually Compressed

China Agriculture Report By CnAgri2018-10-10 15:38:25China Agriculture Report Print
In early April, a cold spell struck most parts of China. Affected by the frost, the main apple producing areas were affected to varying degrees. Six major apple producing areas including Shaanxi, Shandong, Henan, Shanxi, Hebei and Gansu were struck by a severe freezing disaster. The apple production of these six provinces is more than 80% of that of the whole country. The multiple effects from the freezing disaster and diseases led to varying degrees of 10% to 50% reduction of output in the main producing areas. It was found to be the worst in recent 10 years. Therefore, it is estimated that apple production will be reduced by 25% to 30% to 30 million to 32 million tons in 2018/19.
Due to the reduction of output, the purchasing price of apples in the main producing areas has generally risen by 1.5RMB/kg to 2 RMB/kg compared with last year, and the purchasing price of Fuji apples in some producing areas has reached 10 RMB/kg. Farmers were more unwilling to sell and refused to drop prices, which led to intense competition among traders in purchasing and the purchasing prices continued to rise. We believe that despite the obvious reduction of output, the rising space of the sharp apple price increase will also gradually shrink.
a. In recent years, an oversupply state is found in China's apple supply, and the consumption growth is slow. Apples are a product of centralized purchasing and long-term sales. Whether the terminal retail price can keep rising also makes the market parties, especially the purchasers concerned. The excessive rise of the purchasing price will cause the purchasers’ ‘wait-and-see’ attitude which will restrict the price increase.
As apples are not a daily necessity and the current fruit varieties have been abundant, plus alternatives are plenty, if the price increase is too much, it will inevitably affect the consumption.
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