Rising Apple Production in Spain Plummets Prices Amid Higher Costs

Published 2022년 3월 15일

Spanish apple production for all varieties is forecast at 492.3K mt in MY 2021/22, a 27% YoY growth and a 13.5% increase compared to the ten-year average. As a result of the rise in apple supply, the wholesale price of Spanish Golden Delicious apples has plummeted by -44% YoY in W10 of 2022. The decrease in value comes after apple production costs skyrocketed for Spanish producers due to the increasing input costs. With an improved apple yield and significantly lower prices, Spanish apple exports are forecast to rise considerably in 2022. However, Spanish producers might have to face low-profit margins.

According to the Spanish Agroalimentary Cooperatives forecast, the next apple harvest will be 27% higher than last season's, producing 492.3K mt. As a result, the production volume will also be 13.5% higher compared to the ten-year-average apple production in Spain.

As a result of the rise in apple supply, the wholesale price of Spanish Golden Delicious apples, the most produced variety in the Catalonia Spanish market, has plummeted by -44% YoY. According to Tridge’s Price Chart, on March 3th of Week 10, the price was recorded at USD 0.76/kg compared to USD 1.37/kg the same week last year. The price also recorded a 25% WoW decrease from USD 0.90/kg in Week 8 to USD 0.68kg in Week 9.

The increase in apple production in Spain is due to an improved apple yield in the country and follows an upward trend of apple production in Europe. For Europe in total, apple production is forecast to increase at 10% YoY to 11.7M mt, with a YoY increase in apple production expected in most of the main producing countries in Europe like Poland and France.

The fall of apple prices in Spain comes at a time when apple production costs have skyrocketed for Spanish producers due to the increase of all inputs costs. According to the Spanish Association of Fruits and Vegetables Exporters (FEPEX), the three-year increase in apple production cost is 41%. In comparison, the retail price in the country has increased by 6% over the same three-year period. Due to the low prices seen this year in the wholesale market, apple producers have asked for support from all agents in the supply chain channels, through the Afrucat Apple Committee. Producers are calling for more equal cost-price distribution deals throughout the retail channel to increase sales prices for apples.

Rising production costs are mainly due to increases in labor payments, higher costs of raw materials, electricity costs, and the increases in the demand for innovation, health guarantees, controls, and certifications, all of which are demanded in the market today.

Due to the improved apple yield, Spanish apple exports are forecast to rise significantly in 2022. Furthermore, Spain is looking at expanding its share in markets such as the UK, Morocco, Mauritania, Brazil, Colombia, and the Middle East. However, the expected increase in export volumes seems to be attached to a significantly lower value of the product, which could be crucial for the producers’ profit.