This apple product from China might come as a surprise
China grows eight times as many apples as the U.S., and supplies most of the concentrate used to make apple juice here. But as more Chinese can afford fresh apples, concentrate prices are soaring.
A lot of things come to mind when you think about China. Apples probably aren't one of them. But maybe they should be. China grows about eight times as many apples as the U.S. And they're pretty commonly used to make the apple juice we slurp down, says Carol Freysinger, executive director of the Juice Products Association.
So, why Chinese apple juice instead of juice from Washington or Michigan or New York? “Most of the apples grown in the United States are grown for the fresh market,” Freysinger says. “People like to eat fresh apples.”
We’re not the only ones. As Chinese consumers get wealthier, they are buying more fresh apples -- which has pushed up the price. “The fresh marketers are able to bid much higher prices now for their raw materials,” says Desmond O'Rourke, a fruit market analyst and head of Belrose, Inc.
More people eating more fresh apples also means fewer apples for juice. Which, O’Rourke says, means higher juice prices, “five or six years ago the average ton of apple juice leaving China was selling for $300 a ton, now it's selling for $1,000 a ton.”
Hello, higher juice prices at the grocery store.
With prices jumps like that, you know traders are going to want in on the action. In August, the Minneapolis grain exchange launched an Apple Juice Concentrate futures contract -- giving real apple investors something to sink their teeth into.