W41: Weekly Apple Update
China
The 2022 Apple Harvest in China Reduced by 10-15% YoY
China, the largest apple producer in the world according to data by S&P Global, is expecting a decrease of 10-15% YoY in the 2022/23 season, to less than 33 million tons. This signifies a decrease by 23% compared to 2019.
United States
Significant Increases in Price for Gala and Honeycrisp Apples
Horti Daily reports that in the US apples appeared on the market from Oregon, Missouri, New York, Washington, Michigan, and Ohio during W41. The price of apples are significantly higher compared to the same week last year. Gala prices are up 18% YoY while Honeycrisp increased 16%.
Wet Spring, Summer Drought Limiting Apple Production in the Northwest
Some orchards in Washington State, the leading apple producer in the U.S. last year, only have a few apples left on their trees. Two straight summers of high temperatures and drought have put a dent in this year’s supply. "This year we lost about 60% of our crop comparable to the year past, by the amount of apples that we took off of our trees," said Swans Trail Farms Operations Manager Nate Krause. It’s more than just the heat. Washington also had a cold and rainy spring, limiting the amount of pollen in the air, which apple trees need. "You had some frosts and some cold weather that impacted pollination and is expected to reduce production," said Christopher Gerlach with the U.S. Apple Association. The average national retail price for apples this year is $1.31/lb, the highest in the last five years.
France
Energy Crisis in France Negatively Affecting Fruit and Vegetable Sector as Costs Skyrocket
The dramatic increase in the cost of energy in Europe in 2022 is affecting all companies in the fruit and vegetable sectors, especially those who rely heavily on cooling and ripening. French companies who renegotiated their electricity contracts recently or have to renegotiate their contracts with energy suppliers in the coming months are experiencing record high tariffs which risks the sustainability of the companies. Nearly 1 out of 4 companies in the sector must renegotiate their contracts by the end of the year.
As an example, the French apple sector has experienced electricity prices multiplied by 3, up to even 12 times for companies that have already had to renegotiate their contracts. Operators in the fruit and vegetable sectors are already working to reduce their energy dependence as much as possible. But due to technical constraints, it is sometimes impossible for companies in the sector to reduce their energy consumption beyond a certain point. As France faces an energy crisis it is rationing electricity. If rationing is put in place in the fruit and vegetable sector in the form of power cuts, the market supply can be disrupted.
Poland
Higher Apples Prices in Poland but Possible Decline in Q4 2022
Lower inventories at the end of the season meant that the prices of dessert apples in August and September remained at a higher level than in the previous year - according to the data published by the Ministry of Agriculture and Rural Development, the increase was 34% and 27% YoY, respectively. Similar tendencies occurred in the case of apples for processing, which in September increased annually by approx. 9% YoY.
Higher harvests and possibly low export demand do not exclude a drop in apple prices in Q4 2022 on an annual basis. The prospect of high costs of storing fruit in cold stores (electricity) may result in an accelerated process of liquidating the stocks and accumulating sales in the first part of the season. It is possible that, as in the previous season, the greater part of the apples will be directed to processing, which is also supported by the problems with employees for harvesting, signaled in the industry. The implementation of such a scenario would result in a decrease in supply and an increase in the prices of these fruits at the end of the 2022/23 season. At the same time, it would also mean an increase in inflation in the fruit category in mid-2023. Apple prices are supported by high demand for apple concentrate.
TA: Higher Apple Harvest in Poland Is Followed with Increased Energy Costs
Based on the data from Central Statistical Office in Poland, the upcoming apple harvest will increase by 4% YoY to 4.2M mt. The production increase is notable as difficulties such as frost, drought, and hailstorms, did not affect the quality of the fruit. Increasing energy costs and a severe lack of labor is the main concern of farmers and traders despite a high average wholesale price of USD 1.44/kg in W39. (Continue)
In September, Poland Exported Apples to 15 Countries Outside the EU
According to data by the State Plant Health and Seed Inspection Service, last year's export results at the beginning of the season were primarily destined for Egypt. In September 2021 alone, Poland shipped almost 16,000 tons of apples to Egypt. This year, exports totaled only 3,676 tons. This is due to the war in Ukraine which created a priority approach to importing grains and complications in the payment system for imported goods in Egypt. Although small quantities compared to Polish production, exports to Kazakhstan, Mongolia, the United Arab Emirates and Saudi Arabia have increased. market players are hoping that export volumes will increase in the coming months.
