Voluntary Report - public distribution

**Date:** 4/13/2006

**GAIN Report Number:** CH6017

CH6017

**China, Peoples Republic of**

**Fresh Deciduous Fruit (Update on Apples)**

**2006**

**Approved by:**

![](media/image1.wmf)LaVerne E. Brabant

U.S. Embassy

**Prepared by:**

Kevin Latner & Wu Bugang

**Report Highlights:** China's apple production in 2005/2006 is
estimated to be down 15 percent from last year's bumper crop to 20.4
million metric tons (MMT). Despite the drop in production, fruit quality
has improved. China's concentrated apple juice (CAJ) production in
2005/2006 is also estimated to drop by about 10 percent from the
previous year to 585,000 MT. Declines in apple juice production are
modest considering the increased cost of sourcing apples because of
continuing strong global demand.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[2005 Apple Crop Estimated to drop by 15%
3](#apple-crop-estimated-to-drop-by-15)

[CAJ Production Seen Down 10% on Shortages of Raw Material
3](#caj-production-seen-down-10-on-shortages-of-raw-material)

[Production, Supply, and Demand (PSD) Tables and Trade Matrices
4](#production-supply-and-demand-psd-tables-and-trade-matrices)

[Apples 4](#apples)

[Apple Trade Matrix Tables 5](#apple-trade-matrix-tables)

[Apple Average National Chinese Export Price Table
6](#apple-average-national-chinese-export-price-table)

[Concentrated Apple Juice (CAJ) 7](#concentrated-apple-juice-caj)

[CAJ Trade Matrix Tables 8](#caj-trade-matrix-tables)

[CAJ Average National Chinese Export Price Table
9](#caj-average-national-chinese-export-price-table)

# 2005 Apple Crop Estimated to drop by 15%

China's apple production in 2005/2006 is estimated to be down about 15
percent from last year's bumper crop to 20.4 million metric tons (MMT).
Cold temperatures in late spring appear to have affected a wide area in
the northern apple production region. Major producing provinces like
Shandong, Hebei, Henan and Shanxi all saw their apple production decline
by 10 to 20 percent. Despite the drop in production, fruit quality has
improved.

As a result of the production decline, apple exports are forecast to be
down nearly 8 percent from the previous season to 780,000 MT. Given
domestic apples prices increased more than 20 percent over last year,
many apples were sold domestically instead of going overseas.

# CAJ Production Seen Down 10% on Shortages of Raw Material

China's concentrated apple juice (CAJ) production in 2005/2006 is
estimated to drop by 10 percent from the previous year to 585,000 MT. As
a result of the short crop and increased quality apple-processing
companies have had difficulty sourcing juicing apples and prices are up
30 to 50 percent from the previous season. Compounding the problem CAJ
production capacity have expanded as new juicing plants have come
on-line.

Declines in apple juice production are modest considering the increased
cost of sourcing apples because of continuing strong global demand.
Official Chinese Customs statistics indicate China exported 283,629 MT
of CAJ July-December 2005, up 49 percent over the same period of the
previous year. December export prices for CAJ were US \$760 per ton, up
7 percent from the previous year. Despite the probability of higher
global prices, Chinese CAJ exports are likely to slow down in the second
half of 2005/2006 as supply tightens.

