Cucumber Market Analysis for 2016 and Trend Forecast for 2017

Cucumber, also called green cucumber in southern China, is one of the important vegetable varieties consumed in our country. In 2015, the national planting area was 18.87 million mu, and the output reached 59.38 million tons, accounting for 5.8% and 7.8% of the total vegetables respectively. Cucumber cultivation areas are widely distributed, with the main producing areas in northern provinces such as Hebei, Shandong, Henan and Liaoning, while among southern provinces, Sichuan, Hunan and Hubei have more cultivation; planting methods include protected and open-field cultivation. Due to the advantages of protected greenhouses in temperature and humidity control, pest and disease prevention, and cultivation management, their yield per unit area is significantly higher than that of open-field cultivation. Cucumber demand is mainly domestic consumption, with a very low export proportion, and its market supply has obvious seasonal characteristics. Every year from April to August is the peak supply period, accounting for about 70% of the annual total market volume. In 2016, China's cucumber planting area expanded somewhat, output increased steadily, market prices rose slightly year on year, domestic consumption continued to increase, and exports declined. It is expected that in 2017 cucumber production and supply will remain basically stable, domestic consumption may continue to increase steadily, exports are expected to rebound, and market prices may show a steady upward trend. Cucumber growers should pay close attention to weather changes and price trends, guard against natural disasters and reasonably arrange the supply rhythm, while competent departments should strengthen information services to guide production and operation entities in reducing risks.

I. Analysis of the 2016 Market Supply and Demand Situation

In 2016, the national cucumber planting scale expanded, both production and consumption showed a steady slight increase, exports declined, the overall market supply and demand were stable, market prices rose slightly, and monthly fluctuations intensified.

(1) Expanded planting scale, steady increase in output

The “double increase” in cucumber planting scale and market prices in 2015 increased growers' production benefits and raised their enthusiasm for planting. In 2016, the cucumber planting area expanded to 19.34 million mu, up 2.5% year on year. In 2016, under the influence of adverse weather such as low temperatures and cold waves, cucumber yield per unit area fell 0.7% year on year to 3,123 kg/mu, but driven by the increase in planting area, total output rose slightly by 1.7% to 60.41 million tons.

(2) Demand remains strong, consumption increases steadily

Short-term cucumber consumption demand is mainly affected by factors such as prices and quality and safety incidents. Although cucumber wholesale prices rose slightly overall in 2016, they fell significantly year on year during the most concentrated market season from April to August; in terms of quality and safety, although the cucumber “magic potion” incident in Zibo, Shandong, spread online in April, it was quickly refuted by relevant departments and basically caused no major negative impact on overall cucumber consumption. According to estimates, cucumber consumption increased steadily in 2016, with total volume reaching 47.08 million tons, up 1.8% year on year.

(3) Exports declined, losses remain at a relatively high level

China has almost no cucumber imports. Exports mainly include chilled fresh cucumbers and cucumber slices, cucumbers prepared or preserved in vinegar or acetic acid, and salted or brined cucumbers. Export countries or regions include Japan, South Korea and Taiwan, China. According to data from the customs information network, from January to November 2016, China's cucumber export volume was 60,000 tons, down 10% year on year, and the full-year export volume is estimated at around 70,000 tons. Compared with leafy vegetables, cucumbers suffer relatively fewer losses, especially with a low loss rate during transportation; losses occur more in the picking and sales stages. In 2016, the comprehensive loss rate in production, picking, transportation, processing and sales was around 22%, still at a relatively high level.

(4) Wholesale prices rose slightly, and fluctuations intensified

With domestic production and consumption generally relatively stable, the cucumber market operated steadily overall in 2016. The annual average price was 3.52 yuan/kg, up 2.8% year on year, the smallest fluctuation range since 2010; supply changes caused by weather factors such as the large-scale low temperatures and cold waves from last winter to this spring, heavy rain and floods in some main southern producing areas from July to September, and warmer temperatures in northern main producing areas in the fourth quarter led to significant monthly price differences. The maximum monthly price difference within the year widened from 3.82 yuan/kg in 2015 to 5.51 yuan/kg, an increase of 44.2%, the largest value since 2009.

II. Expected Market Trend for 2017

In 2017, cucumber output is expected to remain relatively stable, consumption will continue to increase, exports are expected to rebound, the loss rate will decline, and the average monthly cucumber price may show a steady upward trend, with monthly changes still showing a “V”-shaped pattern, and the beginning and end of the year remaining price highs.

