Fruit prices to stabilize or fall as supplies grow

Source:Global Times Published: 2019/5/26 22:00:47

Surging fruit prices have become a hot issue in China, but analysts said the situation just reflects seasonal factors and prices will stabilize or even drop as supplies improve.

Fruit prices went up 11.9 percent year-on-year in April, contributing to the 2.5 percent year-on-year rise in the consumer price index (CPI), according to data released by the National Bureau of Statistics (NBS) on May 15.

The biggest gains were in East China's Anhui Province, with 30.9 percent, and Northwest China's Ningxia Hui Autonomous Region with 20.4 percent, jiemian.com reported.

On May 20, the average wholesale price of fruit monitored by the Ministry of Agriculture and Rural Affairs (MOA) stood at 7.78 yuan ($1.13) per kilogram, the highest since June 2014.

"Fruit prices have all been soaring, except for bananas," said a white-collar worker surnamed Zhang in Beijing.

China imported $897 million worth of bananas in 2018, about three times the level of 2012, the Xinhua News Agency reported. A ship carrying 100 tons of Cambodian bananas arrived in Shanghai on Friday, marking the start of China's banana imports from Cambodia.

Three listed fruit-sector companies in China have seen their shares soar. For example, Greatsun Foods increased 81.66 percent within 15 trading days in April.

"We also see speculation in agricultural futures, which the government should get under control," Ma Wenfeng, an agriculture analyst, told the Global Times on Sunday.

The price rises are a short-term phenomenon, since output largely reflects seasonal factors, Li Guoxiang, an expert at the Chinese Academy of Agricultural Sciences, told the Global Times on Sunday. Extreme weather last year has reduced supplies this year, Li said.

The costs of inputs, land, labor and logistics also affect the prices of agricultural products, Ma said. "The increase of rainfall in southern China has partly increased costs of transportation and storage."

The price of Fuji apples stood at 10.33 yuan per kilogram from May 13-17, up 60.7 percent from the same period last year, according to the information center of the MOA.

In 2018, apple trees blossomed earlier than usual and cold waves affected swaths of Northwest China in April, with lots of rain, snow, frost and cool weather, so there's been a sharp reduction of domestic apple supplies. 

According to NBS data, as of December 13, 2018, the national stock of apples was 6.05 million tons, down 966 tons compared with 2017.

"Rising fruit prices will prompt farmers to strengthen management and take pre-emptive measures to increase supply," Li added.

As fruit crops mature, supplies will increase after June, including watermelons, grapes, peaches and mangoes. Because of the strong substitution among fruits, large supplies are expected, said Ma.

"Due to the increase in supply, we believe that the overall price trend for fruit will be stable or even ses a seasonal decline," said Li.



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