A shortage of processing apples has resulted in increased imports of Chinese apple juice concentrate into the United States. Tight supplies were reflected in sharp increases in domestic prices for processing apples. In mid-November, prices for juice apples in Washington State for 2007 orchard-run and off-line fruit were $140 to $160 per ton, while peeler apples were $150 to $180 per ton, according to the U.S. Department of Agriculture’s Apple Processing Report. Michigan processing apples were $7.50 to $8 per hundredweight.
Citing a shortage of juice apples in crop years 2006 and 2007, grower-owned cooperative Tree Top, Inc., headquartered in Selah, Washington, temporarily shut down its Cashmere, Washington, concentrate plant (see "Tree Top closes plant"). Tree Top supplies about 75 to 80 percent of the apple juice concentrate produced in the United States, and in normal years, sells concentrate not needed for co-op operations to other manufacturers.
Faced with short domestic supplies, U.S. companies increased imports of apple juice concentrate, and as of October, imports from China were up 94 percent compared with the same time in 2006, said Rob Kraly, a food industry analyst with the Food Institute Report, in Elmwood Park, New Jersey.
Tight supplies also resulted in increased prices for imported apple juice concentrate. Chinese imports were $9.50 to $10.50 per gallon, up from around $6 per gallon earlier in the year, and up sharply from as low as $4 per gallon just three years ago, Kraly said. European apple juice concentrate was priced at $15 per gallon, and concentrate produced in South America was sold out.
China’s top market
The weak U.S. dollar, and rising fuel and transportation costs, also contributed to the price increases.
Kraly estimated that 75 percent of the apple juice consumed in the United States is made with imported concentrate. China accounts for about 63 percent of total world exports. The United States is China’s top market, receiving an estimated 36 percent of China’s export volume. The volume of imports from China has risen significantly in the last decade, from about 77 million liters in 1997 to 809 million liters in 2006, according to the U.S. Department of Agriculture.
Agricultural economist Des O’Rourke, president of Belrose, Inc., Pullman, Washington, noted that import volumes were actually down last year, making the increase this year sharper. The 2006 imports from China totaled 809 million liters, down from 903 million liters in 2005, and 853 million liters in 2004.
China had a "reasonable" apple crop in 2006, O’Rourke said, but this year’s crop figures are unknown. Poland, a major apple juice concentrate producer, has a short crop this year, following on the heels of a very short crop in 2006. It comes down to supply and demand—as apple juice concentrate stocks are reduced, prices tend to rise, he said.
It appears that tight supplies will continue worldwide at least until next spring, when the Southern Hemisphere apple-producing countries begin to harvest, O’Rourke said. As in the United States, growers in other countries prefer to sell on the fresh market where returns are better, and that has reduced the supplies of processing fruit around the world.
China began exporting apple juice concentrate to the United States in the mid-1990s. In 2000, amid concerns about sharp increases in cheap imports, the U.S. Department of Commerce imposed antidumping duties on a handful of Chinese producers of nonfrozen apple juice concentrate. Duties ranged as high as 52 percent, said Jim Cranney, vice president of U.S. Apple Association, in Vienna, Virginia. China appealed, and about a half dozen companies received a zero duty rate; nine companies had very low rates, around 1.5 percent; and other companies received 52 percent duty rates, Cranney said.
The companies with the low rates increased their market share, which meant that the antidumping action, in the end, failed to provide much protection for U.S. concentrate producers, he said.
But China has an estimated 35 concentrate-producing companies operating 55 factories. Fourteen Chinese companies account for the vast majority of the U.S. imports, and it’s reasonable to conclude that the antidumping order has deterred other companies from entering and further disrupting the U.S. market, he added. It also limited the Chinese companies that can export to the United States and how they conduct business.
Low-priced imports forced U.S. concentrate producers out of business, –Cranney said. Six plants—three in Washington State, two in California, and one in Michigan—have closed since 2001. Tree Top and Naumes Concentrates, Inc., are the only remaining significant producers of domestic apple juice concentrate. Several other U.S. plants continue to produce concentrate but in relatively small quantities.
Peggy Steward is an agricultural writer based in Ellensburg, Washington.