OVERVIEW GLOBAL APPLE MARKETJune 7, 2019
The new apple season has not yet started in the northern hemisphere, but the market is already under pressure. The total stock of apples in Europe stood at 1,561,430 tons (WAPA) on May 1 this year, the highest figure in more than 10 years. Nevertheless, the sales and price rates vary per variety. The demand for certain club varieties is particularly good. In Europe, exports from the southern hemisphere have declined due to overproduction, and those shipments have been finding their way mainly to Asia. The price for apples in China is rising as a direct consequence of the trade war with the US.
China: Apple price twice as high as last year
Due to the low production in 2018, there are still few Chinese apples on the market. As a result, the price is often twice as high as that recorded at around this time last year. The new harvest will only hit the market around October; therefore, prices will likely stay high in the short term. In addition to Chinese apples, many apples are also imported from New Zealand. The various new varieties from New Zealand are attracting the interest of the Chinese consumer, so the demand for them is also high. Chinese consumers prefer sweet and crunchy apples, which is why sweet apple varieties are the most demanded by importers.
The Netherlands: Dry weather leaves its mark on the apple market
The dry weather recorded last summer has left its mark on the current apple season. In terms of prices, the Elstar season was still reasonable, but there were great contrasts in terms of quality. Apple sales on the domestic market were good, but unlike in the case of pears, the trade has mostly become a domestic affair. Traders expect to wrap the season up with varieties such as the Junami, Jonagold and Golden until the new harvest arrives. While Europe sometimes suffers shortages of organic apples in the summer, this won’t be the case this year. There is hardly any competition from overseas apples this year. Overseas growers know that there are enough apples available in Europe, so they are only shipping volumes previously agreed in contracts.
Belgium: Stocks not yet empty
The Belgian apple season is coming to an end and there are already overseas apples on the market. However, due to the dramatic European season, exports from South Africa and Chile have stopped. Moreover, retailers have delayed the sale of overseas apples and pears. The stocks of Belgian apples have yet to run out, but the quality is so poor that retailers are starting to switch over to imported apples. The fruit that remains is transported to bio-fermentation plants or processed to be used as animal feed.
Germany: Switch from domestic to overseas product
In general, the German apples from storage are sold just as smoothly as the Italian and French ones. According to traders, as long as the quality of the German product is up to scratch, the domestic apple sector has nothing to fear from the overseas supply. In terms of prices, the sector is also in a favorable position, with a slight upward movement here and there. This is especially true for the club varieties, but the Braeburn and Royal Gala have also been sold for good prices.
Despite the good to excellent quality of the domestic production, the import of overseas apples is increasing considerably. New Zealand takes the lead with its Braeburn and Royal Gala.
France: Stocks can be considered normal
France is now in the off-season and sales are being finalized, so it is still too early to make an analysis of the following campaign, as the harvest will continue until mid-June. At the moment, there is a good supply from the southern hemisphere, with steady shipments from South Africa and South America. The supply of apples from the southern hemisphere must be able to meet the demand in Europe and will cause some slight oversupply as soon as the northern hemisphere comes back into production in the new season.
The majority of apples in France come from the region between Montpellier and Nimes, in southern France. The situation varies depending on the variety. For the Gala and Granny, there will be 10 to 15% fewer apples in the new season; however, these forecasts still have to be confirmed. As for the other varieties, such as the Pink Lady, Joya and Reine des Reinettes, the trees are yielding a normal amount of apples, so we can expect a normal harvest. All in all, the total volume of apples in the new season is expected to fall slightly.
Italy: Sales and price rates vary per variety
The Italian stock of apples currently stands at about 500,000 tons, which is the largest one for the month of May in more than ten years. Just like in the rest of Europe, the apple market is still under pressure in Italy. Regardless of the excessive production on the continent, sales and prices have been strongly influenced by what is happening in the various markets. There are, however, differences in terms of sales when looking at the various apple varieties from Italy.
For example, Red Delicious sales were good in April, mainly thanks to the Indian market, which turned out to play a key role as a customer. The Gala also had good sales in April and is expected to sell more than expected. As a result, there is hardly any stock of this apple variety in Italy. For most of the new varieties on the market, sales went as expected. This, for instance, was the case for the Granny Smith. The stock of Braeburn apples is still fairly big due to the high production volumes and the existing stocks in Germany. This country, in fact, imported Braeburn apples from Italy in May. The stocks of Golden Delicious are in line with the forecasts, even though there was a smaller production in the previous season. Smaller sizes than normal are available for this variety.