# Production, Supply, and Demand (PSD) Tables and Trade Matrices

## Apples

+-------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**     |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | ###   |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | **Ap  |       |       |       | (HA)  |       |
|                   | ples, |       |       |       | (1000 |       |
|                   | Fr    |       |       |       | TREES |       |
|                   | esh** |       |       |       | )(MT) |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2003  | Re    | 2004  | Est   | 2005  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Estim | Off   | Estim | Off   | Estim |
|                   | icial | ate\[ | icial | ate\[ | icial | ate\[ |
|                   | \[    | New\] | \[    | New\] | \[    | New\] |
|                   | Old\] |       | Old\] |       | Old\] |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 07    |       | 07    |       | 07    |
| Begin**           |       | /2003 |       | /2004 |       | /2005 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Planted      | 19    | 19    | 18    | 18    | 0     | 18    |
|                   | 01000 | 00500 | 90000 | 76700 |       | 50000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested    | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Bearing Trees     | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Bearing Trees | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Total Trees       | 0     | 0     | 0     | 0     | 0     | 0     |
+-------------------+-------+-------+-------+-------+-------+-------+
| Commercial        | 210   | 211   | 202   | 236   | 0     | 204   |
| Production        | 00000 | 00000 | 00000 | 75000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Non-Comm.         | 0     | 0     | 0     | 0     | 0     | 0     |
| Production        |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Production  | 210   | 211   | 202   | 236   | 0     | 204   |
|                   | 00000 | 00000 | 00000 | 75000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports     | 36853 | 36853 | 45000 | 36945 | 0     | 33600 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 210   | 211   | 202   | 237   | 0     | 204   |
|                   | 36853 | 36853 | 45000 | 11945 |       | 33600 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic Fresh    | 165   | 166   | 152   | 179   | 0     | 154   |
| Consump           | 28447 | 28447 | 95000 | 94935 |       | 53600 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports, Fresh    | 7     | 7     | 8     | 8     | 0     | 7     |
| Only              | 08406 | 08406 | 50000 | 42010 |       | 80000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| For Processing    | 38    | 38    | 41    | 48    | 0     | 42    |
|                   | 00000 | 00000 | 00000 | 75000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Withdrawal From   | 0     | 0     | 0     | 0     | 0     | 0     |
| Market            |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL UTILIZATION | 210   | 211   | 202   | 237   | 0     | 204   |
|                   | 36853 | 36853 | 45000 | 11945 |       | 33600 |
+-------------------+-------+-------+-------+-------+-------+-------+

According to industry sources: 7.0-7.5 MT Fresh Apples is required to
produce 1 MT

If CAJ at the 70/71 Brix level.

## Apple Trade Matrix Tables

+------------------+----------------+--------------+------------------+
| ####### Exp      |                |              |                  |
| ort Trade Matrix |                |              |                  |
+------------------+----------------+--------------+------------------+
| **Country**      | China, Peoples |              |                  |
|                  | Republic of    |              |                  |
+------------------+----------------+--------------+------------------+
| **Commodity**    | Apples, Fresh  |              |                  |
+------------------+----------------+--------------+------------------+
| Time Period      |                | Units:       | MT               |
+------------------+----------------+--------------+------------------+
| Exports for:     | 2003           |              | **2004**         |
+------------------+----------------+--------------+------------------+
| U.S.             | 58             | U.S.         | 191              |
+------------------+----------------+--------------+------------------+
| Others           |                | Others       |                  |
+------------------+----------------+--------------+------------------+
| Russia           | 100225         | Russia       | 113307           |
+------------------+----------------+--------------+------------------+
| Philippines      | 67635          | Vietnam      | 94699            |
+------------------+----------------+--------------+------------------+
| Vietnam          | 63512          | Indonesia    | 75191            |
+------------------+----------------+--------------+------------------+
| Indonesia        | 51757          | Philippines  | 62306            |
+------------------+----------------+--------------+------------------+
| Thailand         | 49281          | Thailand     | 52661            |
+------------------+----------------+--------------+------------------+
| Malaysia         | 42372          | Malaysia     | 49293            |
+------------------+----------------+--------------+------------------+
| Kazakhstan       | 39393          | Netherlands  | 35965            |
+------------------+----------------+--------------+------------------+
| Singapore        | 28197          | Kazakhstan   | 32347            |
+------------------+----------------+--------------+------------------+
| Hong Kong        | 25636          | Singapore    | 28112            |
+------------------+----------------+--------------+------------------+
| Netherlands      | 21117          | Hong Kong    | 27349            |
+------------------+----------------+--------------+------------------+
| Total for Others | 489125         |              | 571230           |
+------------------+----------------+--------------+------------------+
| Others not       | 120257         |              | 202478           |
| Listed           |                |              |                  |
+------------------+----------------+--------------+------------------+
| Grand Total      | 609440         |              | 773899           |
+------------------+----------------+--------------+------------------+

