Note: All references to the EU include the United Kingdom.

We recently questioned whether the EU would be able to capitalise on China’s reduced apple production in 2020.
The short answer is no, as China will produce 40m tonnes of apple in 2020, down 2.4m tonnes year-on-year.
This smaller-than-expected production drop means it will still be able to meet a satisfy portion of global demand.

Frost Slightly Reduces China’s Apple Production

We recently aired our concerns that China could suffer a 10-15% production loss next season as frosty conditions hit during the peak of its growing season.
As it happens, the impact of the frost has been less severe than we first thought, with China only set to endure a 6% production decrease year-on-year (YoY).

Despite this loss, China remains the world’s largest apple producers, ahead of the EU, which is set to produce 10.7m tonnes of apple in 2020.

In 2019, the largest proportion of apple came from China’s Shaanxi province; this will have likely remained the case this season.

Consumer Demand Quietened Down in Lockdown

Although production looks as though it’ll turn out better than expected, the price of fresh apple in China dropped significantly this year.
This is likely a knock-on effect of COVID-19, which caused demand for Apple Juice Concentrate (AJC) to slow significantly as buyers deferred shipments in response to weak consumer demand during lockdown.
Despite this, next season’s demand could still be larger than that of 2019/20, where it totalled 530k tonnes.
We think it could soar as high as 560k tonnes and come from North America (230-250k tonnes), the EU (150-170k tonnes), China (75-85k tonnes) and Japan (45-50k tonnes).

However, this shouldn’t cause too many immediate problems for China as it’s still cheaper for the US to import Chinese apples (with 25% duty) than it is for them to import EU apples (with no duty).
Therefore, provided there are no last-minute catastrophes, China will remain the US’ dominant supplier, forcing the EU to carry more of its apples into 2021/22.