2017 China Apple Crop Outlook. SDIC Zhonglu Fruit Juice Company Zhonglu America Corporation Michael Choi

Transcription

1 2017 China Apple Crop Outlook SDIC Zhonglu Fruit Juice Company Zhonglu America Corporation Michael Choi

2 Crop Review Crop Utilization Crop Forecast 4 Apple Export, Import, Apple Price 1

3 Crop Review

4 2016 Apple Production In Major Provinces ,781 3,601 11,008 4,2863,656 2,566 Shaanxi Shandong 4,386 Henan Shanxi (Unit: 1,000 MT) Source: China Ministry of Agriculture 2016 China Apple Production: 43,882,000 MT Hebei Gansu Liaoning 3

5 2016 Apple Production Estimate vs Final Count Estimate made in Aug 2016 Official Count by China MOA in Jul 2017 (Unit: 1,000 MT) Source: China Ministry of Agriculture 4

6 Apple Production by Province 2012~ : 15 5-Year Average 16 : 5-yr Average Shaanxi 9,651 9,428 9,880 10,373 11, % 10, % Shandong 8,710 9,305 9,297 9,584 9, % 9, % Henan 4,367 4,431 4,417 4,496 4, % 4, % Shanxi 3,752 3,962 4,173 4,312 4, % 4, % Hebei 3,115 3,201 3,457 3,666 3, % 3, % Gansu 2,488 2,696 2,971 3,286 3, % 3, % Liaoning 2,634 2,752 2,476 2,484 2, % 2, % Others 3,774 3,908 4,252 4,412 4, % 4, % All China 38,491 39,683 40,923 42,613 43, % 41, % (Unit: 1,000 MT) Source: China Ministry of Agriculture 5

7 Apple Production, Planted Acreage 2012~2016 (Source: China Ministry of Agriculture) 50,000 45,000 40,000 35,000 30,000 25,000 20,000 CAGR: 3.33% 43,882 42,613 40,923 39,683 38,491 2,328 2,324 2,307 2,272 2,231 CAGR: 1.03% ,500 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 2,050 2,000 Apple Production (1,000 MT) Acreage (1,000 Ha) 6

8 China Apple Production ( ) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, ,862 Average Annual Increase: 1,760K MT 2, ,048 1,801 1,987 3 MM MT 1,834 1,582 19,240 21,102 23,676 24,011 26,059 27,860 29,847 31,681 33,263 2,722 2,506 1,192 4 MM MT 1,240 1,690 1,269 60,000 35,985 38,491 39,683 40,923 42,613 43,882 Total Increase: 128.1%, CAGR: 6.07% Production Change Total 50,000 40,000 30,000 20,000 10,000 (Unit: 1,000 MT) Source: China Ministry of Agriculture 7

9 Apple Crop by Variety 2012 ~ % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1,898 1,850 1,646 1,699 1,648 9,726 10,475 10,077 10,042 10,324 26,867 27,358 29,200 30,872 31, % 68.9% 71.4% 72.4% 72.7% Fuji Others (mostly Gala, Qinguan) Guoguang (Unit: 1,000 MT) Source: China Ministry of Agriculture 8

10 1 2 Apple Crop Utilization 3 4 9

11 CY 2016 Apple Utilization 10-Year Utilization for Apple JC 2016 Production + Import 43,949K MT 2,500, 6% 3,906, 9% 36,043, 82% 1,500, 3% Used for Apple Juice Concentrate 8.9% 8.1% 7.2% 8.9% 13.5% 12.2% 12.1% 14.4% 18.9% Fresh Consumption AJC Processing % Other Processing Export 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 10

12 Apple Crop Forecast 4 11

13 Apples in Shaanxi Province Aug 1, 2017 Gala New Crop Gala Apple Qinguan 12

14 This image cannot currently be displayed. This image cannot currently be displayed. This image cannot currently be displayed. Apples in Shanxi Province Aug 3, 2017 Gala Qinguan Fuji 13