+----------------+--------------------+--------------+-----------------+
| ####### Impor  |                    |              |                 |
| t Trade Matrix |                    |              |                 |
+----------------+--------------------+--------------+-----------------+
| **Country**    | China, Peoples     |              |                 |
|                | Republic of        |              |                 |
+----------------+--------------------+--------------+-----------------+
| **Commodity**  | Apples, Fresh      |              |                 |
+----------------+--------------------+--------------+-----------------+
| Time Period    |                    | Units:       | MT              |
+----------------+--------------------+--------------+-----------------+
| Imports for:   | 2003               |              | **2004**        |
+----------------+--------------------+--------------+-----------------+
| U.S.           | 18972              | U.S.         | 19465           |
+----------------+--------------------+--------------+-----------------+
| Others         |                    | Others       |                 |
+----------------+--------------------+--------------+-----------------+
| Chile          | 13245              | Chile        | 12649           |
+----------------+--------------------+--------------+-----------------+
| New Zealand    | 9267               | New Zealand  | 5101            |
+----------------+--------------------+--------------+-----------------+
| Vietnam        | 131                | Japan        | 43              |
+----------------+--------------------+--------------+-----------------+
| North Korea    | 19                 |              |                 |
+----------------+--------------------+--------------+-----------------+
| Japan          | 1                  |              |                 |
+----------------+--------------------+--------------+-----------------+
|                |                    |              |                 |
+----------------+--------------------+--------------+-----------------+
| Total for      | 22663              |              | 17793           |
| Others         |                    |              |                 |
+----------------+--------------------+--------------+-----------------+
| Others not     | 0                  |              | 0               |
| Listed         |                    |              |                 |
+----------------+--------------------+--------------+-----------------+
| Grand Total    | 41635              |              | 37258           |
+----------------+--------------------+--------------+-----------------+

## Apple Average National Chinese Export Price Table

+------------------------+--------------+--------------+--------------+
| ####### Prices Table   |              |              |              |
+------------------------+--------------+--------------+--------------+
| **Country**            | China,       |              |              |
|                        | Peoples      |              |              |
|                        | Republic of  |              |              |
+------------------------+--------------+--------------+--------------+
| **Commodity**          | Apples,      |              |              |
|                        | Fresh        |              |              |
+------------------------+--------------+--------------+--------------+
| Prices in              | US\$ FOB     | per uom      | MT           |
+------------------------+--------------+--------------+--------------+
|                        | China        |              |              |
+------------------------+--------------+--------------+--------------+
| Year                   | 2004         | 2005         | \% Change    |
+------------------------+--------------+--------------+--------------+
| Jan                    | 350          | 350          | 0%           |
+------------------------+--------------+--------------+--------------+
| Feb                    | 310          | 330          | 6%           |
+------------------------+--------------+--------------+--------------+
| Mar                    | 390          | 350          | -10%         |
+------------------------+--------------+--------------+--------------+
| Apr                    | 390          | 390          | 0%           |
+------------------------+--------------+--------------+--------------+
| May                    | 430          | 400          | -7%          |
+------------------------+--------------+--------------+--------------+
| Jun                    | 460          | 400          | -13%         |
+------------------------+--------------+--------------+--------------+
| Jul                    | 400          | 400          | 0%           |
+------------------------+--------------+--------------+--------------+
| Aug                    | 330          | 370          | 12%          |
+------------------------+--------------+--------------+--------------+
| Sep                    | 300          | 320          | 7%           |
+------------------------+--------------+--------------+--------------+
| Oct                    | 340          | 370          | 9%           |
+------------------------+--------------+--------------+--------------+
| Nov                    | 360          | 390          | 8%           |
+------------------------+--------------+--------------+--------------+
| Dec                    | 330          | 390          | 18%          |
+------------------------+--------------+--------------+--------------+
|                        |              |              |              |
+------------------------+--------------+--------------+--------------+
| Date of Quote          | 2/9/2006     | MM/DD/YYYY   |              |
+------------------------+--------------+--------------+--------------+

