W48: Weekly Apple Update
Europe
The EU Exported More Apples and Imported Less Last Month
According to data from the same period last year, the European Union exported 11% more apples and imported 42% less. Analysing the relevant data, there is a clear increase in EU apple exports for October 2022. More than 117.2 thousand tons of apples left the Union, compared to last year's 105.4 thousand tons. There was also a change in relation to exports, as more than 24,000 tons of apples arrived in the EU in October 2021, and "only" 13,700 tons this year. According to analysts, this dynamic may continue in trade, which will have a positive effect on the rise in apple prices.
The EU Apple Market Can Breathe
Despite high energy prices, a cost increase of USD 10.53/100kg (10 euros) and the drought in Europe, a record harvest is making the life of apple growers very difficult. However, it is also true that the Belgian and Polish crops have not yet been processed, which, unlike many other countries, is lower than average. Although buyers are much more price-sensitive and buy fewer apples due to inflation, labour shortages and increased storage prices, according to analysts, sellers can enjoy a more stable market in February 2023. This may be the case mainly because of the Elstar and Gala varieties from Southern Europe. According to the experts, the apple harvest in the EU should be reduced by at least 1.5 tons in order for the apple orchards to operate economically in the future.
China
3K MT Chinese Aksu Fuji Apple Will Be Imported by Thailand in 2022
According to China's Customs Data, the country exported 93,898MT of apples worth USD 110M at an average price of roughly USD 1,173.59/MT in October 2022, an increase of 28.45% from September 2022. China's total fresh apple exports from January through October 2022 were 624,200MT, a decrease of 25.36% YoY due to COVID. Thailand will import 3K MT of Aksu Fuji apples in 2022 using multimodal combined cool transport by land and sea. Vietnam increased its imports of fresh apples from China in October 2022, bringing in 32,600MT, rising 68.37% from September 2022.
Italy
Fruit and Vegetable Price Trend
The price of apples remained stable, in line with the average for the period. The consumer is increasingly moving towards mountain productions, Trentino and Alto Adige in particular.
Chile
Chilean Apple Growers Remain Skeptical of Season 2023 Due to the Continued Increase of Freight Rates
Sea freight cost has continuously increased in recent years and has hardly affected exports of apples from Chile due to the reduction of the margins of the business making some of them non profitable. Some growers remain sceptical 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
WAPA Forecasts 4.75 Million Tons of Apples in 2022, but Not All Will Be Harvested
The latest WAPA forecasts show an increase in apple production in Europe. Although larger harvests apply to Poland, according to TRSK's forecasts, up to 10% of apples will not be taken. At the beginning of August in Belgrade, apple harvest forecasts for the 2022/23 season were presented. At that time, WAPA (according to TRSK) estimated the Polish harvest at 4,495,000 tons. In September, unlike most countries, the forecast for the country was not revised downwards. During the Interpoma 2022 fair in Bolzano, the latest data was presented by the president of WAPA, Dominik Woźniak indicating that the domestic harvest in Poland was estimated at 4,750,000 tonnes. This volume is 255,000 tonnes higher than the first August forecast. However, this does not mean that more Polish apples will go to cold stores.
Scarcity of Gala Apples in Poland in W47, Since Available Stocks Are Sold Out in Advance
There is a scarcity of Gala apples for sale in Poland, even though cold storage chambers are full. The Galas that are currently available have already been sold out in advance. As a result, growers and orchard owners are keeping the apples in cold chambers and not selling them, regardless of the price offered. This situation, however, is expected to improve in W48. The Polish apple market is dominated by apple producer groups, which are a cooperative of orchard owners who jointly co-own cold storages and packing houses. So, the cold storages and packing houses are run by a producer group, but the apples in the cold storage are the private property of cooperative co-owners.
