Increasing Production and Rising Storage Costs Drive Apple Processing Volumes in The EU

In the 2022-23 marketing year , apple processing in the EU is expected to reach 4.4 million mt, a 12.5% increase compared to the previous marketing year. This is, due to increased volumes of fresh apples going into processing in Germany, Poland, France, Austria, Italy, Spain, Slovenia, and Slovakia. The fresh apple harvest in Poland, the leading apple producer in the bloc, could rise to 4.5 million tons, a 5% YoY increase due to favourable weather conditions. Italian apple volumes are set to rise to 2.2 million, 5% more than the previous year, owing to improved harvests in Veneto, Friuli-Venezia Giulia, Lombardy, Piedmont, and Emilia-Romagna. Apple processing volumes in France and Germany could reach 1.5 million tons and 1.1 million tons, respectively. This would signify a yearly increase of 6% for both countries. The average share of apples going into processing in the EU could rise to 39% of the total supply, compared to 31% in the previous marketing year.

In many parts of Eastern Europe and Portugal, the scenario was different from that witnessed in Western Europe. Adverse weather conditions hampered fresh apple production in Romania, Lithuania, and Hungary. Portugal also faced similar drier conditions which caused a decline in harvests. In Hungary, the harvest is projected at around 300K tons, the lowest crop in over a decade. However, crop reductions in the other countries were not significant enough to affect the overall positive crop outlook in the region.

Apple processing volumes in the EU were also aided by rising energy prices driving up storage costs. This prompted farmers and farm cooperatives to place high-quality fruit into storage while diverting lower-quality apples to processing. Portuguese storage costs have ranged between USD 0.70-0.75/kg for the 2022 season, an increase of USD 0.10-0.15/kg compared to the previous campaign. This rise in storage costs was triggered by two primary factors: Firstly, the cost of labour has increased due to inflation. Secondly, the surge in energy and raw material costs has directly increased the cost of storage, transport, and packing.

Improved processing volumes are expected to increase the EU's concentrated apple juice (CAJ) exports. Additionally, the Chinese apple crop could drop by 20% due to adverse weather, negatively influencing the country's CAJ production. This scenario bodes well for the EU as the low supply in China could make the country less competitive in the global market.