(1) Planting area slightly down, output remains relatively stable

Although cucumber prices generally trended upward in 2016, price fluctuations intensified, prices fell significantly during the concentrated market period in the second quarter, and in the fourth quarter supply and demand were somewhat loose, especially with difficulties in selling cucumbers in some areas of southern winter vegetable provinces. Therefore, what ordinary growers felt most deeply in 2016 was the “decline,” which had a key impact on their planting decisions for the following year. It is expected that the cucumber planting area in 2017 will be 19.03 million mu, down 1.6% from 2016; due to variety improvement and management upgrades, cucumber yield per unit area has generally increased in recent years, and this upward trend is expected to remain unchanged in 2017, up 1.1% year on year; cucumber output will reach 60.10 million tons, down slightly 0.5% year on year, still generally remaining relatively stable, with market supply guaranteed.

(2) Population and demand growth trends unchanged, consumption continues to increase

With the improvement of dietary structure, the overall trend of growth in residents' vegetable consumption will not change. As an important common vegetable variety, cucumber is deeply loved by residents. In addition, with increased awareness in recent years of its effects such as beautifying the face and nourishing the skin, clearing heat and detoxifying, cucumber consumption will show a sustained growth trend; in terms of population, most authoritative studies show that China's population will peak around 2030, and the increasing trend will remain unchanged in the years before that. Under the combined effect of population and demand growth, cucumber consumption in 2017 is expected to increase steadily, with domestic consumption reaching 47.40 million tons, up 0.7% year on year.

(3) Exports expected to rebound, loss rate to decline

In terms of exports, driven by the overall decline in merchandise imports and exports, cucumber exports declined in 2016. It is expected that with the overall recovery of the economic situation, exports are expected to rebound next year to a level of about 8 tons. Based on surveys of main producing areas and circulation markets, it is expected that in 2017 the proportion of cucumber losses to total output will slightly decline to about 21%, reaching 12.62 million tons.

(4) Wholesale prices may rise steadily, “V”-shaped pattern remains

In recent years, cucumber wholesale prices have basically shown a year-by-year stepwise upward trend, although the price bottom slightly “broke down” in 2016. However, with the external economic environment remaining stable and driven by planting costs, circulation costs and demand, the overall upward price trend has not changed. Under normal conditions in 2017, cucumber output will decline slightly year on year, while domestic consumer demand will increase steadily, and combined with an export rebound, cucumber prices next year may show a steady upward trend. Specifically, the average wholesale price will be in the range of 3.6-3.9 yuan per kg; monthly changes will still show a “V”-shaped pattern. Driven by consumer demand during the “two festivals,” prices in January-February at the beginning of the year will still be relatively high, but are expected to fall year on year; the second quarter will be the price trough period, but the bottom will rise somewhat; the year-end tail-raising phenomenon will still be prominent and may become the annual price high.

III. Production and Operation Recommendations

Based on the above analysis, the overall supply and demand in the cucumber market in 2017 will remain relatively stable, and prices will rise steadily, which is conducive to improving growers' returns. However, production risks brought by some uncertain factors and market risks shown in recent years need to be noted by growers and local management departments.

First, growers should pay close attention to production risks brought by natural disasters. In recent years, although China has reduced the impact of natural disasters on agricultural production by vigorously promoting basic infrastructure construction and strengthening disaster forecasting and prevention guidance, in practice the industry characteristic of agriculture “relying on the sky for food” has not been fundamentally changed. In 2016, abnormal weather changes from mid-to-late January to early February and after October, as well as smoggy weather after the onset of winter in the north, had a relatively obvious impact on the normal production rhythm, indicating that cucumber production still relies heavily on weather. In 2017, cucumber growers should pay close attention to weather changes and guard in advance against production risks brought by natural disasters such as low temperatures, cold waves and smog.

Second, growers should pay attention to market risks brought by intensified price fluctuations. In recent years, cucumber prices within the year have basically shown obvious “V”-shaped changes. Although the average price rose slightly in 2016, fluctuations intensified markedly. In the first quarter, wholesale market prices rose sharply by 25.1% year on year, fell sharply in the second quarter by 12.8% year on year, were relatively stable in the third quarter, and then fell sharply again in the fourth quarter by 15.5% year on year; the monthly average price in February and June respectively hit the highest and lowest values since 2013, and the monthly price difference of 5.5 yuan/kg was the largest since 2009. Intensified fluctuations led to significant differences in returns due to different market seasons. Growers should understand and grasp price trend changes as much as possible, plan planting batches in advance, reasonably arrange the supply rhythm, and promote “staggered market supply” of products to avoid the market risks this brings.

Third, local departments should strengthen information services and guide entities to make scientific decisions. Local departments can, through joint efforts with meteorological departments, carry out short-, medium- and long-term weather forecasts specifically for cucumber cultivation in local areas and external main producing areas during the growing season, especially forecasts of natural disasters such as low temperatures, rain and snow, and cold waves; strengthen the collection and service of local market information and market information from other main producing areas across the country, especially forming instructive information products integrated with knowledge added value; and guide farmers in correct decisions regarding scale adjustment, market pricing and disaster prevention through various information push methods such as agricultural information websites, mobile phone text messages, apps, radio and television.