Problems With the Export of Apples to Egypt
Complex banking and currency problems in Egypt significantly limit the export of Polish apples to the country. As known, this market is crucial from the point of view of domestic exports. The Embassy of the Republic of Poland in Cairo responds to the letter of the Union of Fruit Growers of the Republic of Poland on this matter. According to information from local exporters, imports of apples are practically non-existent because fresh fruit and vegetables (including apples) are on the list of products that cannot be imported into Egypt.
The Prices of Dessert Apples for Suppliers Have Increased Slightly
The pressure from fruit growers to increase the prices of dessert apples is clear and expected. The largest supermarket chain has raised the purchase prices of apples for its suppliers. Increases of 15 groszy per kilogram apply to the most popular varieties. On the other hand, the purchase prices of Golden Delicious and Gala sports increased by USD 0.045 (PLN 0.20). This is good news for all market participants. Fruit growers expect an increase in prices of dessert apples. It's hard to be surprised. They have incurred significant costs and selling at current prices is unprofitable. Unfortunately, the most popular varieties are still bought from USD 0.20 ( PLN 0.90) to USD 0.23 (PLN 1.00) per kilogram for sorting. Gala's striped sports are clearly more expensive (maximum USD 0.43 - USD 0.45/kg (PLN 1.90 - PLN 2.00)). Thus, increases in selling prices in theory provide the opportunity for increases in purchase prices expected by producers. The question remains whether suppliers will raise them? It is worth remembering this fact when selling your fruit and negotiating the price. Lack of access to the eastern market and difficult (but also limited) exports to Egypt mean that this season the impact of the largest supermarket chains on the prices of dessert apples is much greater than in previous years. From the point of view of producer groups, the sale of dessert apples is mainly based on trade with supermarkets.
Spain
Spanish Fuji Apple Prices Increased 26% YoY in W47
Spanish Fuji apple prices in W47 remain strong with high demand from the European market. Prices of apples in the field increased by 26% YoY, from USD 0.58/kg in 2021 to USD 0.79/kg EXW in 2022. Additionally, market prices for apples are around USD 19.15/18kg box EXW medium sizes (100-113).
Belgium
Due to low prices, the closure of the Russian market for European gardeners and the increase in storage costs, many Belgian gardeners gave up growing apples. The area of apple orchards in Belgium decreased by 114 hectares over the year to 5,234 hectares. 15% of the area (800 hectares) was not harvested.
Moldova
Five Containers of Moldovan Apple Are Ready for Export to India
Due to the Russian war against Ukraine and the Russian embargo on Moldovan fruits, local producers are looking for new markets. Among the alternatives are the Arab countries, India and Egypt. So, from the beginning of this month, exports to the countries of the Persian Gulf are gradually activated. However, shipments of large quantities of apples are currently slow, as there are logistical problems due to the war in Ukraine, Vitaliy Gorincioi, chairman of the Moldova Fruct Association of Fruit Producers and Exporters, said in an interview with Radio Moldova. He also said that five containers with apples are ready for transportation to India. A trial batch of 100 tons of apples to India is required to obtain a permit for transportation through Moldova. In order to export products to India, manufacturers must pass international certification and meet certain sanitary requirements, and due to logistical problems, transportation by sea can take more than a month. At the same time, more apples will be exported to Romania, but this will happen in early January 2023.
Unexpected Consequence of Power Outage in Moldova’s Apple Sector
Managers of Moldovan factories supplying apple concentrate claim that "there was an abnormal increase in the supply of industrial apples at the beginning of the week". The increase is estimated to be about 20-25% compared to the level delivered daily in the previous week. At the same time, in the second half of November, only apples come out of the fruit store for processing. In this context, the association of suppliers of canned fruit and vegetables Speranța Con assumes that the recent power outage, although short-lived, has nevertheless had a psychological effect on fruit market operators. According to representatives of the organisation, "to avoid loss of product in the event of repeated power cuts and cold room operation failures, growers decided to quickly sell their produce to concentrate processors." It is clear that the sellers in this case cannot count on a decent income. The purchase prices for industrial apples on the Moldovan market have not changed in November at USD 0.095 ( € 0.09) compared to October.
