Recent Developments in the Serbian Apple Market

Fresh apples are one of the most important agricultural products in Serbian agriculture. The most grown varieties are Gala, Braeburn, Golden Delicious, Red Delicious, Granny Smith, Fuji, Jonagold, and Idared. Since 2017, Serbian fresh apple production has seen steady growth. Production in 2017 was 378 thousand mt growing 17% the next year to 460 thousand mt. It didn’t stop there, higher acreage planted, modern agro-technology use and high yield over the years meant production grew to 499 thousand mt in 2019, before falling marginally to 489 thousand mt in 2020. For the 2021 crop year, production was approximately 510 thousand mt. Although there was frost damage in April and a dry and hot period at the end of August, which damaged crop quality and size, it didn't affect the overall production. That meant production in 2021 had increased 4.6% YoY from 489 thousand mt in 2020.

Traditionally most of the exports of fresh apples from Serbia went to Russia. From 2015 to 2021 over 1 million mt of apples went from Serbia to Russia. In spite of that, exports in 2018 went down 25% YoY from 166 thousand mt from the previous year. In 2019, exports to Russia recovered to 161 thousand mt. Again in 2020, we saw that negative trend continue. Export to Russia was at 131 thousand mt, an 18% YoY fall. The current political situation between Russia-Ukraine is also causing issues for exporters. When the conflict started, trucks hauling apples were held at the border, taking longer routes via Belarus, impacting logistics costs and the quality of apples.

In addition, the conflict is causing a devaluation of the Ruble which has lost over 30% of its value against the USD. This is making it difficult for Russian importers to settle payments for already delivered apples. The potential loss of Russian exports is making Serbian exporters/marketers look for alternative markets. UAE, UK, India, and China are prospective markets with huge apple consumption behaviors that the Serbian market could try and export to. Over the past 5 years, from 2017 to 2021, the total quantity of exported apples to UAE, UK, and India was just 31 thousand mt, not nearly enough to replace the Russian market.

The outlook for season 2022 regarding apple production and export in Serbia depends on various factors. Costs of fertilizers have more than doubled, compared to MY 2020, also gas prices have gone up by 30%, from USD 1.26 on W1 of February MY 2020 to USD 1.64 on W1 of March MY 2022, which pushed the authorities to freeze prices of gas and offer farmers fertilizers from commodity reserves. Along with pesticide costs rising, this will affect growers, squeezing their profit margins. Exporting companies will struggle to change their business model, concentrating their effort on increasing export volumes with lower wholesale prices.