W47: Weekly Apple Update
Europe
What Is the Current Situation on the Apple Market in Europe?
During Interpoma, Philippe Binard from the World Apple and Pear Association (WAPA) presented an overview of the situation on the apple market in Europe. The estimated total EU harvest is 12,201,000 tonnes: Poland is the leading producing country with 4,750,000 tonnes (23.02%), above last season's level, followed by Italy with 2,054,000 tonnes (0.51%) and France with 1,391,000 tonnes (21.48%).
Italy
Production Based on Region and Variety for the 2022 Italian Apple Season
Italian apple production in the 2022 season is approximately 2 MMT, matching the production levels from 2021. In terms of production regions, compared to 2021, the Friuli Venezia Giulia and Lombardy regions lost about 18% and 15% of their production volume, respectively. The Alto Adige and Trentino regions lost about 10% of their production volumes due to the drought that occurred in summer 2022. On the contrary, a large harvest volume was recorded in the Piedmont region, which produces the most apples after the Trentino and the Alto Adige. In addition, at a varietal level, the volumes of the Golden Delicious and Gala dropped, as Egypt, the main export market for these varieties, reduced its imports due to the mandatory payment system imposed by the Egyptian government. As for Red Delicious, Granny Smith, and Cripps Pink, production increased in Italy for the 2022 season.
The pear and apple contact group of France, Italy, Spain and Portugal, made up of sectoral representatives from the four countries and heads of the respective administrations, met on Friday in Bolzano, Italy, and addressed some of the main problems that concern the sector, such as the rise in costs or the proposal for a Regulation on the sustainable use of phytosanitary products. The meeting confirmed the strong impact that the increase in all production costs is having on all community farms. In Spain, the FEPEX Pepita Fruit Committee evaluated, last March, the rise in apple production costs by 40%, due to the increase in labour and, above all, because of the increase in the price of energy that had an impact on the handling process, purchase of packaging, conservation and transport, increasing costs both in the field and in the fruit and vegetable plants. The contact group also addressed one of the problems that concern pome fruit producers in Europe and the community fruit and vegetable sector in general, and that is the proposed Regulation for the sustainable use of phytosanitary products. Presented by the European Commission last June, the proposed Regulation provides for a 50% reduction in the use of pesticides by 2030 and a 20% reduction in the use of fertilisers, without it being evaluated comprehensive analysis of the consequences on the community productive fabric.
Italian Apples Are Recovering, but the Countryside Is Difficult
The 2022/23 commercial campaign for Italian apples promises to be anything but simple. This is stated by the Ismea November 2022 focus, which raises the price increases as the first critical issue. The increase in the price of energy products puts a strain on the economic sustainability of the activities of the POs and other companies that preserve, condition and package fruit. The second disturbing element is logistics, and more generally trade between Italy and non-EU countries due to the Russian-Ukrainian conflict. Furthermore, it is necessary to deal with the weakness of the euro against the US dollar. Although, according to Ismea, it will be necessary to verify the effect of the very strong inflationary push at the end of the campaign, it must be said that the fruit appears absolutely stable and well positioned in the food basket. In the first two months of the 2022-23 commercial campaign, retail purchases of packaged apples recorded an increase in volume (+6.9%) accompanied by a decrease in the average price (-4.1%). The sale of organic apples was particularly positive: +11.2% in volume. In Italy, however, the 2022 production is estimated at just over two million tons, an increase of 26,500 compared to 2021 (+1.3%), but this figure will be confirmed when the late varieties are also harvested. At the regional level, the Provinces of Bolzano (-5.8%) and Trento (-4.3%) lose, while in Veneto, Friuli-Venezia Giulia, Lombardy, Piedmont and Emilia-Romagna there are considerable increases in the harvest. Half of the harvest consists of Golden delicious (32%) and Gala (18%), followed by Red delicious (10%), Fuji (7%), Granny Smith (7%), Cripps Pink (5%), Pinova and Evelina (2%). Other new varieties make up 9% of the total offer. Organic production is estimated at around 195,000 tonnes or 9.4% of total production.
Apples, Imports and Domestic Production Grow With Average Prices Down
Last summer's drought did not compromise apple production. Forecasts promise a harvest of 2.1 million tons, according to Ismea, an increase of 26,500 tons compared to 2021 (+1.3%) and 3.8% less than the 2018-2020 average. However, the weather affected the calibres and colouring. The decreases of around 5% in the provinces of Trento and Bolzano, which alone represent half of the cultivated area and 65% of the fruit harvested, attributable to a process of modification of the cultivated varieties, were more than compensated by the other regions of the North. It is difficult to predict whether Italian apples will find space abroad, where an average of 40% of the product goes (13% goes to juices and the rest is domestic consumption) making Italy the second largest exporter in the world. Apples are certainly a product that will continue to play a central role in the fruit purchases of European families.
