Chinese strawberry prices soar to $25 a kilo

Are strawberries really worth 10 times as much as coffee, or 100 times as much as wheat?

A triple whammy of higher labour costs, a switch by some farmers to mung beans, and the worst frost since the 1980s has sent China’s strawberry prices soaring to up to $25 a kilogramme – twice the price they can be bought for in the West.

China’s strawberry production in 2011, far from achieving the strong rise this year that had been forecast, will end up 10% lower than last year’s, at 1.26m tonnes, US Department of Agriculture attaches in Beijing said.

Sowings in some major producing areas, such as Hebei province, were lowered by a switch to "more profitable crops such as garlic, ginger and mung beans" after prices hit record highs, while what was sown faced the coldest weather since 1988 in northern China in March.

"Local processors in Shandong stated that heavy frost damaged the flowering season and yields for open-field production," the attaches said in a report.

‘Improved profitability’

Meanwhile, farmers’ costs have been raised by further increases to China’s minimum wage, with labour bills up 20% in the first half of 2011.

And growers, wholesalers and retailers have been able to pass on all these costs and more thanks to demand for the fruit whetted by its popularity both in processed form, in jam, jelly and confectionery, and fresh, with strawberries a popular gift in China.

"Fresh strawberries are very popular with Chinese consumers, given their sweet taste, red colour and early availability in the season," the attaches said.

And, with fears over food safety prevalent in China, stoked by periodic scandals, consumers in suburbs of the major cities, such as Beijing and Shanghai, have been paying up to $25 a kilogramme for organic strawberries.

"Chinese packers reported that branding and new varieties have improved profitability," the report said.

In Tesco, the UK’s biggest retailer, organic strawberries were selling for £8.30 ($13.60) a kilogramme on Wednesday.

Exports hit

While Chinese consumers can buy strawberries more cheaply, even the price of conventional greenhouse strawberries has doubled over the past year, to 80 remninbi ($5.60) per kilogramme, at the farm gate.

The price of strawberries used for processing, while selling for a relatively modest 5 remninbi ($0.35) per kilogramme, has also doubled, hitting a record high.

The supply squeeze, and high prices, also look likely to cut China’s lead as the top exporter of frozen strawberries, ahead of Poland, which is far overtook last year with average prices 24% lower.

China’s shipments, popular in Germany, Japan, the Netherlands and Russia, are expected to slump by one-quarter to 95,000 tonnes in 2011.

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