Fall in China apple supply spikes global apple juice prices

China's apple effect
Today Online 24 Jan 08;
Producing half the world's apples, China's reduced yield looks set to spike prices

BEIJING — The price of apple juice in British supermarkets is set to rise this year due to bad weather in China, in another sign the country's growing influence is affecting the world in unexpected ways.

China sells as many apples as the rest of the world put together. But a late frost last year and cold, wet weather has reduced the crop by 10 per cent, and helped to increase the price of international supplies of apple juice concentrate, for which much of the fruit is destined. The other main reason is a late frost in Poland, another large supplier.

"Raw material prices have more than doubled as apple processors compete with the fresh market for supply of apples," said a spokesman at the British Soft Drinks Association. "It is likely that, globally, supermarkets will charge more for apple juice to compensate for the raw material price increases."

The apple-growing industry has taken off in China with characteristic zeal.

"I was approached by businessmen from Guangdong," said Mr Wang Jichang, a farmer from Shaanxi province, one of the country's two main apple-growing regions.

Mr Wang was told if he ripped out the local Guoguang apple trees and replaced them with the Fuji variety, the businessmen would return and buy up all the fruit he produced.

Mr Wang said he had no regrets in swapping his patriotic trees for the Fuji, a hybrid developed in Japan, favoured by supermarkets and manufacturers. He has now earned enough to pay for his three children's high school and college education.

The apple-growing industry in the United States has suffered most from the competition, although shoppers in Britain have benefited from lower costs until now.

Prices were so low Americans accused the Chinese of "dumping" apple juice on the world market at less than the cost of production. That was before the frost last year interrupted a continuous rise in output.

"In 2005, export price of apple juice concentrate at Chinese customs was only US$500 to US$600 ($720 to $860) per ton. Now it's US$1,500 per ton," said Mr Sha Lixun, the deputy secretary of the China Fruit Marketing Association. — The Daily Telegraph