Chile
Chilean Apple Growers Remain Skeptical of Season 2023 Due to the Continued Increase of Freight Rates
Sea freight cost increases seen in last years have hardly affected exports of apples from Chile due to the reduction of the margins of the business making some of them nonprofitable. Some growers remain skeptical regarding season 2023 due to the continued increase of rates and the potential lack of volume to be exported. In 2022, some growers moved their crops to only focus on the Latam market or left their fruit for the juice business avoiding the risk of export.
Poland
The purchase prices of apples for mousses and purees are increasing
Increased demand for industrial apples from the selected varieties in a short time led to rise in purchase prices. Will the price for "dry industry" be significantly higher in the coming weeks? The prices of Golden Delicious and Champion have slightly increased. These varieties are mainly used to produce juices, but also mousses and purees. Some time ago, their prices were only a few pennies higher than the ordinary industrial apples. In recent days, there are more offers at the level of PLN 0.50 / kg. Both in the case of Golden and Champion, prices are still far from satisfactory, but the increases always please fruit growers. Still, not all recipients offer so much. Nevertheless, the topic is interesting, because the prices of "industry" at the purchases still do not change. However, when it comes to "dry industry", today at the sample collection points, the difference is only 2-3 groszy per kilogram. Undoubtedly, it does not encourage diversification of sales from the point of view of the grower. It is possible that after the observed winter episode, a decrease in the supply of higher quality raw material will lead to further price increases.
Last week’s prices for apples were quite actively reviewed both in the Western monitoring countries and in Central Asia, then by the end of the current reporting period, these fruits continued to rise in price only in Poland. It should be noted that Polish farmers managed to raise prices for both the least popular Idared variety and Golden Delicious apples, which were in higher demand among domestic market operators and exporters. By the end of the week, Idared apples were offered in Poland at $0.19/kg, and Golden Delicious apples at $0.29/kg. The market operators themselves attributed the rise in prices to the traditional slight reduction in the supply of apples due to more stable sales from storage facilities and the appearance of larger calibres in the proposed batches. The situation on the apple market in other countries this week remained stable, with the exception of a slight drop in prices in Georgia. On the Georgian market, both varieties fell by 5% to $0.63/kg against the backdrop of still inactive exports and a slight increase in the supply of apples on the domestic market.
Belgium
About 15% Of Apples Are Not Harvested
Fruit growers in Belgium have left about 15% of their apples hanging on the tree due to low yield prices and high costs. The apple harvest this season was better than expected. There were 9% more apples than in previous years and they were also of very good quality. But for the fruit growers this season it was a lot more difficult and more expensive to harvest and sell those apples. The Association of Belgian Horticultural Cooperatives expected 220,000 tons of Belgian apples this year, but that turned out to be 240,000 tons. The quality was also excellent. However, the prices are low. There's a lot of competition which may be due to the war in Ukraine. Countries that used to supply Russia now have to look for sales elsewhere. For fruit growers, the prices of fertilisers and energy have risen enormously. The costs for harvesting and storing apples are disproportionate to the selling prices. As a result, stocks at growers are 20% lower than normal. Some of the apples were not picked or immediately taken to processing.
Good Sales of Pears but a Difficult Situation on the Apple Market
"While pear sales paint quite a positive picture, sentiment in the apple market is heading in the opposite direction. This market is a disaster. We still have customers for Belgian Gala and Evelina apples. These sell well, but the other varieties are hard to come by,' Dominiek explains.
Moldova
The emergency power outage in Moldova, which became a “side effect” of the Russian attack on the energy infrastructure of Ukraine, was not long enough to cause significant damage to fruit products in fruit storage facilities. In many regions of the country, the blackout lasted a matter of hours. According to representatives of fruit growing associations, shutting down refrigerators for up to a day does not break the "cold chain", especially when the average daily atmospheric temperature approaches zero. At the same time, farmers note that, in anticipation of possible interruptions in the centralised energy supply, as well as a potential increase in electricity tariffs in an unpredictable amount, many fruit storage owners purchased diesel power generators last and this year. However, this does not mean that the regional energy crisis, intensified due to the war in Ukraine, has little effect on the agricultural storage sector in Moldova. According to specialists from fruit growers' associations, the actual loss of CIS markets, as well as fears of interruptions in centralized power supply, predetermined the fact that farmers stored about half as much fruit and grapes as last year. According to expert estimates, by the end of November less than 100,000 tons of apples, less than 10,000 tons of grapes and no more than 1-2,000 tons of plums will remain in fruit storages in Moldova.
Brazil
National Supply of Apple Is Lower Than Demand
With part of the finished national stocks, the apple supply is lower than the requests. Thus, the merchandise that the sellers made available for sale was liquidated in the classification regions this week (21 to 25/11), even with the end of the month, which guaranteed stability and even a price increase for some profiles. The Fuji 110 Cat 1 was sold at BRL 122/box of 18 kg in the average of the classifying regions, a slight increase of 1% compared to last week. According to agents consulted by Hortifruti/Cepea, with the completion of stocks, some classifiers are offering only fuji. In addition, the price of small and large fruit came closer, with more consumer preference for larger calibres. For the coming weeks, agents expect that the low stock will continue to guarantee good quotations.
