Analysis of China’s Fruit Industry in 2019

Report

Since 2019, the price of fresh fruit has been rising. From May to June, the fruit prices in China peaked and some even renew the record of the past ten years.

Fruit Prices Will Decline in the Second Half of 2019
According to the National Bureau of Statistics (NBS), in July 2019, the price of fresh fruit rose by 39.1%, making CPI increase by about 0.63 percentage points.

Mr. Lin Guofa, CRO of BRIC Agricultural Products Sales Website, told the reporter that the sharp increase of fruit prices this year was mainly due to the low stock of fruits. Meanwhile, the yield in southern this year decreased and the on-season time of most fruits delayed, resulting in the tight supply and rapid rise of price in this period.

However, following the emerge of some seasonal fruits in early June, prices also decreased. By mid-August, the price of various fruits had fallen back to normal levels.

Imported Fruit is Getting Favored
While the domestic fruit prices are rising, China’s import of fruit in recent years has been growing rapidly year by year. Customs statistics show that in 2018, the total quantity and amount of imported fruits in China maintained a massive growth, of which the total quantity reached 5.527 million tons, a year-on-year increase of 25%; the total amount reached US$7.62 billion, a year-on-year increase of 36%.

In terms of imports, Vietnam is China’s largest source of fruit imports. In 2018, its total import volume was 1.34 million tons, up by 15.5% year on year. After Vietnam, the following largest sources are the Philippines, Thailand and Chile, the import quantum is 1.17 million tons, 1.02 million tons and 400,000 tons respectively, up 34.5%, 56.9% and 53.8% in several. From the perspective of category, the top five imported fresh fruits in China in 2018 are cherry, durian, banana, table grape and orange.

Guangxi Pingxiang Port is the largest import and export port for land transported fruit in China. In the first half of 2018, the import and export of fruit at the Port was 659,000 tons, of which 555,000 tons were imported, with a year-on-year increase of 21.4% and the value of 4 billion yuan,.

With the popularization of network e-commerce and the improvement of the logistics chain, durian, mangosteen and other once expensive fruits have become popular and got more acceptance in the country. This year, the value of imports up by 30% year on year. The imported fruit focused on the high-end market before, and now it is beginning to cover the both high-end and mid-market.

The Characteristics of China’s Imported Fruit
There are several major characteristics of China’s imported fruits:
First, the import volume of tropical fruits is soaring, mainly including banana, durian, rambutan, coconut, pineapple, lychee and longan. The major reason is that the tropical area of China is relatively small. There is not winter in southern Hainan while the lowest temperature of winter in the tropical regions such as Guangdong, Guangxi and southern Yunnan is close to 0 degrees Celsius, which affects the yield of some tropical fruits in winter and reduces the production. However, tropical fruit has a huge variety, great taste and being sought after by consumers. Since domestic production is not enough, imports are requisite.

Second, the types of imported high-end fruit increased. In addition to the main products such as cherry and avocado, the imports of high-end apple and kiwi also increased steadily, mainly because of the rapid increase in consumers’ demand for high-quality fruits.

Third, the differences in seasonal fruit in north and south hemisphere lead to the increase in imports, the main of which include kiwi, cherry, grape, apple, orange, citrus and so on. When China is in winter and spring, the southern hemisphere is in summer and autumn. Whenever at this time, the corresponding fruit supply is tight in the country so that import is needed for meeting the demand.

Another reason for the import growth is the escalation of consumption as well as the more stable quality of imported fruit. Most of the local fruits are grown by private investors with a low degree of standardization. In addition, as the import volume keeps increasing and the tax revenue decreases, the price of imported fruits is becoming more and more acceptable.

Also, the emergence of high-quality fresh produce e-commerce promoted the increase in fruit imports. According to statistics from FORWARD, the market transaction volume of China’s fresh produce e-commerce industry reached 210.32 billion yuan in 2018, an increase of 49.9% from 2017 (140.28 billion yuan).

 

Source: FORWARD