AJC-projection-report苹果浓缩汁规划报告英文版.doc

.AJC Projection Report for Season 2008-20091. Two messages tell the serious on-going downside of Chinese AJC business.A. A striking headline appears in the Food Weekly as following:China now certain to carry over massive AJC inventory into 2009Chinas inventory of unshipped AJC this season could be as high as 375,000 tonnes. It now looks certain that Chinas AJC exports this season will fall way below the 1.0 million tonnes exported last year.B. Conclusions from Conference by China Juice Councila. Reinforce management on AJC industry: stop cut-throat competition in terms of price-killing and playing wait and see games b. Push buyers to make performance guarantee to fulfill contract especially to the buyers from Russia and Eastern Europe who are breaking contracts with Chinese AJC manufacturers.c. Postpone AJC production start for new season 2008-2009, clearing AJC inventory at first.The above two incidences are indicating the present pessimistic situations of Chinese AJC trade. For the time being, the actual AJC inventory in China may be over 400,000 tons according to one preventative from a major player. Some major players like Haisheng, North Andry, Zhonglu and Tongda are keeping huge inventory of AJC made in season 2007, averagely 80,000 tons more. The main reason rests : A. the inflation in China and appreciation of RMB vs USd that led as final to AJC price increase; B. over excessive AJC supply. Chinese AJC for export was priced at USD 1400.00/MT at the end of season 2006-2007( increased from 1150 at the begging to 1400 at the end), but the price increased by 32% to USD1850/MT at the very early season 2007-2008 and then increased by 43% to USD 2000 for once in the early season 2007-2008. The sudden price increasing kept AJc users out of the door who have always been expecting to by at lower prices. And at the same time, because of Chinas inflation and RMB appreciation vs USD, all the Chinese players were forced to keep increasing prices to make up for their loss from depreciation of Us dollars, while, when all the Chinese players were playing wait-and-see game, to release pressure from price increase, foreign AJC users purchase very little volumes of AJC when they have to and were forced to change their beverage recipe to lower their AJC usage, even replacing AJC with other juice concentrates. As a result, huge AJC inventory took place.2. Additional measures China Juice Council took to face the serious AJc business situation. Apart from the above three measures CJC took to solve the AJC inventory problem, it will also restrict AJc production management to regulate well-built AJC trade in long run and to effect this, the ADMINISTRATIVE PROVISIONS ON APPLES FOR AJC ( FRUIT PUREES) MANUFACTURING was authorized by fruit juice experts and will be circulated to all the AJC manufacturers. With these provisions, more strict control will be applied to AJC production in terms of pesticide monitoring for apple cultivating, apple selecting, AJC testing methods, inspection regulations, AJC packaging & packing, warehousing & transportation, and detail administrant rules on monitoring industrial apples for AJC production. 3. Impacts on Great Lakes A. Export pressureHuge AJC inventory keeps us selling at better prices. Although 2008 is the low-yield year for apple, but with this huge AJC inventory on stock, there will still be more than 1 million tons of AJC to be exported in the year 2008-2009, almost the same to the year 2007-2008. Most players will have price-killing fights or play wait-and-see game once again. Great Lakes as a tiny player compared with the five giants, will face serious pressure. B. Apple buying may encounter barrier if the ADMINISTRATIVE PROVISIONS ON APPLES FOR AJC ( FRUIT PUREES) MANUFACTURING really takes effect. Because these provisions provide that the quality of apples for AJc production should be higher than it was before, our apple buying cost may be increased. More stringent regulations will give birth to cost lifting. 4. Measures taken to alleviate the impactsA. Take flexible sales policyIn stead of following the AJC giants, we make our own sales policy, not playing wait-and-see game with them. Sell as soon as possible as long as a certain profit is assured.