Apple production doubles in ten years, export market becomes key to industry development

Many friends like to eat an apple between meals; it is sweet and tart, fragrant and juicy, and its nutrition is both comprehensive and easily absorbed by the human body. Behind this delicious and tasty fruit lies a massive industry.

Half the world

In June, a report released by the United States Department of Agriculture showed that in the 2015-2016 production season, global apple production would reach 76.9 million tonnes; among this, China's production growth was especially notable, increasing by about 2.1 million tonnes over the same period last year to reach 43 million tonnes. This is thanks to China's favourable climate and fertile soil suitable for crop growth.

Although production is huge, export volumes in past years have not been very large, at around 1 million tonnes per year, with fluctuations of course.

The same report also predicted that China's apple export volume would increase by 400,000 tonnes to reach 1.2 million tonnes.

So in fact, last year, that is June 2015, after lengthy negotiations, Yuncheng apples from Shanxi, on behalf of Chinese apples, were exported to the United States for the first time, becoming a milestone in the development of the domestic apple industry. Local sources introduced that Yuncheng is located at the southwestern tip of Shanxi Province, in the golden triangle region of the Yellow River spanning Shanxi, Shaanxi and Henan, and is recognised worldwide as a "golden production belt" for apples, and was designated by the Ministry of Agriculture as an advantageous apple industry belt of the Loess Plateau.

As the USDA report pointed out, (traditionally) China's apple export destinations have mainly been Asian countries, including Bangladesh, Thailand and others.

Doubling in ten years

In 2003, domestic apple production was 21 million tonnes, and by 2015 it reached 41 million tonnes, roughly doubling.

An industry insider once wrote, "The share of our country's apples in high-end markets such as Australia, the United States and Canada is only less than 2%, and markets such as Japan and South Korea have not yet opened up access for Chinese apples, so the supply-demand relationship is severely unbalanced."

Experts from the Shandong Entry-Exit Inspection and Quarantine Bureau pointed out that excessive market concentration can easily subject the importing country's market and local fruit industry to shocks, increasing the likelihood that importing countries will impose restrictions on our exported fruit, and at the same time making exporting enterprises more affected by changes in the importing country's economic and trade policies, reducing their ability to withstand risks, which is not conducive to the sustained and healthy development of the fruit industry.

In exports, Shandong apples account for one third of the share, and Yantai apples are "high quality and correspondingly high priced".

In 2015, Yantai's apple planting area was 2.72 million mu, with total production of about 5.5 million tonnes, an increase of about 15% over the previous year, and the accompanying problem was sales.

"This year's production increased by 20% to 25% over last year. Qixia accounts for one fifth of the national apple market share, and now supply exceeds demand." Sun Lingyun, vice president of the Yantai Fruit Industry Chamber of Commerce, said when facing the media in March this year. "This year, just the Fuji variety alone saw production increase by 87%, which is abnormal. If apple sales are to improve, much more effort must be put into reducing costs, improving varieties and scientific planting." A president surnamed Jiang of the Yantai Apple Association told reporters.

China began introducing Fuji apples in 1966. Today, Fuji-line apples are widely planted in Liaoning, Shandong, Hebei, Beijing and other places, and have replaced the late-maturing variety Guoguang. Fuji has the characteristics of being late-maturing, high quality, delicious and storage-resistant; among these, storage resistance is very important. With a certain degree of temperature control, Fuji apples can be kept for 5 to 7 months.

International market

Poland is the world's largest apple exporting country, with 80% of its production used for export. Second is China, followed by the United States; in addition, Chile and Italy are also important apple exporting countries.

Poland exported a total of 1.2 million tonnes of apples in 2013. In July 2014, Russia announced an import ban on most fruits and vegetables from Poland; previously nearly two thirds of Poland's apples were exported to Russia. After that, on the one hand, Russia expanded apple imports from China, and on the other hand, Poland hoped to export apples to the Chinese market.

Marguerite, head of the "Fruit Union", the Polish fruit and vegetable distributors' association, said in an interview with China Business News this year, "Polish fruit growers are very interested in the Chinese market. Of course, we also know that this is a brand-new market, with both opportunities and challenges."

E-commerce

According to China News Service, in March 2016, an Indian buyer reached an export order for 5,000 tonnes of apples with Luochuan in Shaanxi through a cross-border e-commerce platform; this was the first time local apples "went overseas" in e-commerce form.

Zhang Xingrui, deputy director of the Shaanxi Provincial Fruit Industry Administration, said that e-commerce is an important measure to promote the transformation and upgrading of the province's fruit industry, and in the future it will continue to advance fruit industry informatisation and expand export channels.

Well-known domestic apples include Tianshui Huaniu apples from Gansu, Luochuan Fuji from Shaanxi, Qianxian Red Fuji, Shandong Red Star, and Shanxi Wanrong, among others.

On the one hand, apples are a variety very familiar to overseas buyers, but on the other hand, for agricultural product procurement, contacting Chinese suppliers is a time-consuming and laborious task. Customers may not even know where the suppliers are. Agricultural product e-commerce, however, presents the time, place, people, matter and purchasing reasons well on the internet.

Shaanxi Radio and Television's "Shaanxi News Network" reported that in the first half of this year, fruit exports grew substantially with good momentum, among which apple exports were 51,000 tonnes, a year-on-year increase of 2.8 times. The report also pointed out, "Among the many agricultural products exported by our province, apple juice is foreigners' favourite; in the first half of the year 95,000 tonnes were exported, an increase of 31%. The United States and ASEAN are the main export markets."

Analysts at Yimutian believe that,for apple exports, it is not about seeking markets with a larger volume, since such a large market cannot be found, but rather about adjusting the product structure based on the consumption preferences of different markets, and further strengthening the industry on the basis that it has already grown large.

And in the supply-side structural adjustment of the industry, the application of agricultural product e-commerce is especially important.