China to trounce Europe in apple export market

China's apple exports are to jump by nearly one-quarter in 2009-10 - leaving its closest competitor, Europe, in the shade - as its orchard area hits 2m hectares and demand from juice processors slumps.

China, the world's biggest apple producer and consumer, will export 1.46m tonnes of apples in the marketing year, which ends next July, increasing its grip on the world export market and – depending on whose forecasts are used – overtaking Europe for the first time.

The 287,000-tonne increase will reflect in part a bigger apple crop, as new orchards begin to bear fruit and tree management improves, with "prudent" fertilizer applications improving quality too.

Both the appearance and sweetness of China's apple crop have "greater improved", a report from US officials in Beijing said, noting "robust" demand from Asian and Middle Eastern buyers.

'Processors' woes'

However, the improving prospects for table apples contrast with the weak prospects for the China's juice processors, who are on course to cut output by 18% in response to a slump in demand blamed on the global economic downturn.

The juice industry, which exports a little under 90% of its production, has seen prices of its exports near-halve to $830 a tone in the year to September, while those of fresh apples have risen marginally to $620 a tonne.

The slowdown is prompting processors to consolidate, the report said, noting merger activity in Shandong, the country's biggest apple-producing province.

"Although a generally a new phenomenon, such mergers are expected to continue as the juicing business matures, and the market becomes increasingly competitive."

One ray of hope for the sector was the unexpected cold snap last month in Poland, which could curb juice output in Europe's top ranked apple-growing nation, and a key competitor in the juice market.

Processors are also trying innovations such as dehydrated apple chips to open fresh market opportunities.

'Most popular fruit'

Indeed, the lowly rate of juice consumption among Chinese contrasts with their strong appetite for fresh apples.

"Apples are the most popular fruit in China," the report said.

"As the middle class expands, the demand for apples has grown, particularly in more developed urban areas where the very best quality apples are sold regardless of price."

The country's consumption of fresh apples would rise 11.4% to 26.6m tonnes in 2009-10, the briefing forecast.