2017/2018 proves to be another tough season for mandarin oranges in China. Since the previous season was short, partially because the Chinese New Year started relatively early (January 28, 2017), and partially because of a short fruit crop, there was practically no carryover before the new season and buyers could hardly wait for the fresh production to begin.
If we thought that the situation could not be any worse than last year, we were wrong as this season seems to be quite a disaster. Raw material supply is short and a decrease in available labor in all packing areas, when compared to the previous year, forced factories to firm up their quotes to compensate for the decrease in production.
Packing mandarin orange segments is very labor intensive since every single fruit has to be peeled and segmented by hand and factories are unable to fill all shifts and all production lines with workers. It has been reported that the price of the raw material is still on the upward trend and offers for finished product, both retail and foodservice, are following the same path.
For this reason, many factories are reluctant to speculate and they only produce for firm orders that reflect the day’s raw material price and have prompt shipping dates. Even though Chinese New year is late this year (February 16, 2018), factories aren’t planning to pack mandarin oranges until that date like they used to because of the above reasons.
In addition, the Chinese currency (RMB or Yuan) has been steadily gaining value against the USD and reached its highest level since end 2015. The weak dollar, together with the higher cost of labor, sugar, tin plate and cardboard are all adding to the already firm market prices of canned mandarin oranges.