Growers should receive 1.50 PLN / kg for apples after harvest and over 2.00 PLN / kg in spring
At present the price of apples is 0.70 - 0.80 PLN / kg from 7 cm depending on the variety. Below 7 cm, it is even PLN 0.60 / kg. The industry average currently amounts to PLN 0.32 / kg. The grower's calculations show that the minimum rate for fruit immediately after the congregations should be about PLN 1.50 / kg. Compared to last season, production costs have increased many times, while prices have remained unchanged. With production costs of PLN 1.00 / kg, this seems like an appropriate rate. Due to concerns over the cost of storage, many growers are now sending apples to the market. - The laws of economics work relentlessly, so prices are falling - says Paweł Kraciński from the Warsaw University of Life Sciences. Nobody wants a repeat of this spring, when dessert apples went to processing.
W41 Situation on the Wholesale Market in Bronisze, Poland
Apple growers report that the market in Bronisze is weaker compared to last week, despite the fact that there are fewer sellers. The only varieties that buyers are looking for are Malinówka and Delikates. When it comes to popular varieties such as Red Jonaprince, Szampion or Ligol, the asking prices are at PLN 25 for a 15-kilogram crate. Nevertheless, the transaction price is slowly being adopted at PLN 20 per box (PLN 1.33 / kg). Growers are of the opinion that transporting and offering smaller apples of lower quality does not make sense at the moment. The buyers' interest in them is negligible
The supply of the Lobo variety is interesting. In recent seasons, it has been one of the more expensive varieties on the domestic wholesale markets. Consequently, growers increased the area under cultivation. Today, Lobo is offered with almost every delivery vehicle on the market. Buyers can choose between offers. Interestingly, buyers complain about too large varieties of apples, which they do not want to buy. The most common transaction price for a Lobo mailbox is PLN 25, i.e. PLN 1.66 / kg.
Several Polish apple processing plants are reporting that the sale of juices and concentrates is currently doing well with shipments of concentrate to the USA, which are exceptionally advantageous. In addition, raw material purchases and production allow only for current sales, but not for product storage. Therefore, fruit growers associated with Agrounia are calling for the suspension of the supply of industrial apples. Strictly speaking, they say that not stopping deliveries will not increase prices. The original appeal on the Owocowa Polska profile reads: GROWERS, IF YOU DO NOT STOP THE SUPPLIES OF THE INDUSTRY FOR SHOPPING THIS WEEK, THE FAILURE TO INCREASE THE PRICES WILL BE YOUR ONLY YOUR fault. It is impossible to disagree with this line of reasoning.
Apple Is the Subject of Constant Promotion in Supermarkets Due to Large Supply
A large supply of apples in the country and fierce competition among suppliers give the largest supermarket chains the opportunity to buy apples at lower and lower prices. With very limited export opportunities, there is no doubt that these entities are in a privileged position today with high bargaining power in price negotiations The vast majority of fruit growers do not want their product - a high-quality dessert apple - to serve as a kind of incentive for the customer so they would decide to shop in a given supermarket. For example, the sale of apples directly from the pallet boxes, which is often criticized in a strong way by producers. Growers believe that this type of promotion perpetuates the image of apples as "cheap fruit from the floor". Their quality also often leaves much to be desired. On September 27. A kilogram of apples in a supermarket promotion was 60 groszy cheaper than a kilo of onions. The problem is that the average cost of producing for kilogram of onion is 20 cents lower compared to apples.
Turkey
Red Delicious Apple Harvest in Turkey Delivers High Quality and Yield
The harvest of Red Delicious apples, commonly grown in the Isparta region of Turkey, is ongoing in W40. Isparta apples are promising in terms of quality and yield and are well-colored at 90%, with large and medium sizes available. There is no doubt that India, with the highest demand for Isparta apples, will obtain high-quality apples from Turkey this year.
Apple Harvest in Niğde Expected to Reach 650,000MT in 2022/23 Season
Atilla Kaplan, president of Niğde Apple Producers Association, said that an apple harvest of 650 thousand tons is expected this year throughout the province and that the yield is very good. Kaplan said in his statement: "The apple harvest continues in Niğde. Last year, Turkey was the second in the production of 552,000 apples in the TUIK data. I hope we will maintain our place in the second place again this year. Horticulture in Niğde continues to grow, gaining momentum. The number of trees planted every year is getting more and more. The number of trees that do not bear fruit is also high, and the production will increase when they start to yield. Large gardens continue to be established. It makes Niğde a center of attraction. 150 thousand tons goes to export."