Brazil
Sorters Face Competition With Imported Apples
In W48, apple sales were complicated in the classification regions. Despite the low domestic supply, demand weakened due to the World Cup games and competition with imported fruit. According to agents consulted by Hortifruti/Cepea, the national gala has almost zero stock, with the majority from abroad, and the fuji is quite scarce. As a result, the national gala 165 Cat 3 was sold for USD 16.47/box of 18 kg (BRL 86.25) in the average of the classification regions, a slight drop of 2% compared to last week. For December, it is expected that imported apples continue to affect the national market and that the eve arrives in the middle of the month. Demand should improve, especially after the fifth working day of the month, when consumers' purchasing power increases.
Argentina
Argentina Signed an Agreement With the US to Continue Exporting Fruit
National and United States health authorities signed the update of the bilateral agreement of the Pre-shipment Program at origin for the export of Argentine fruits from fruit fly-free areas to the North American country. Within this framework, a meeting was held at the Ezeiza international airport headed by the president of the National Agri Food Health and Quality Service (Senasa), Diana Guillén, the secretary of International Economic Relations of the Ministry of Foreign Affairs, International Trade and Worship, Cecilia Todesca Bocco and the United States Ambassador to Argentina, Marc Stanley. This agreement enables phytosanitary certification for the export of cherry, plum, peach, apple, nectarine, and pear fruits to the United States, increasing phytosanitary security in bilateral trade by facilitating the entry of this product into the North American market.
Ukraine
Gardeners in Ukraine Refuse to Grow Apples in Favor of Stone Fruits
The massive uprooting of apple orchards in Ukraine and the switch to stone fruit crops could be a problem for processors. Bogdan Maly, the owner of the Rosy Bukovyna farm, noted that he does not plan to develop the cultivation of sweet cherries. Since there are not enough workers, picking the berries is very expensive. More promising, he considers the cultivation of plums and apples, as well as pears.
Czech Republic
The Polish Apple Takes Everything, There Is No Mercy for the Czech Fruit
The price of apples fell enormously in Czech stores in November, but this fruit is mainly imported from Poland. Due to the influx of Polish imports into the Czech market, supermarkets offer the fruit cheaply, so apples do not keep up with the drastic rise in food prices. Due to low prices and unprofitable cultivation, Czech farmers are planning to further reduce the area under cultivation. In the Czech Republic, this year's apple harvest is expected to exceed 130,000 tons, which is considered the best harvest of the previous four years, but there are already rumours that domestic producers prefer to leave the fruit on the trees. This is a problem not only because apples are the most popular fruit in the Czech Republic, but also because while in October the average consumer price was around USD 15.19 (35.4 crowns or 600 HUF/kg)(this is already 2% lower than the average price in October last year, and 10% lower than the October 2020 average), from early to mid-November, the goods are offered to customers at a price of USD 0.65- 0.87 (15-20 crowns or 250-340 HUF/kg). In the Czech Republic, according to the official data of the Statistical Office, inflation in October was 15.1%, but food inflation was much higher, 25.1% compared to this, the consumer price of apples fell by more than 50%. According to Martin Ludvik, president of the Czech Fruit Growers' Association, the closure of the Russian market in 2014 was already a warning sign, but in fact, the Eastern markets have been closed to Poland since the outbreak of the Ukrainian war. Thus, deliveries to Belarus also stopped.
Colombia
Emergence as a New Preferred Market Destination for Polish Apple Exporters
Colombia has emerged as a new preferred market destination for Polish apple suppliers. In 2021, few exports were shipped to Colombia, but in 2022, all apples cleared by Colombian authorities were shipped. This resulted in a limited availability of reefer containers sailing to Colombia, making bookings more complicated due to the high demand. Additionally, a lot of Polish apple suppliers were highly motivated to look for alternate markets as there were issues with not receiving full payment last season in the Saudi Arabia and Indian markets.
