Pomelo prices plummet: red-fleshed pomelo, Sanhong pomelo and grapefruit markets remain sluggish

At present, China is in the season when pomelos ripen and hit the market in concentrated volumes. In recent years, pomelo varieties have been upgraded and replaced markedly, and many former premium varieties have now fallen from grace, with low purchase prices and slow market movement.

Take the most traditional white-fleshed pomelo as an example: in Pinghe, Fujian, the price of white pomelo at the production area is as low as 0.5-0.6 yuan/jin, and the wholesale price at the Jiaxing fruit market is only 1 yuan/jin. This year, not only has white-fleshed pomelo lost its market, but the markets for red-fleshed pomelo and Sanhong pomelo are also extremely sluggish. In Pinghe, the purchase price of red pomelo is only 0.8 yuan/jin, while at the Jiaxing fruit market the wholesale price of Sanhong pomelo is 1.4-1.6 yuan/jin and red-fleshed pomelo is 1.2-1.3 yuan/jin. It is understood that buyers currently have little willingness to take delivery. They say competition in the market is too fierce, movement has already become very slow, and purchasing operations in the production areas can only be temporarily suspended.

In the past two years, after the emergence of red-fleshed pomelo and Sanhong pomelo, grapefruit quickly became popular in the pomelo industry, won great favor in the consumer market, and soon swept through wholesale markets. By this year, grapefruit has been popular for 3 years, and other pomelo varieties have been affected one after another, with their markets remaining persistently sluggish. This year many growers had originally planned to rely on grapefruit to achieve another bumper harvest, but reality once again disappointed them. Grapefruit ripens one month later than traditional pomelo, and this year grapefruit ripened roughly at the end of September. Farmers had thought grapefruit could still be as popular as in previous years, but this year's market directly slapped them in the face. Grapefruit that had just come onto the market at the end of September fetched a purchase price of 4 yuan/jin, a result similar to previous years. But soon afterward the market worsened and the purchase price kept falling. As of October 16, the purchase price at the production area had dropped to 1.5 yuan/jin, more than halving compared with 20 days earlier.

This year almost all pomelo varieties have fallen into a sluggish market, mainly for the following reasons. On the one hand, affected by climate and other factors, this year the market timing of honey pomelos from Hainan, Guangdong, Guangxi, Fujian and Yunnan did not stagger, resulting in large shipment volumes in a short period and, to a certain extent, pulling prices down; on the other hand, sales difficulties have been caused by the pandemic. Now, affected by the pandemic, export freight costs have risen, and many pomelos that should have been exported have been diverted to the domestic market, increasing competition in China's domestic pomelo market. The freight cost for one container from China to the Netherlands exceeds 10,000 US dollars, and the shipping time takes 4 weeks or even 7 weeks. This has not only pushed up the price of Chinese pomelos imported abroad, but many foreign importers have also chosen to give up importing.

In recent years, China's pomelo export volume has grown only to a limited extent, and now there are even signs of shrinkage. Statistics show that by 2020, China's annual pomelo export volume was only 170,000 tons, less than 5% of total domestic pomelo output. By contrast, the volume of imported pomelos has been increasing markedly. China's pomelo import volume has grown from 30,000 tons in 2015 to about 80,000 tons in 2020, and the import value has also grown from 36.66 million US dollars to 78.68 million US dollars.

In addition, the growth in domestic pomelo output has led to a shift in the relationship between supply and demand, which will cause the pomelo industry to remain sluggish in the long term. A few years ago, pomelo prices even approached 6 yuan/jin, and even in pomelo production areas the purchase price reached 2-3 yuan/jin. Compared with other fruits, pomelos have larger fruit, with a single fruit reaching as much as 4-5 jin. Moreover, pomelos are very high-yielding, with yields per mu reaching more than 5,000-6,000 jin. Calculated at the then market purchase price of 2 yuan/jin, the gross profit from one mu of pomelos reached tens of thousands of yuan, which spurred growers' desire to expand planting. Statistical data from the Ministry of Agriculture and Rural Affairs show that China's pomelo output began to grow rapidly in 2003, and by 2018 the domestic pomelo planting area had reached 1.4 million mu, with output breaking through 5 million tons. Moreover, this figure is still growing. According to incomplete statistics, by 2020, the national annual pomelo output had reached 5.227 million tons. It is no exaggeration to say that the current domestic pomelo market has moved toward supply saturation, or even overcapacity. At the same time, rapid expansion of planting has brought more and more novices into the industry, planting models and management levels vary widely, and pomelo quality also differs considerably.