## Concentrated Apple Juice (CAJ)

+-------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**     |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Country**       | ###   |       |       |       |       |       |
|                   | ### C |       |       |       |       |       |
|                   | hina, |       |       |       |       |       |
|                   |  Peop |       |       |       |       |       |
|                   | les R |       |       |       |       |       |
|                   | epubl |       |       |       |       |       |
|                   | ic of |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**     | **    |       |       |       |       |       |
|                   | Apple |       |       |       |       |       |
|                   | J     |       |       |       |       |       |
|                   | uice, |       |       |       |       |       |
|                   | Conc  |       |       |       |       |       |
|                   | entra |       |       |       |       |       |
|                   | ted** |       |       |       |       |       |
|                   |       |       |       |       |       |       |
|                   | (MT)  |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | 2003  | Re    | 2004  | Est   | 2005  | For   |
|                   |       | vised |       | imate |       | ecast |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                   | Off   | Estim | Off   | Estim | Off   | Estim |
|                   | icial | ate\[ | icial | ate\[ | icial | ate\[ |
|                   | \[    | New\] | \[    | New\] | \[    | New\] |
|                   | Old\] |       | Old\] |       | Old\] |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Market Year     |       | 07    |       | 07    |       | 07    |
| Begin**           |       | /2003 |       | /2004 |       | /2005 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Deliv. To         | 38    | 38    | 41    | 45    | 0     | 42    |
| Processors        | 00000 | 00000 | 00000 | 00000 |       | 00000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks  | 2392  | 2392  | 1372  | 1372  | 1047  | 51047 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Production        | 5     | 5     | 5     | 6     | 0     | 5     |
|                   | 19000 | 19000 | 65150 | 50000 |       | 85000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Imports           | 679   | 360   | 900   | 803   | 0     | 200   |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY      | 5     | 5     | 5     | 6     | 1047  | 6     |
|                   | 22071 | 21752 | 67422 | 52175 |       | 36247 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Exports           | 4     | 4     | 5     | 5     | 0     | 5     |
|                   | 85699 | 84692 | 27500 | 56152 |       | 80000 |
+-------------------+-------+-------+-------+-------+-------+-------+
| Domestic          | 35000 | 35688 | 38875 | 44976 | 0     | 42000 |
| Consumption       |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks     | 1372  | 1372  | 1047  | 51047 | 0     | 14247 |
+-------------------+-------+-------+-------+-------+-------+-------+
| TOTAL             | 5     | 5     | 5     | 6     | 0     | 6     |
| DISTRIBUTION      | 22071 | 21752 | 67422 | 52175 |       | 36247 |
+-------------------+-------+-------+-------+-------+-------+-------+

## CAJ Trade Matrix Tables

+------------------+----------------+-----------------+----------------+
| ####### Exp      |                |                 |                |
| ort Trade Matrix |                |                 |                |
+------------------+----------------+-----------------+----------------+
| **Country**      | China, Peoples |                 |                |
|                  | Republic of    |                 |                |
+------------------+----------------+-----------------+----------------+
| **Commodity**    | ######         |                 |                |
|                  | ## Apple Juice |                 |                |
|                  | , Concentrated |                 |                |
+------------------+----------------+-----------------+----------------+
| Time Period      |                | Units:          | MT             |
+------------------+----------------+-----------------+----------------+
| Exports for:     | 2003           |                 | **2004**       |
+------------------+----------------+-----------------+----------------+
| U.S.             | 163771         | U.S.            | 239392         |
+------------------+----------------+-----------------+----------------+
| Others           |                | Others          |                |
+------------------+----------------+-----------------+----------------+
| Russia           | 46627          | Japan           | 49900          |
+------------------+----------------+-----------------+----------------+
| Germany          | 44795          | Russia          | 39715          |
+------------------+----------------+-----------------+----------------+
| Japan            | 39372          | Australia       | 33739          |
+------------------+----------------+-----------------+----------------+
| Netherlands      | 38852          | Netherlands     | 33290          |
+------------------+----------------+-----------------+----------------+
| Australia        | 23280          | Canada          | 25600          |
+------------------+----------------+-----------------+----------------+
| Canada           | 21644          | Germany         | 22056          |
+------------------+----------------+-----------------+----------------+
| New Zealand      | 4782           | New Zealand     | 5455           |
+------------------+----------------+-----------------+----------------+
| U.K.             | 4408           | U.K.            | 4136           |
+------------------+----------------+-----------------+----------------+
| South Africa     | 3775           | Israel          | 3937           |
+------------------+----------------+-----------------+----------------+
| Israel           | 3627           | South Africa    | 3666           |
+------------------+----------------+-----------------+----------------+
| Total for Others | 231162         |                 | 221494         |
+------------------+----------------+-----------------+----------------+
| Others not       | 22614          |                 | 25530          |
| Listed           |                |                 |                |
+------------------+----------------+-----------------+----------------+
| Grand Total      | 417547         |                 | 486416         |
+------------------+----------------+-----------------+----------------+

