- The increase of raw material price: The price of good quality raw material price increases from rmb 1.50-1.80 to rmb 4.50 last year. An increase of over 250%.
- Labour costs:Our salary for direct labour is around US$3.2 per day in 2004 and US$23.50per day in 2013. Another increase of 730%
- Evaluation of RMB (Unit for Chinese Currency) in 2004 the exchange rate is US$1.00 to rmb8.20. August the exchange rate is US$1.00 to rmb 6.10. An increase of 13.5%
- Inland transportation cost: The inland transportation has been double since 2004. The cost for us to bring container of apple from our plant to Qingdao port is around US$400.00 verses around US$200.00 in the year of 2004.
- Packing material:The packing materials such as cartons trays socks for the apple have almost double than 2004.
In summary, although we are selling at US$18.50 per 10kg and for size 44/larger and around US$36.00 for size 100-125, we are not making as much money when we have to sell the fruit at US$6.50 to US$7.50. The situation in China is getting worse and worse for the domestic suppliers. Prices Fuji apple export has reduced by as much as 50% in the last four years. Markets such as Russia, Vietnam, Cambodia, and the Philippines used to take a lot of Fuji apple from China due to the Chinese apple being very cheap. However, because of the high cost and high selling prices, import from China has decreased substantially.
Lower quality fruit flooded the domestic markets. Due to high raw material costs and the fact that the domestic selling price for apples is very high compared to other local fruits such as watermelons, peaches, pears; import from the US, New Zealand, Chile, Philippines and Thailand have become more attractive. Local markets are flooded with fruit from Thailand, Vietnam, New Zealand, South Africa and the USA.
In short, the days for the expensive fuji apple is over.
At Alfa Fruit Packers, we have invested almost US$500,000 to upgrade our packaging line, so we can pack a better and more consistent product for the coming years. We insist on high packaging standards and to offer our top quality Chinese Fuji apples to the top 5% of wealthy consumers in countries such as India, the Philippines, Indonesia, Thailand and Vietnam.
We are looking forward to meeting our existing customers at Fruit Logistica as well as potential customers who are looking for high quality apples from China.
For more information:
Steve Leung
Alfa Fruit Packers
[email protected]