Demand For Chinese Apple Juice In Foreign And Domestic Market

The development of Chinese apple juice industry and the trend of apple juice export had periodicity and fluctuation, but also showed comparative advantage overall. The driving force of pulling the development of Chinese apple juice industry is coming from foreign market demand, especially America、Japan、Russia and European Union. Although Chinese apple juice has suffered from the financial crisis and fluctuation impacts in the main export market, and the import demand of apple juice in foreign market(America、Japan、Russia and European Union)had been declined sharply, this trend had reversed in America and Russia market until 2010. In America, per capita juice consumption has declined, fruit juice import demand reduced, meanwhile. Influenced by anti-dumping and other trade barriers (eg. strict quarantine agent), Chinese apple juice exporting to America market has becoming increasingly difficult; With Japan economic downturn, particularly the high level of tariff and rigorous Positive List System which have restricted the Japanese market import demand of apple juice; Influenced by natural conditions, Russian apple juice production has disadvantage, the apple juice consumption therefore depends on export market heavily, including China. Especially since 2000, Russian apple juice market presented a high speed of increasing, which have attracted a large number of countries to compete for the market share; In European Union, the fruit juice production and demand are different among those member countries, for example,Germany, Austria and other major fruit juice consumption courntries’demand are close to saturation, while other member countries grow rapidly. Thus, the import demand of apple juice is unstable in European Union.The above analysis shows the future of Chinese apple juice export market is not optimistic. Especially with the condition of domestic apple juice production cost continuing to rise, it’s difficult for Chinese apple juice to keep the advantage and to expand their market share. On the other hand, domestic juice market in China grows fast. Fruit juice consumption is doubled in every five years; many multinational corporations are attracted to entry the fruit juice market in China, such as the American Coca-Cola and the French Louis Dreyfus. Along with the growth of urban-rural residents’income and changing of the beverage demand structure, China will become a great potential market with rapid growth demand of juice beverage. Therefore, with the background of changing in the international and domestic market demand, it is urgent to rely on the theory research and empirical analysis to judge the demand characteristics and regulations of Chinese apple juice. It aims to give some important measures and advices to guide the Chinese apple juice rational development.Based on the related research achievements of references, this paper will study on the Chinese apple juice demand characteristics and regulations in foreign and domestic market, using the data from related database and the survey data of Chinese urban residents fruit juice consumption behavior, then forecast the influence of these trends on the development of Chinese apple juice industry in a long term.In foreign market, firstly ,this paper analyzes the main export markets’(America, Japan, Russia and the European Union) apple juice consumption market characteristics, which aims to grasp the characteristics of these markets’apple juice consumption demand characteristics and import barriers. Secondly, choosing appropriate import demand function form (General, CBS, Rotterdam, NBR, AIDS), which estimates the import demand elasticity of apple juice in main export market, determines the position of apple juice in juice import demand and substitution between different types of fruit juice. Thirdly, it analyses the demand of the main export market for different sources of apple juice. It explores the preferences of major export markets for different source of apple juice, and substitution among different sources of apple juice. Finally, it summarizes the above research results, in order to distinguish the main export markets consumption characteristics, import demand characteristics and trends.In domestic market, this paper analyzes the evolution and development characteristics of domestic beverage market, which aims to judge the juice market characteristics initially. Then, it researches on the main factors which effect consumer preference by factor analysis and Probit order choice model with the survey data. The statistic results showed that worrying about the quality and safety of fruit juice is the main reason for impeding consumers to buy juice beverage. This paper also analyzes the main factors which effect consumers’confidence with regard to the quality and safety of fruit juice, using the factor analysis and Logit model. The conclusions are listed as follows:1.The apple juice consumption in America is depending on import heavily, but this import demand is very sensitive to the price. The America apple juice import demand expenditure is elastic. In America fruit juice market, orange and pineapple juice have substitution effect to apple juice. Compare to Chinese apple juice, the consumer in American more prefer to Brazil and Argentina’s apple juice, meanwhile, Canada apple juice has strong substitute influence to Chinese. This indicates that Chinese apple juice exports to America not only influenced by the international market price fluctuation and the income volatility of U.S. consumer, but also by the substitute effects of apple juice from Brazil, Argentina, and Canada, as well as other fruit juice like orange and pineapple juice. 2.The consumption preference of orange and apple juice in Japan is slacking down. Japanese government sets high import barriers, including the high tariffs and serious quality inspection. The expenditure elasticity of Japanese import demand of apple juice is positive, but lack of flexibility. The Japanese market demand of import of apple juice doesn’t influence significantly by price. The expenditure elasticity of Japanese demand for Chinese apple juice is flexible, but has a trend of decline. The apple juice from other countries has no substitution influence to Chinese apple juice. Thus, within the active international division of labor and trade patterns in fruit juice, Japanese market is a mature and steady one. Although other countries’apple juice have no substitution influence to Chinese in Japan market, because of the high barriers, it is still very difficult for China to expand the Japanese market. And with the cost of Chinese apple juice export still rising, it is difficult to expand exporting to Japan market, the comparative advantage of Chinese apple juice in Japan market will tend to go down.3.Russian fruit juice market is at the stage of growth, with great potential of market and import demand. It will in turn increase the orange juice, pineapple juice and apple juice import if Russia increases fruit juice import spending. The price as a determining factor influences Russia apple juice import demand, meanwhile, the effect of cross-price among all kinds of fruit juice is significantly. The price change is the major induced factor which effects on the imported expenditure structure and import juice structure of Russian juice, thus, the price competition in the Russian market is particularly fierce. The expenditure of Russian market for each main apple juice supplier is significant, and the Moldova is the biggest beneficiary. The expenditure elasticity of Russian apple juice import demand to China is 0.8966. China, Ukraine and Poland effected by their own-price elasticity significantly. Ukraine and Poland apple juice have substitution effect to Chinese apple juice. The future of Russian apple juice market demand is optimistic, but with strong competition. In that case, Chinese apple juice exports to Russian market will have comparative advantage and the scale and share of export to Russia market is expected to increase if Chinese apple juice export enterprises pay attention to controlling apple juice production costs and export prices, improving the quality standards, optimizing the apple juice marketing strategies.4.Orange juice import demand still in a dominant status in the European Union, there is no obviously increase rate on other type of fruit juice. European Union shows strong preference to Turkey and Ukraine apple juice import demand. The import demand elasticity of European Union is 0.8633 to China, while other countries’have no substitute influence to Chinese apple juice. So the European Union as a very mature market, the demand of apple juice import is stable. However, apple juice from China exporting to European Union is not optimistic because of the influence of European commission common agricultural policy. 5.The consumers’fruit juice consumption behaviors show that Chinese consumers generally prefer to fruit juice, so the market share of fruit juice will continue to expand. Advertising, price and convenience of fruit juice are the main factors which influence consumer preference. The higher education consumers receive, the more fruit juice they consume. When monthly income surpasses 2500RMB, the increasing income will weaken the consumer preference for fruit juice. The quality and safety problems of fruit juice are the most important reasons for impeding fruit juice consumption. Therefore, improving the quality and security situation of fruit juice and strengthening the consumers’confidence are the key steps to stimulate the development of China fruit juice market.Based on those conclusions, this paper proposes some recommendations, which aim to lead Chinese apple juice industry rational development. For example, expanding the developing countries’markets, especially the Russian and domestic market; implementing different export strategies; improving the quality of apple juice, breaking the quality trade barriers, enhancing consumer confidence; acquainting the competitors, etc.