15 This image cannot currently be displayed. Fuji Apple in Shandong Aug 5,

16 2017 Apple Crop Forecast For Major Growing Provinces Shanxi Drought impact on early variety, but 6% increase Gansu Hail storm, but new acreage, improved yield: 6% increase Shaanxi Good weather. Drought impact on early variety. 7% increase Henan Good weather. Drought impact on early variety. 7% increase Liaoning Severe drought in in the south. Bur new acreage in the noth. 5% reduction Hebei Drought but new acreage and better yield. 1% increase Shandong Severe drought: 6% reduction 2017 Crop Forecast: 45,076,000 (2.7% increase from 2016) 15

17 Apple Production by Province 2015~ E Provinces : 16 5 Yr ( 12-16) Average 17 : 5-yr Average Shaanxi 10,373 11,008 11,779 7% 10, % Shandong 9,584 9,781 9,194-6% 9, % Henan 4,496 4,386 4,693 7.% 4, % Shanxi 4,312 4,286 4,543 6% 4, % Hebei 3,666 3,656 3,693 1% 3, % Gansu 3,286 3,601 3,817 6% 3, % Liaoning 2,484 2,566 2,438-5% 2, % Others 4,412 4,598 4,920 7% 4, % All China 42,613 43,882 45, % 41, % (Unit: 1,000 MT) Source: China Ministry of Agriculture 16

18 Apple Export, Import. Wholesale Price 17

19 Apple Export by Year 2012~2017 Qty: 1,000 MT Price/MT 1,400 $1,400 1,200 1,000 $984 $1,036 $1,188 $1,238 $1,099 $1,127 $1,031 $1,200 $1, , $800 $600 $400 $ (1-6) 2017 (1-6) $0 Source: China Customs 18

20 2016 Apple Export By Major Countries 2016 Total Apple Export: 1,322,042 MT Bangladesh, 181,437, 14% Others, 403,199, 30% India, 147,030, 11% Indonesia, 89,900, 7% Thailand, 142,202, 11% Vistnam, 110,032, 8% Russia, 114,620, 9% Phillippines, 133,622, 10% (Unit: MT) Source: China Customs 19

21 Apple Import by Major Country (1-6) 2016 Apple Import Total Import 67,109 MT 4,002, 6% 2017 (1-6) Apple Import Total Import 44,286 MT 787, 2% 16,275, 24% 19,812, 30% 27,020, 40% 9,116, 20% 16,754, 38% 17,628, 40% USA NZ Chile Others USA NZ Chile Others (Unit: MT) Source: China Customs 20

22 Fuji Apple Wholesale Price Trend 2014~2017 Prices for 80mm (D) Fuji Apple (CNY/KG) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2014/ / /17 21

23 China Apple Industry Overview Apple Acreage showed decrease in 2016 first time in 20 years: Decrease mostly in some major growing areas but increase in other areas such as Ningxia, Sichuan, Xinjiang, etc. provinces. However, apple production has been increasing due to improvement in yield by adopting new technologies and better managment. Apple production growth has slowed down in the past 4 years to 3%+/- Fuji variety continues to be popular taking over 70% of total production. Fresh + processing apple prices have stayed lower in the past 2 years. Fresh apple export volume increased to over 1.3 MM MT in 2016 and stayed strong into 2017 although price has been dropping. However, Apple import volume has been minimal. More production in Organic and SOD apples 22

24 China Apple Industry Trend - Overview Apple acreage showed decrease first time in 2016: Decrease mostly in major growing areas as old trees were cut, but still increase in other areas like Ningxia, Xinjiang, Sichuan etc. for the last 3-5 years. Thank you! Apple production growth has slowed down in the past several years: 3%+/- from Fuji variety continues to be popular: >70% SDIC Zhonglu Fruit Juice Co., Ltd. Fresh apple price has been staying low in the past 2 years, so has processing apple Zhonglu prices. America Corporation Fresh Apple Export increased to over 1.3MM MT and stays strong in to However, fresh apple import is minimal <100K MT More production in organic and SOD apples 23