400,000MT Is Expected From the 61,000 Decare Apple Orchard in EğIrdir
Egirdir District Director of Agriculture and Forestry Ufuk Akçimen stated that they expect 400 thousand tons of harvest from the 61 thousand decare apple orchard in Eğirdir. Various kinds of apples such as 'Granny Smith', 'Semi-dwarf', 'Starking' and 'golden' are produced in the region.
200 Thousand Tons of Apples Will Be Exported From Isparta Until the End of the Year
The apple harvest in Isparta continues with Adıgüzel, the Agriculture and Forestry Manager of Isparta, telling reporters that they aim to produce more than the previous year. Adıgüzel stated that the apple harvest was realized at 1 million 130 thousand tons last year and they predicted that around 1 million 200 thousand tons of products will be purchased this year. Apples are sold to countries such as Turkey and India, Adıgüzel said, "Apple exports, which were around 14 thousand tons in 2019, increased to 46 thousand tons in 2020. Our figure, which was 129 thousand tons last year, is currently at the level of 150 thousand tons." The aim is to close the season on 200 thousand tons of apples exported. Adıgüzel noted that 25 percent of Turkey's apple production is made in Isparta.
Belgium
Low Apple Prices in Belgium Result in Some Growers Leaving Fruit on the Tree
According to the VILT.BE website, apple growers in Flanders have been going through hard times for years, and their position has worsened due to the war in Ukraine. The reason is the low selling price, oversupply and soaring costs. This week, dessert apples cost EUR 0.38 a kilo, while growers received an average of EUR 0.42 on August 1. This is not enough to earn a good living, says apple and pear grower Mario Vanhellemont of Tielt-Winge. "We have to get at least EUR 0.45-0.50 for the apple." Lower quality apples intended for industry are particularly stuck at the moment. The price of these industrial apples is now around EUR 0.10 per kilo. Mario Vanhellemont says he will not be able to cover the costs for sure as the harvest itself costs 8-10 cents, not to mention storage and sorting. Low yields and soaring costs are the reasons some apple growers are leaving their fruit on the trees this season.
Moldova
Moldovan Apple Export to European Countries May Reach 50,000 Tons
The Republic of Moldova can export a record 50 thousand tons of apples to EU markets in the 2022-2023 season, says Minister of Agriculture and Food Industry Vladimir Bolea. This is against the background of a significant decline in the apple harvest this year. It is worth adding that in 2021 only 1,100 tons of Moldovan apples were delivered to the EU market. In 2022, a harvest of about 485 thousand tons of apples is expected in Moldova, which is 180 thousand tons less than last year due to adverse climatic conditions. In Moldova, the total area of apple orchards is about 57 thousand hectares, this is the most cultivated crop in the country. Until now, about 95% of Moldovan apple exports went to Russia. Currently, due to the embargo imposed by the Russian Federation and the war in Ukraine, Moldovan producers have had to adapt and look for new markets. At the same time, in mid-July, the European Union doubled for one year the quotas of Moldovan products that can be exported without customs duties to the EU market which includes apples. This year, the number of countries to which the Republic of Moldova exports apples has increased from nine to 29.
Moldova Is Unlikely to Be Able to Export More Than 15-20 Thousand Tons of Apples to the EU
Experts from non-governmental organizations and traders from the Republic of Moldova agree that the statement by the leadership of the Ministry of Agriculture and Food Industry MAIA about the possibility of exporting a record 50 thousand tons of apple this season is "explainable, but unreasonably optimistic." The motives of the ministerial declaration, in their opinion, are two positive facts. Firstly, as has been repeatedly noted at all levels, the European Commission has doubled the quota for the export of Moldovan apples to the EU in the current marketing year - up to 80 thousand tons. Which, of course, should be considered an important incentive, primarily psychological. It can also be assumed that the EU authorities and the national governments of individual countries also somehow motivate European traders and retailers to cooperate with apple suppliers from Moldova. Secondly, this summer, Moldova exported approximately 2,000 tons of apples to Romania every month (while for the whole of last year, its export to the European market from Moldova amounted to about 1,800 tons).
