Increased Stocks of Italian Apples and Export Difficulties Burden Traders and Producers

Published 2022년 5월 27일

According to data published by WAPA (World Apple and Pear Association), as of April 1st, 2022, apple stocks in Italy increased by 2.1% YoY to 619.6K mt. Also, according to the first estimates, the stocks in May were around 450K mt, 30K mt more than in the same period last year. Intense competition with Polish apples and payment difficulties regarding exports to Egypt are the main reasons for the increase in remaining stocks this year. Pressure on traders is growing as apple production is expected to increase in CY 2022. For the upcoming 2022/23 season, producers are expecting better apple quality as there was no frost damage.

Based on data by WAPA (World Apple and Pear Association), as of April 1st, 2022, Italian apple quantity increased by 2.1% YoY to 619.6K mt. In May, the apple stocks were at 450K mt, 30K mt more than in the same period last year. Given that Italy had lower yields in CY 2021 due to frost and rain during the spring of 2021, the stock increase is worrying because apple sales during this part of the season are slow. Production for CY 2021 was around 2.4M mt, a reduction of 4% YoY. As the production yield of apples in Italy is expected to increase in 2022 due to favorable weather conditions, the pressure on traders is growing every day.

Source: TradeMap

Regarding exports, Italy relies significantly on EU and Middle Eastern countries. Germany was the first in imported volume of Italian apples despite the export decreasing by 11.81% YoY to 236.6K mt in 2021. Exports to Egypt also reduced by 8.26% to 93.2K mt for MY 2021. One of the reasons is the robust competition. Polish apple exports to Egypt recorded an increase in quantities by 51.59% YoY to 154.18K mt in MY 2021, and exports to Germany increased by 38.36% YoY. Unlike Italy, which experienced frost damage, apple production in Poland increased by 8.75% YoY to almost 4M mt in 2021. Although Italy recorded a decrease in the export volume of apples to Germany and Egypt, apple exports to Spain partly compensated for the deficit with a 25.16% YoY increase in volume to 88.9K mt in 2021.

In Q1 2022, two critical situations affected the export of apples from Italy. The Belarusian embargo, which was in force until recently, redirected Poland's apples to the EU. Second, the Central Bank of Egypt has an obligation that all imports be processed under a Letter of Credit (LOC) from February 2022. Due to these measures, Egyptian importers were not able to pay for the delivered goods. Added to port congestions and higher shipping costs, the imports of Italian apples were strongly affected. Also, It is worth mentioning the decline in the consumption of fresh apples in the EU.

With the Belarus embargo lifted and Egypt's announcement of canceling the requirement regarding the LOC, the situation with the Italian apple export is expected to recover. Producers and traders are pleased with the excellent reception of red apple varieties, such as Red Delicious in India. The prognosis for CY 2022/23 is an increase in apple production due to favorable climate conditions in Italy. With the increased production costs, producers are focusing on apple quality, keeping in mind the apple stocks that have remained this year. Italian traders need to continue to diversify exports. There may be opportunities for Italian apple exports in countries such as India and the United Arab Emirates. India has proven to be a strategic country for Italian apple import, especially for some varieties and in cases when stocks are high. The UAE represents another option for exporting apples from Italy in terms of placing organic apples, branded, and generally apples with a higher price.