The price of Chinese apples is heading north as stocks in storage go the other way, as a strong domestic market takes care of remaining fruit.
Stocks remaining in storage are significantly less than 2008, and prices are significantly higher, Jack Gao of Chinese exporter Goodfarmer told Fruitnet.
“The FOB price is about US$1 per kg right now. That’s a very high price.”
The big turnaround for prices came in April as stored apple supplies began to run low, according to exporter Shaanxi Huasheng.
“A lot of people who stored apple stocks lost money last season, so this year people were reluctant to put apples in storage at the beginning of the season,” said a spokeswoman from the company.
“Because of the financial crisis, before this February the apple price was very low but still couldn’t move. However, after April the price went up sharply and this affected exports.”
“The present price is higher than that of the 2005/06 season, which had been considered the highest in recent years.”
The Chinese domestic market is strong this year, and for exports developing markets that take smaller-sized fruit are still turning over well.
Developed markets that have traditionally taken larger premium fruit are either trading down to lower grades of fruit, or are simply lowering orders.
“Because of the favourable domestic market, people prefer to sell their apples to the domestic market rather than exporting as they can get better earnings,” Roger Sun of Ever Fresh told Fruitnet.
The domestic market is so hungry for fruit, Hong Kong-based traders who have signed full-year supply contracts with supermarkets have had to pay deposits to hold stocks of apples in controlled atmosphere storage, according to Mr Sun.
South East Asia and the Middle East have been the standout export markets for Chinese apples this season, said Mr Gao.
The high price of Chinese apples has meant that in some Asian markets they actually cost more than US apples. The record size of the Washington crop pushed prices down globally, but sales have continued to lag.
US unsold stocks are currently 42 per cent higher than the same time last year.
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