Polish Apple Export Concerns: Logistical Disruptions Amidst Soaring Demand

Published 2024년 2월 1일

Poland, one of the world's largest apple producers, is encountering logistical issues as demand for its products grows. Attacks on commercial ships in the Suez Canal and the Gulf of Aden have disrupted transit from Europe to Asia, causing confusion and stress in markets such as the Middle East, India, and Far East. The COVID-19 pandemic has also hampered international transit, resulting in delays and impacting apple quality. Currency exchange rates primarily influence the profitability of apple exports, and a weak zloty may raise the demand for Polish apples on the international market. Despite these obstacles, the Polish apple industry remains resilient, with exporters looking for new markets and investing in cold storage facilities. Also, a recent decision of the Belarus Council of Ministers, expected to lift Poland's fresh apple restriction, allowing sales to Belarus between April 1 and July 31, 2024, might improve the situation for Polish traders at the end of the fresh apple export season.

Persistent Logistical Challenges Affecting the Poland Apple Trade

Poland, one of the world's largest apple producers, has faced severe hurdles in recent years. Despite this, the demand for Polish apples has increased dramatically, particularly in South America and other non-European countries in the past months. However, the increasing demand has been met with logistical delays, raising concerns among Polish apple exporters. Polish apple growers are experiencing substantial transportation interruptions from Europe to Asia due to persistent attacks on commercial ships in the Suez Canal and the Gulf of Aden. This has caused confusion, panic, and tension in the industry, notably in Middle East, India, and Far East markets.

The demand for apples is substantial at the moment, yet timely delivery is difficult. The main obstacles include longer travel times, increased costs, and a lack of carrier availability. The acquisition of high-quality apples with higher shelf-life requirements is also challenging. Logistics disruption is critical to the business since ships traveling around the Horn of Africa increase travel times, and departures from Europe are delayed owing to incoming vessels.

Traders have been facing constant logistical disruptions since the start of the COVID-19 pandemic, which has particularly disrupted international transportation, leading to an imbalance in the movement of goods. Ports are again congested with stranded containers, and there's a shortage of available ships to transfer commodities efficiently. Consequently, the timely fulfillment of orders, especially crucial for perishable items like apples, is experiencing considerable delays. As these apples remain in transit for extended periods, their quality diminishes, ultimately affecting the overall quality that reaches customers.

Figure 1. Total Export Value of Poland in 2022

Source: Tridge

Currency Fluctuations and Market Dynamics: Impact on Polish Apple Exporters

Besides transportation challenges, exporters are also concerned about the Polish zloty's shifting exchange rate against the euro and the dollar. The profitability of apple exports is highly dependent on the currency conversion rate. The Polish zloty has recently gained against the euro and the dollar, affecting fruit exports. While the appreciating zloty has made exports less appealing in some markets, it has been advantageous for purchasing machinery and production equipment from Western Europe. Experts foresee a depreciation of the zloty in 2024, which will favor apple exports in the coming months.

The 2023 Polish apple harvest exceeded 3.8 million metric tons (mmt), 9% lower than the previous year, which might push prices up in domestic and international markets. According to Tridge Data Analytics, the highest average unit price of Polish fresh apples was in Colombia (USD 1.12 per kilogram) and India (USD 0.80/kg). Still, regarding the export volume and value of fresh apples, the German market sits firmly at the top, with 37,424.43 mt and USD 16.49 million delivered in the first nine months of 2023, a slight YoY decrease in value, while conversely, analysis shows a 16.95% YoY decline in volume indicating a higher price in dollars terms.

Despite these problems, the Polish apple sector has remained resilient. Exporters seek new markets and invest in cold storage facilities to keep apples fresh during transit. In recent events, the Republic of Belarus Council of Ministers has amended Regulation No. 700, prolonging a ban on some items until the end of 2024, with limited exceptions. Notably, the restriction on fresh apples from Poland has been lifted, and they can now be sold to Belarus between April 1 and July 31, 2024. While the rising demand for Polish apples represents ample opportunities, logistical disruptions create a substantial obstacle. Tridge expects the Polish apple traders to focus more on the surrounding markets like Germany, Romania and Hungary, while also paying close attention to South America.