However, since the beginning of autumn, the pace of supplies of Moldovan apples to the European Union has dropped sharply. Even if we assume that from the second half of October, Moldova will very quickly pick up the “summer pace” of apple supplies to Romania, and also enter other European markets with at least modest volumes of supplies, then Moldovan traders will probably be able to export about 20 thousand tons of apples by next summer. According to experts from farmers' organizations, this will also be a very good result. Especially if we take into account the high harvest of 2022 apples in many European countries, especially in Poland. As well as a low apple harvest in Moldova itself (according to an optimistic forecast - 480 thousand tons, according to a pessimistic one - 380-400 thousand tons).
Brazil
Holiday Stagnates Apple Market and Price in the South of Brazil
This week (10/10/22 to 10/14/22), the Nossa Senhora Aparecida holiday (10/12/22) stagnated apple marketing in the classification regions of the South of the country. Thus, even with reduced supply, prices fell or stabilized for most profiles. The Fuji 110 Cat 1, for example, was sold for R$ 115.00/box of 18 kg in the average of the regions, a slight drop of 1% compared to last week. For the next few weeks, the trend is for national apples to become increasingly scarce, which can guarantee the maintenance of high prices, at least until competition with imported and early apples intensifies - which usually occurs in December.
Bulgaria
Price of Apples in Bulgaria Increased Slightly During W41
The market price index (ITC), which reflects wholesale food prices in Bulgaria, rose this week by 1.24 percent to 2,125 points. For more than three months, the ITC has been without particular and sharp changes, positioning itself in the range of 2,029-2,125 points, according to the data of the State Commission on Commodity Exchanges and Markets (DKSBT). There was a slight but sustained increase in the index of nearly 4.8 percent. On an annual basis, ITC has grown by over 30 percent. During W41 the price of apples went up in price by 2 cents and are bought at BGN 1.35 (USD 0.68) per kilogram.
Hungary
The Drought Caused Significant Damage to the Hungarian Apple Sector
Based on the data of the FruitVeb Hungarian Vegetable and Fruit Association and Product Council, the agricultural portal pointed out that instead of last year's 520,000 tons, 42 percent less, around 300,000 tons of apples will be harvested this year. The president of FruitVeb, said that the drought not only has a negative effect on this year's harvest, but also strongly influences the amount of next year's harvest. Weakened fruit trees with only limited access to nutrients do not have the energy to grow a sufficient number of flower buds, which is a condition for next year's crop.
Higher Volumes of Polish Apples Will Push Prices Down on Shelves in Hungary
The young Hungarian apple orchards with irrigation weathered the drought and heat waves of 2022 well. These young plantations produce fresh apples for domestic consumption. On the other hand, very few apples were produced in the older orchards, which causes significant damage to the industrial processors. Ferenc Takács, the vice-president of the Hungarian Fruit and Vegetable Association, FruitVeB, informed InfoRádió that plants that do not have enough raw materials can be in real trouble. According to him, sixty percent of the Hungarian apple crop was used for industrial purposes for decades, because the sour concentrate was considered unique on the world market. Old plantations are being eradicated which reduces the volumes designated for processing.
According to Ferenc Takács, the quality of Hungarian apples is no worse than the products of Italy, Austria and Germany, but it is not a factor or competitive abroad. "In terms of quantity, we do not produce enough to export to large markets with the same quality for 12 months," said the vice president of FruitVeB. Poland has been Europe's largest apple producer for many years, but due to the economic crisis, its exports to the East are severely limited. For this reason, most of the surplus crop remains in Europe, which is expected to reduce domestic prices as well. Polish apples will be present in increasing numbers on Hungarian shelves.
Ukraine
High Volumes of Apples in Europe to Put Downward Pressure on Ukrainian Prices
In the 2022-2023 export season, Ukrainian apple prices may be lower than in previous years according to Volodymyr Gurzhii, head of the USPA Fruit company. The harvest in Europe is forecast at a higher level than a year ago, which will put pressure on prices. Turkey and Iran are going for a record - competitors of Ukraine, because they will all supply simultaneously to the same sales markets. A big harvest is expected in Serbia, and in terms of quality, they should be doing well too, because they grow almost the entire crop under anti-hail nets. That is, even compared to the Serbs, the Ukrainians are currently in a less favorable situation, which is complicated by logistical costs. They differ from those of Eastern Europe almost twice, or by $3-5 thousand for one container of apples, depending on which region of Ukraine it is transported from. "However, despite some negativity, I believe that we should continue to export." sums up Gurzhii.