+-------------------+--------------+--------------+------------------+
| ####### Im        |              |              |                  |
| port Trade Matrix |              |              |                  |
+-------------------+--------------+--------------+------------------+
| **Country**       | China,       |              |                  |
|                   | Peoples      |              |                  |
|                   | Republic of  |              |                  |
+-------------------+--------------+--------------+------------------+
| **Commodity**     | ######## A   |              |                  |
|                   | pple Juice,  |              |                  |
|                   | Concentrated |              |                  |
+-------------------+--------------+--------------+------------------+
| Time Period       |              | Units:       | MT               |
+-------------------+--------------+--------------+------------------+
| Imports for:      | 2003         |              | **2004**         |
+-------------------+--------------+--------------+------------------+
| U.S.              | 8            | U.S.         | 4                |
+-------------------+--------------+--------------+------------------+
| Others            |              | Others       |                  |
+-------------------+--------------+--------------+------------------+
| Taiwan            | 57           | Kyrgyzstan   | 352              |
+-------------------+--------------+--------------+------------------+
| Australia         | 49           | Japan        | 184              |
+-------------------+--------------+--------------+------------------+
| South Korea       | 23           | China        | 165              |
+-------------------+--------------+--------------+------------------+
| Germany           | 23           | Australia    | 94               |
+-------------------+--------------+--------------+------------------+
| China             | 20           | Israel       | 74               |
+-------------------+--------------+--------------+------------------+
| Hungary           | 12           | South Korea  | 32               |
+-------------------+--------------+--------------+------------------+
| Kazakhstan        | 6            | India        | 19               |
+-------------------+--------------+--------------+------------------+
| Turkey            | 6            | Hungary      | 12               |
+-------------------+--------------+--------------+------------------+
| Netherlands       | 6            | Oman         | 6                |
+-------------------+--------------+--------------+------------------+
| Japan             | 5            | Germany      | 3                |
+-------------------+--------------+--------------+------------------+
| Total for Others  | 207          |              | 941              |
+-------------------+--------------+--------------+------------------+
| Others not Listed | 13           |              | 13               |
+-------------------+--------------+--------------+------------------+
| Grand Total       | 228          |              | 958              |
+-------------------+--------------+--------------+------------------+

## CAJ Average National Chinese Export Price Table

  ---------------- --------------------------- --------------- -----------
  **Country**      China, Peoples Republic of                  

  **Commodity**    Apple Juice, Concentrated                   

  Prices in        US\$ FOB                    per uom         MT

                   China                                       

  Year             2004                        2005            \% Change

  Jan              630                         700             11%

  Feb              630                         700             11%

  Mar              650                         690             6%

  Apr              660                         690             5%

  May              650                         700             8%

  Jun              660                         690             5%

  Jul              670                         690             3%

  Aug              710                         700             -1%

  Sep              700                         700             0%

  Oct              690                         700             1%

  Nov              710                         730             3%

  Dec              710                         760             7%

                                                               

  Date of Quote    2/9/2006                    MM/DD/YYYY      
  ---------------- --------------------------- --------------- -----------