1. Weekly News

China

Gala Apple Prices Surge in Northern Shaanxi Due to Hail Damage

In Northern Shaanxi, China, Gala apples entered the market in early Aug-24, with prices increasing to USD 0.56 to 0.63 per kilogram (RMB 4 to 4.5/kg), driven by strong demand for early-season apples. Prices briefly dipped mid-Aug-24 but rebounded after hailstorms on August 19 to 20, 2024 damaged much of the crop, causing a supply shortage. The reduced planting area and high quality of the apples kept prices stable, with larger Gala apples reaching USD 0.63 to 0.66/kg (RMB 4 to 4.7/kg) in Luochuan and nearby regions. The hail damage is also expected to affect early Fuji apples, benefiting Gansu's Huaniu apple producers later in the season.

Europe

Smaller Apple Harvest Expected in Europe for 2024/25 Season

The 2024/25 apple harvest in Europe is predicted to be smaller than usual, with significant reductions in Poland, Germany, the Netherlands, Belgium, and Greece. Poland's production may drop 20% year-on-year (YoY). Greece's high temperatures have affected fruit sizes, though quality remains good. Germany, Belgium, and the Netherlands also expect lower yields, except for Germany's Bodensee region, which reports a 13% YoY increase. Italy anticipates a slight 1% YoY drop, while Spain and France expect stable production. Prices are likely to rise due to the decreased supply.

Hungary

Hungary's Apple Harvest Declines, Expected to Impact Prices

Hungary's 2024 apple harvest is projected to be 150 thousand tons less than in 2023, driving up prices. An estimated 90 thousand to 100 thousand tons of food-grade apples and 220 thousand to 240 thousand tons of industrial apples are expected, falling short of the 110 thousand tons needed for consumption and 400 thousand tons for processing. The reduced harvest is due to last year's strong yield, which weakened trees, and unfavorable weather, especially drought. The European Union (EU) is also experiencing a lower-than-average apple harvest, likely affecting regional prices.

India

Indian Apple Growers Urge Government to Raise Import Prices on Iranian Apples

Indian apple growers are urging the government to raise the minimum import price (MIP) for Iranian apples from USD 0.60/kg (INR 50/kg) to at least USD 1.07/kg (INR 90/kg). They argue that the current MIP allows cheaper Iranian imports to undercut domestic production, which is struggling with higher local costs. Iranian apples comprised 28% of India's total imports in the 2023/24 season. Growers suspect under-invoicing or duty evasion and seek government action to protect the local apple industry.

Kazakhstan

Kazakhstan Imposes Apple Import Ban Due to Record Harvest

Kazakhstan banned apple imports by road, except from Eurasian Economic Union (EAEU) countries, until the end of 2024. This decision is driven by a projected record apple harvest of 300 thousand tons, an increase of 18% YoY. This increase will meet domestic demand, reducing the need for foreign apples. Despite the ban, Kazakhstan had already imported 94 thousand tons of apples in the first half of 2024, mainly from Poland (46.9 thousand tons) and also from Iran and China. Imports from Uzbekistan, however, declined by 9.4%. This measure is expected to impact key exporters like Poland and Russia.

South Korea

South Korea Plans to Stockpile 20 Thousand Tons of Apples for Supply Stabilization

The South Korean government will stockpile 20 thousand tons of apples to stabilize the market. This includes 15 thousand tons of Fuji apples in 2024 and 5 thousand tons of Hongro apples in 2025. The Ministry of Agriculture, Food, and Rural Affairs (MAFRA) will manage the operation, costing USD 19.4 million (KRW 25.8 billion). The apples will be stored in eight major distribution centers and released as needed to balance supply and demand.

United States

Early Apple Harvest Begins in Michigan Amid Strong Production Outlook

Michigan's apple harvest has begun earlier than usual this season, with an expected yield of around 30.5 million bushels. Warmer temperatures in late winter and early spring led to earlier blooming, and the lack of post-flowering frosts allowed the harvest to start ten days ahead of schedule. Normally, Michigan produces about 25.9 million bushels annually, but this is the third consecutive large crop. In 2023, the apple harvest reached 31.9 million bushels. In W36, Gala, McIntosh, and Honeycrisp varieties are being picked, with Fuji and Golden varieties expected to follow.

