Fruit for thought

Rapidly rising in price

For a brief period in the mid-sixties the mango was an object of reverence in China.

It was the start of the Cultural Revolution and groups of angry students were tearing the country apart. Mao Zedong ordered a unit of Beijing workers to storm Tsinghua University and overpower the student Red Guards there. Afterwards he sent a case of mangos – gifted to him by the Pakistani foreign minister – to the workers (Mao himself didn’t like fruit).

Not many in northern China had seen the fruit at the time. The 40 or so mangos were dispatched to work units around the country. Some were injected with formaldehyde to extend their lives, or replaced with wax replicas. When the revered mangos began to rot, some were boiled to produce “holy water”. Processions were organised, poems were written and the fruit was celebrated as the embodiment of Mao himself.

Today, of course, mangos aren’t such a rarity in China. The country is now the world’s largest fruit producer, growing everything from blueberries to kumquats.

But that doesn’t mean fruit isn’t politically significant. A term currently trending on social media is “fruit freedom” – the ability to buy as much fruit as you want without having to think about the cost.

It has become a buzzword in recent months as the price of fruits from apples to watermelons has risen dramatically.

The general manager at Xinfadi, one of Beijing’s largest agricultural wholesale markets, told the Economic Observer that average fruit prices were up 78% this year, with the sharpest rise happening in the last two months. At another market in Beijing’s southern Daxing district, people told WiC they were cutting back on fruit purchases because of the price increases. “I only buy fruit for my one year-old now, my husband and I can go without,” said one young mother.

Apples now sell in Beijing supermarkets for about Rmb28 ($4.05) a kilo, compared to about Rmb14 last year; oranges have gone up from Rmb7 to Rmb12 per half kilo; mangos from Rmb10 to Rmb15 per half kilo; and a kiwi from Rmb5 to Rmb8. Pears rose from Rmb12 per kilo to Rmb26.

It would be tempting to blame the increases on the trade war with the US but China doesn’t actually import much fruit from America. Instead the reasons appear to be largely domestic, with most pointing to late frosts last year which killed a lot of fruit blossoms. One fruit farmer from Shaanxi told the Economic Observer he lost 50% of his crop to the cold snap.

Supplies held out until this spring but as the weather started to get warm in April, demand for fruit surged, leading to shortages.

The downbeat public mood was not helped when the China Nutrition Society put out a report this month pointing out Chinese consumption of fruit and vegetables was too low and that people should aim to eat 250 grams of fruit a day.

In response Chinese Premier Li Keqiang was dispatched to Shandong – one of the nation’s largest apple-growing regions – to show his concern. A clip of Li cradling a pear shows him telling local officials to ensure an adequate supply of “daily necessities” at reasonable prices.

Various experts have said that they expect prices to return to normal by mid to late summer when the local harvest starts to reach shops. But others aren’t so sure. They point to the rising cost of labour and the fact that the agricultural workforce is often old and inefficient. In addition consumer demand is growing. People are eating more fruit and they want a uniform and consistent quality.

Vendors in Beijing say they face another pressure – higher storage prices since the demolition of many edge-of-town warehouses last year as part of a population control plan in the capital.

“High prices are good for no one,” said one stall holder at Xinfadi. “People buy less and I can’t make a profit.”

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.