Guavas Flowering and Fruiting at the Same Time Cause March Trading Volume to Surge by 70%, Prices Drop, Please Eat More
The crisp and refreshing Pearl Guava has always been popular in the market, but because last August's heavy rains knocked all the guava flowers off in every production area, this year all guavas flowered and fruited at the same time, causing volume to surge and prices to fall. In March of this year (2019), guava trading volume at Taipei Agricultural Products Marketing Corporation alone was 1,714,785 kg, nearly 70% more than the 1,012,283 kg traded in March last year.
Looking at March 29, the day with the largest arrival volume at Taipei Agricultural Products Marketing Corporation in March, trading volume reached 98,451 kg, nearly 3 times the 31,568 kg on the same day last year (2018). The trading price fell from 40.1 last year to 9.9 yuan, dropping below the Agriculture and Food Agency's market monitoring price of 12.6 yuan. On March 31, trading volume decreased to 66,117 kg and the price slightly recovered to 12.5 yuan, still 0.1 yuan below the Agriculture and Food Agency's monitoring price.
Su Mao-hsiang, Deputy Director-General of the Agriculture and Food Agency, stated that guava prices are currently at their lowest trough. The central and local governments have already invested in fresh fruit exports and processing of substandard fruit to ease the current guava production volume. Guava prices are expected to recover in early April, and the public is encouraged to consume more domestically grown guavas.
News Mini-Glossary: The Agriculture and Food Agency sets origin monitoring prices and market monitoring prices for agricultural products. When prices approach or fall below the monitoring price, assistance measures are activated. The origin monitoring price for guava is 9.8 yuan per kg, and the Taipei Agricultural Products Marketing Corporation (auction site) monitoring price is 12.6 yuan.
Guava Volume High and Prices Falling, Kaohsiung Production Area: Do Not Overemphasize Low Prices, Which Drives Prices Down Further
Domestic guava production areas are mainly distributed in Kaohsiung, Pingtung, and Tainan, with Kaohsiung having the highest output, accounting for 90%, and Yanchao and Dashe being the most important production areas. Hsieh Ming-yuan, Director of the Promotion Section at the Dashe Farmers' Association, stated that this guava price fluctuation was mainly caused by last year's floods knocking off all the guava flowers. Each guava production area originally could stagger flowering and regulate fruiting, but the wind and rain knocked the guava flowers down, causing all production areas to uniformly sprout, flower, and fruit, concentrating Kaohsiung's guava output entirely at the present time, with high volume and consequently falling prices.
Hsieh Ming-yuan stated that on March 31, Dashe guava trading prices were 12 yuan for the high grade, 8 yuan for the medium grade, and 6 yuan for the low grade, all below the Agriculture and Food Agency's auction site monitoring price.
Li Pang-ching, the guava category manager at the Yanchao Farmers' Association Supply and Marketing Department, stated that prices differ in each guava production area. Yanchao has 18 production-marketing groups jointly handling transportation and sales. On March 31, guava trading prices were approximately 23 yuan for the high grade, 15 yuan for the medium grade, and 10 yuan for the low grade. "You can say there are bad ones among the bad, but good ones still exist too! Some even fetched a highest price of 35 yuan per kg," Li Pang-ching emphasized with slight indignation. "You cannot look only at a single production area and price figure. That easily causes misleading impressions, making purchasing prices get stuck at that figure."
Pingtung Production Area: Recently Many Substandard Guavas, Purchasing Prices Lower
Pingtung County is the third-largest county or city in domestic guava cultivation area. Cheng Yung-yu, Deputy Director of the Agriculture Department of the Pingtung County Government, stated that Pingtung's main guava cultivation areas are in Ligang Township, Yanpu Township, and Gaoshu Township. The season with better quality is winter and early spring. Recently, because guavas have less moisture and soften quickly, there are more substandard fruit cases.
Kuo Chang-chen, Manager of the Pingtung Dahe Agricultural Specialty Products Production Cooperative, added that in addition to quality, which sales channel the fruit goes to is also one of the factors determining purchasing price. According to his understanding, purchasing prices in Pingtung generally fall around 10 to 13.3 yuan per kg. He believes the recent lower prices are due to a bumper harvest with high volume, and additionally because during the Qingming Festival period guavas cannot be used as offering fruit, so prices have been relatively low for the past one or two weeks. After Qingming Festival, prices should recover.
Kaohsiung City Government: Export Matchmaking in Progress, Cooperating with the Central Government to Process Substandard Fruit
As the largest guava production area, Lin Hsiang-hsun, Section Chief of the Marketing and Counseling Section of the Kaohsiung City Agriculture Bureau, stated that last year's floods did indeed affect this year's guava production volume and prices. Kaohsiung currently focuses mainly on domestic sales, cooperating with hypermarkets to sell guavas, such as working with Carrefour large-scale channels; Pxmart supermarkets will also launch a "Kaohsiung Season" through the end of April to sell Yanchao guavas. Export matchmaking is still in progress, with possible targets including China, Singapore, and Canada.
Lin stated that the Kaohsiung City Agriculture Bureau hopes guava prices will stabilize within ten days, and is very willing to cooperate with the central government to resolve substandard guavas that are of poorer quality and cannot be sold as fresh fruit through processing methods.
Mass Production Unrelated to Overplanting, Tainan Prices Low Because Near End of Production Area Season
Regarding Tainan guava prices being much lower than Pingtung and Kaohsiung, falling below the origin monitoring price of 9.6 yuan, Su Mao-hsiang stated that because the local production area is nearing the end of harvest, quality is not as good as before, so prices are worse, but during the production season prices would not be too low.
As for whether mass production is related to farmers overplanting? According to Council of Agriculture statistics, guava cultivation area has changed little over the past ten years. Although 2017 increased by 160 hectares compared to the previous year, guavas can stagger their production periods and under normal conditions would not be too concentrated in peak production. The main cause of this price drop is still the floods causing simultaneous flowering and fruiting across all areas.
Three Counseling Measures: Substandard Fruit Processing, Strengthened Domestic Sales, Export Cold Chain Counseling
The Agriculture and Food Agency stated that three guava counseling measures have been activated, including processing, strengthened domestic sales, and export cold chain counseling.
For the processing portion, the current announced volume from major production area county and city governments has reached 1,200 metric tons. To increase processed product absorption, the total announced target is set at 3,000 metric tons, and the substandard fruit purchasing price is set at 8 yuan per kg. Processing subsidies are raised from 2 yuan to 3 yuan per kg, and collection and transportation fees are also raised from 2 yuan to 3 yuan.
In addition to substandard fruit processing, domestic marketing of fresh fruit will also be strengthened. For example, marketing at Taipei Hope Plaza, Flora Expo Holiday Market, New Taipei City farmers' association supermarkets, Pxmart and other mass merchandise supermarket channels, and for mass merchandise retailers such as Carrefour, counseling will also be provided to expand guava marketing. Additionally, large consumption units such as the Top 100 Enterprises, government agencies and organizations, and state-owned enterprises are encouraged to place orders.
Furthermore, in the export market segment, the Agriculture and Food Agency will subsidize farmers' groups with 1/2 to 1/3 of the funding to set up cold chain equipment needed for exports, and encourage exporters to accelerate expansion into overseas markets during the peak production period to stabilize market prices. Su Mao-hsiang, Deputy Director-General of the Agriculture and Food Agency, stated that guava prices are currently at their lowest trough. The central and local governments have already invested in fresh fruit exports and processing of substandard fruit to ease the current guava production volume. Guava prices are expected to recover in early April, and the public is encouraged to consume more domestically grown guavas.