2. Weekly Pricing

Weekly Apple Pricing Important Exporters (USD/kg)

Yearly Change in Apple Pricing Important Exporters (W36 2023 to W36 2024)

Italy

In W36, apple prices in Italy remained steady at USD 1.85/kg, consistent with the price in W34. However, there is a 2.98% month-on-month (MoM) decrease and a 23.16% YoY decrease. The MoM decline reflects the ongoing stability of supply and demand dynamics, supported by the VOG Consortium's consistent availability and reduced competition in European markets. The YoY decrease is attributed to the robust performance of the previous season and increased availability from the new harvest this season, which has alleviated market pressure and contributed to the lower price comparison YoY.

United States

Apple prices in the United States (US) remained stable at USD 1.54/kg in W36, with no week-on-week (WoW) or MoM change. This stability is due to the balanced supply from Ontario, which effectively meets market demand, coupled with the early harvest of certain apple varieties that have helped maintain equilibrium. Additionally, local conditions and varying impacts on different growers have contributed to price consistency. There is also a 16.70% YoY price increase due to market dynamics and supply constraints from previous years, which have resulted in higher prices despite the current season's ample supply.

Chile

Chile's apple prices decreased slightly by 1.26% WoW and 2% MoM to USD 1.81/kg in W36 due to a modest easing of the supply constraints that had previously driven up prices. Despite the slight weekly and monthly declines, the market remains under pressure from reduced production and export volumes this season. The YoY decrease of 16.49% is due to the higher base prices from last year, which were elevated due to more acute production challenges. The current pricing reflects a gradual adjustment as the market balances reduced supply with ongoing demand.

South Africa

The wholesale price of apples in South Africa reached USD 0.68/kg in W36, reflecting a slight 1.68% WoW increase. This uptick is due to ongoing improvements in apple quality and extended harvest windows, enhancing marketability. Despite this weekly increase, there is a 3.32% MoM decrease due to the higher overall production levels, leading to increased market supply this month. The significant 46.95% YoY decrease results from a substantial rise in apple production, which has exceeded previous forecasts and contributed to greater supply in the market this season, putting downward pressure on prices.

France

In France, apple prices remained steady at USD 1.85/kg in W36, maintaining the same level as in W35. The prices reflect a 21.43% increase MoM and an 8.05% rise YoY. The stability in W36, despite recent increases, indicates a balanced market where tight supply conditions continue to support prices. The modest YoY rise underscores the impact of reduced European apple harvests and sustained demand, while high production costs and export performance influence price levels.

3. Actionable Recommendations

Adjust Sourcing and Pricing Strategies Amidst Lower European Apple Yields

Apple distributors and retailers in Europe should adjust their sourcing strategies to address the anticipated 2024/25 reduction in apple yields. Given the overall decline in production, they should secure contracts with reliable suppliers and consider diversifying their sourcing to mitigate risks. Additionally, they should adjust pricing strategies to reflect the anticipated increase in apple prices due to reduced supply. These steps will help maintain supply stability and optimize profitability in the face of a smaller harvest.

Secure Alternative Supply Sources Amidst Hungary's Reduced Apple Harvest

Hungarian apple distributors should secure alternative supply sources to mitigate the impact of the 2024 harvest's shortfall. With projected food-grade and industrial apple yields falling short of demand, distributors should explore options in neighboring regions like Poland and Romania, where apple production might offset the deficit. Additionally, they should adjust procurement strategies by diversifying suppliers and negotiating flexible contracts to ensure a stable supply. Revising pricing strategies to align with the anticipated increase in apple prices due to the reduced harvest and overall lower EU apple production will also be crucial.

Adjust Procurement Strategies to Address Gala Apple Supply Shortages

Producers and distributors in Northern Shaanxi should adjust their procurement strategies to address the Gala apple supply shortage caused by recent hailstorms. They should prioritize sourcing from regions with stable or increasing apple supplies, like Gansu, which could benefit from the reduced supply of early-season apples. Additionally, they should negotiate flexible purchasing contracts to accommodate price fluctuations and ensure a steady supply of high-quality apples throughout the season. Monitoring market conditions closely and adapting procurement plans will help mitigate the impact of hail damage and stabilize supply.

Sources: Tridge, Freshplaza, Guojiguoshu, Agrotimes, Hvg, HimTimes, Eastfruit, Nongmin, MXfruit