Economy

Apple prices surge pleases growers, angers consumers

(Xinhua)
Updated: 2010-11-01 10:37

According to Dong, Guanshui township raked in 700 million yuan in fruit farming last year.

Apple dealers from across the country have also taken steps to replenish their inventories.

Xu Hu, an official in charge of administration for the Guanshui wholesale market for fruits and vegetables in Muping of Yantai, noticed that twice the number of apple dealers traded apples at the market in September and October compared to the two months one year earlier, accordingly.

In fact, the volume of daily apple transactions has been exceeding 200,000 tons, Xu said.

Angry urban consumers believe hot money speculation is again to be blamed, just as what had happened earlier with garlic, mung bean and ginger.

The online survey launched by Sina.com.cn showed, 34 percent of the respondents attribute the price hikes to hot money speculation.

The nation's agricultural commodities markets experienced one bull run after another this year, which were widely reported as being caused by hot money speculation.

But experts said the chance of speculation in apple pricing is slim, and attributed tight supplies, caused by extreme weather this year in major apple growing areas, as the main reason for the price increases.

Other factors include the increase in farming costs and a general rise in prices of consumer goods, according to experts.

"Currently, there is no evidence proving that large amounts of hot money have tapped into the apple market. Speculating on apples needs substantial capital and brings with it large risks, because China's apple output is huge and the producing areas are scattered," said Zhao Peice, the head of the Apple-Based Business Association of Yantai, adding that the recent apple price jumps are driven by supply shortages.

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Yang Jie, a professor at China's Apple Project Technology Research Center, echoed what Zhao had said, noting that continuous chilly weather this spring, together with frost damage and a hailstone disaster, caused a fall in apple output in the nation's production areas, including Shaanxi, Shanxi, Henan, Hebei and Liaoning provinces, and in turn pushed up prices.

Besides added costs in cold storage and transportation, the prices of apples are likely to climb to new highs during the next year before the harvest season comes, said Gong Jiabin, an apple dealer in Weihai.

China's consumer price index (CPI) reached a 23-month high of 3.6 percent in September. According to Sheng Laiyun, the spokesman for the National Bureau of Statistics, surging food prices caused by adverse natural conditions was the main reason for the accelerated CPI in September.

Feng Qunli, a researcher with the Shandong Academy of Social Science, said the nation's diminishing land resources and rising labor costs would lead to continuous prices hikes in agricultural products in the long run.

It is, however, conducive to increasing farmers' incomes and guaranteeing a sustainable and healthy development in agriculture, said Feng, who added that the government should also step up efforts to crack down on hoarding and speculation and to stabilize farm produce prices.