China was struck by a prolonged heatwave between May and August last year, recording its highest temperatures and lowest rainfall in over six decades, according to government reports.
This affected widespread areas across the country, particularly in the south-eastern to south-western regions, with many agricultural areas suffering as a result.
One of the major crops that has been affected by the heatwave is kiwifruit, which has been seeing a major boom in local demand over the past few years due to its association with both health and premium trends – China kiwifruit consumption is the largest in the world at well over two million tonnes, which makes up over 50% of the market.
Such immense demand equals a need for higher volumes of production and yield by the local kiwifruit sector, particularly with China moving more and more towards increased domestic food security, but the heatwave has thrown up a major hurdle even for big players in the industry.
“China Shenshan faced a challenging year in 2022 because in addition to the impacts of the COVID-19 pandemic, we also faced a prolonged heatwave that exacerbated severe droughts in many parts of China,” China Shenshan Orchard CEO and Executive Director Hu Chao said.
“This greatly affected our kiwifruit yields and the volume of kiwifruit sold also dropped by 16.7% in 2022 as a result – which all together led to a 23.5% decrease in revenue for us over the 2022 financial year.
“We are however optimistic about a rebound in harvest volumes and sales as the drought subsides and China’s economy recovers from the impacts of the pandemic.”
China Shenshan is one of the country’s major kiwifruit producers with some 6.5 million square feet of orchards dedicated to the fruit, claimed to be one of the largest in China.
The firm saw a drop of over 50% in profits last year, but still managed to stay in the green despite these impacts - according to its financial results release, this was possible largely due to government aid.
“Unconditional grants from government-related agencies in support of agricultural activities in China saw income increase significantly to CNY8.1mn in 2022 from CNY400,000 the year before,” the report highlighted.
“The firm is also entitled to full exemption of enterprise income tax on profits from the kiwifruit business as a qualifying agricultural business.”
But whilst such assistance has served to tide over a large business like China Shenshan, challenges still loom large for smaller firms in the sector that are not of the size or do not have the knowledge to obtain such government aid.
Some localities such as Shaanxi, which is the largest kiwifruit production region in China, saw temperatures of up to 50°C daily, resulting in what local farmers described as ‘severe sunburn’ for the fruits.
“High temperatures are fatal for kiwifruits as these will ripen and spoil too early, so production volumes have decreased a lot due to the heat – conditions [such as this heatwave] are simply horrible,” a spokesman for local firm Yanan Fruits told local media.
Turning to technology
Despite these setbacks, China Shenshan still looks to achieve significant growth moving forward, particularly in terms of the premium market.
“We hold 83 trademarks and 56 patents [related to] the kiwifruit sector, including the Fairy Gold and Jade Green kiwifruit variants,” Hu told us.
“Similarly, we firmly believe that constant innovation and openness to technology are key to success [and] enhancing profitability.
“In 2021, we established our in-house R&D Centre so as to conduct in-depth research into the sector [and there is clear scope] to develop varieties that are not only more sustainable and environmentally but also resistant to environmental factors [especially given the current circumstances].”