25 2017 China Apple Juice Concentrate SDIC Zhonglu Fruit Juice Company Zhonglu America Corporation Michael Choi

26 2016 AJC Production by Province Henan, 22,902, 4% Liaoning, 32,537, 6% Ningxia, 32,875, 6% Gansu, 33,127, 6% 2016/2017 Production: 558,000 MT Others, 29,442, 5% Shandong, 73,104, 13% Shaanxi, 209,180, 38% Shanxi, 124,833, 22% Shaanxi Shanxi Shandong Gansu Ningxia Liaoning Henan Others (Source: China Chamber of Commerce - AJC) 25

27 2013/4~2016/7 AJC Production by Major Provinces 700, , , , , , ,000 0 (Unit: MT) 600, , , , , , , , ,950 83,598 89, , ,833 55,056 52,404 67,313 73, / / / / /18 E Total Shaanxi Shanxi Shandong Linear (Total) Linear (Shaanxi) Linear (Shandong) (Source: China Chamber of Commerce - AJC) 26

28 CY 2016 Apple Utilization 10-Year Utilization for Apple JC 2016 Production + Import 43,949K MT 2,500, 6% 3,906, 9% 36,043, 82% 1,500, 3% Used for Apple Juice Concentrate 8.9% 8.1% 7.2% 8.9% 13.5% 12.2% 12.1% 14.4% 18.9% Fresh Consumption AJC Processing % Other Processing Export 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 27

29 Aple JC Export (1-6) Country 2017 (1-6) 2016 (1-6) '17 : 16 (1-6) : 2015 USA 144, , % 256, , % Canada 15,797 14, % 24,262 23, % Japan 23,333 28, % 49,237 60, % Australia 12,679 11, % 23,814 25, % Russia 24,603 24, % 50,700 35, % Ukraine % % Germany 4,189 3, % 7,121 16, % Holland 2,607 2, % 3,290 4, % S. Africa 17,869 15, % 37,957 16, % Others 29,238 28, % 53,045 51, % Total 274, , % 506, , % (Unit: MT) Source: China Customs 28

30 Apple JC Export: Volume & Unit Price 2003 ~ ,200 Supply<Demand Qty, Price Increase Big inventory Price fell High AJC cost High price Competition from Europe $2,500 1, $ $884 $668 $ $1,194 1,043 $1, $814 $ $1,922 $1, $1,502 $1,389 $1,182 $1,077 $ $2,000 $1,500 $1,000 $ (1-6) $0 Qty: 1,000 MT Price: $/MT Source: China Ministry of Agriculture 29

31 Processing Apple Price Trend (2013~2016) In Western Provinces Aug Aug Sept Oct Nov Dec Mar Apr (Unit: CNY/MT) 30

32 Apple JC Production Cost Increasing, New Challenges Chinese Yuan vs US$ - Appreciation Other Cost Increasing Factors Stricter Environmental Protection Policy for cleaner water, air, soil: AJC plants needed to upgrade waste water recycling equipment, improve waste treatment system >> forced some small plants to close, increased AJC production cost with higher cost of energy, packaging material, coal, etc. Interest rates rising Ocean freight fluctuating to higher level 31

33 China Apple Industry Trend - Overview Apple acreage showed decrease first time in 2016: Decrease mostly in major growing areas as old trees were cut, but still increase in other areas like Ningxia, Xinjiang, Sichuan etc. for the last 3-5 years. Thank you! Apple production growth has slowed down in the past several years: 3%+/- from Fuji variety continues to be popular: >70% SDIC Zhonglu Fruit Juice Co., Ltd. Fresh apple price has been staying low in the past 2 years, so has processing apple Zhonglu prices. America Corporation Fresh Apple Export increased to over 1.3MM MT and stays strong in to However, fresh apple import is minimal <100K MT More production in organic and SOD apples 32