Czech Republic
Polish apples are flooding the market and spoiling trade
Due to low prices and unprofitable cultivation, Czech fruit growers plan to cut down orchards further. According to Ludvík, Polish apples, which used to go mainly to the East, remain on the European market, which is used by retail chains to exert price pressure. With an annual harvest of around 4.5 million tons, Poland is the largest producer of apples in Europe. The Czech harvest is expected to exceed 130,000 tonnes this year. He adds that the retail chains are not willing to pay fruit growers prices that cover the increased production costs when there is a surplus of apples on the market. "It's a vicious circle that nobody wants to solve," said Ludvík. He pointed out that there is no single European market in the area of apples, because according to the findings of the Fruit Union, Western European countries will not allow Polish apples to enter their markets. This year, apple producers received state support of 100 million crowns, which translates into less than 18,000 crowns per hectare for applicants. According to Ludvík, this compensation was for increased storage costs from the 2021 harvest and does not solve the current problems of the sector.
Georgia
Apple Exports Continue to Lag, but Wholesale Prices Are Not Falling Yet
This year, the country harvested a record high harvest, about 130,000 tons of apples, which is about 80% more than in the previous season. Interestingly, prices on the Georgian wholesale market are still at a high level, but a survey of market participants shows that downward pressure may increase in the near future. According to official statistics, Georgia exported 840 tons of apples in October 2022, which is 14% less than a year earlier. The value of exports also fell from $630,000 in October 2021 to $550,000 in 2022. 100% of exported apples were supplied to Russia. The main reason for the decline in apple exports is the weakening of demand from the northern neighbour. The latter, of course, is connected with the unjust war against Ukraine. Many Russian citizens have resettled in Georgia, which has increased local demand to some extent, but this is unlikely to be enough. Farmers reported that, while traders' prices may not have been affected, their prices have declined YoY. Georgian farmers sell apples for 0.80-1.30 lari/kg (about $0.30-0.50). Prices vary by calibre and are lowest when mixing different calibres.
Russia
Apple Harvest in Stavropol Increased by 1.5 Times in 2022
Gardeners in the Stavropol region harvested more than 74,000 tons of apples in 2022, which is 1.5 times more than last year. This was reported to journalists on Monday in the press service of the Ministry of Agriculture of the region. "The horticultural farms of the Stavropol Territory have completely completed harvesting apples. Today, 50 farms in 19 districts are engaged in growing fruit crops. This year, 74.1 thousand tons were harvested from an area of 3.5 thousand hectares, which is one and a half times more than last year" , the message says. It is noted that about 60% of the apple harvest is stored annually for sale in the off-season. “Therefore, one of the main priorities identified by the governor is the construction of new fruit storage facilities. Since the beginning of the year, two such facilities have been put into operation in the Budennovsky and Georgievsky districts, capacities have been increased in the Izobilnensky district. Today, the total capacity of fruit storage facilities in the region is 50,000 tons,” she said. Elena Tambovtseva, First Deputy Minister of Agriculture of the Stavropol Territory, whose words are quoted in the message.
South Korea
Chungju City Reports the Status of Apple and Pear Cultivation
Chungju City, Chungcheongbuk-do announced on the 22nd that it would implement an apple and pear cultivation notification system to prevent fruit burn disease. Accordingly, the relevant farmhouse must report the orchard lot number, area, cultivated crops, planting year, and more to the Eup, Myeon, or Dong Administrative Welfare Center by the 16th of next month. This is in accordance with the administrative order for preventive measures against fruit water burn disease issued in January of this year. Failure to do so will result in disadvantages such as exclusion from various support projects and reduction in compensation for losses from fruit burn disease. Through the reporting system, the city explained that it plans to accurately identify the establishment and closure of new orchards, the current status of apple and pear cultivation, and respond quickly in case of fruit burn disease. This year, along with the declaration of cultivation, whether or not to apply for a support project to prevent the spread of fruit burn disease will be additionally investigated, and orchard environment improvement agents and disinfection products will be provided. An official from the city's Agricultural Technology Center said, "The fruit tree burn disease administrative order is something that all apple and pear farmers must practice."
Colombia
The European Apple Import Season Is Extended Until ETA W4 2023
In W47, Colombian fruit importers are extending their apple programs with Europe until an estimated time of arrival in W4 2023 as they are projecting Chile's early apple season to be delayed, taking into consideration Chile is the main supplier of apples of Colombia.
Bulgaria
Apple Growers’ Season Results in Numbers
Harvesting of perennial crops is nearing its end. The data of the Ministry of Agriculture show that out of 4,339 ha with apple orchards, about 4,254 ha were harvested, and about 10% less apples were produced. The average yield per hectare has fallen by more than 5% to 1,094 kg, experts note.