At the moment, the weather in Italy is generally good. Only a few regions have been affected by temperature drops. According to the first reports, the blossom confirms the varying production levels for varieties such as the Fuji, Red Delicious or Golden, for which production was particularly high in 2018. It is difficult to interpret these factors, but a fall in the production in Europe is to be expected. However, the impact of the temperature drops on the quality of apples remains to be seen.
Poland: Frost damage reduces harvest by 85%
In Poland, the situation of the apples from the new season has so far been dramatic. Severe frost following a period of dry weather did no good to the fruit. The latest severe frost was recorded on the night between 7 and 8 May. The growers had sprayed the apples with protective products prior to the frost; however, at the end of May, there were reports that the apples in Poland were falling off the trees and were therefore unsuitable for consumption.
Damage claims vary per region. Some growers report the loss of 30 to 40% of their harvest, while others have lost up to 100%. The apples that can be saved will mainly go to the local markets. There will be a lot less available for export. The Gala and Champion varieties have suffered minimal losses, while the Idared and Golden have been the most affected.
It has been estimated that just 40% of the Polish apple harvest will survive. With regard to the volume in stock: on May 1 it stood at 405,000 tons, which is more than the average for this period, compared to previous years.
Azerbaijan: Growing exports to Russia
Apple exports increased sharply this year, going up by 41.5% compared to the same period last year. Between January and March 2019, there was mainly an increase in exports to Russia, with a 34.9% growth (27,500 tonnes). Azerbaijan thus benefits from the Russian boycott on European fruit and vegetables.
United States: Good supply of domestic apples, lower prices than last year
The supply of domestic apples continues to grow in the US, although the demand will slowly fall with the summer fruit season approaching.
“We are still shipping fruit from last year’s stock. Some varieties last longer than others and the most popular varieties are sold out. We continue to pack apples in June and maybe even in early July,” says a trader.
However, a number of growers have a smaller harvest. They have enough for the domestic market, but exports are much lower than in recent years. This has to do with the import levies, a large stock of European apples and the imports from the southern hemisphere.
The demand is normal at the moment, but will fall somewhat in the coming months, as soon as cherries and soft fruit from California and the southeast come on the market. The demand also changes per variety. There is a good demand for the Koru, a new variety, and the supply is not as big as normal, so the demand is pretty good. Still, the overall picture shows an uneven balance. After all, some varieties have good market prices (Fuji, Gala, Granny Smith, Golden Delicious, Red Delicious), but in general, prices are low, given the current supply. In recent years, the price of apples has usually gone up around this time of the year, but not this time.
Strong import prices
Given the limited stock, the price of import apples such as the Koru and Honeycrisp is “very good”, according to a trader. The price is comparable to last year’s.
For the 2019 season, New York growers are facing a presumably smaller production than normal due to a weaker bloom, although these predictions still arrive a little too early. In Washington, however, prospects had again pointed to a record volume, but a fall in temperatures caused the production to be reduced to more manageable proportions. In any case, this temperature drop was perceived as unwelcome.
Canada: Good season due to lower temperatures
Lower temperatures have somewhat delayed the flowering of the apples in the Ontario region. The growers expect not to be able to harvest until a week later in September. The Gala and Macintosh will be the main varieties to be harvested in this region. The Canadians can look back on a good season. Due to the colder weather, the demand for apples was greater and the volume in stock will likely be sold out soon, with most growers receiving average prices for their products.
South Africa: Growing exports to Asia, but less going to Europe
At the end of week 22, the equivalent of 14.2 million 12.5 kg cartons of South African apples had been shipped. More apples were exported to the Far East and Asia (36%); however, exports to the EU (-29%), the United Kingdom (-18%) and Russia (-35%) fell. The Royal Gala and Golden Delicious are still the most important varieties for export. There was a growth in the export of the Fuji and Cripps Pink / Pink Lady varieties.
The production is greater compared to last year, after the end of the drought, but the latest statistics for the production in the 2018/2019 campaign are not yet available. Exports have increased by probably 5 to 6%.
Argentina: Apple production is greater than expected
Although the apple production in Argentina will be greater, with around 590,000 tons, exports this year will still fall to 90,000 tons. This is mainly due to the surplus in the northern hemisphere, which has had an impact on the international apple market. Nevertheless, the yield per hectare remains historically low, as the acreage continues to expand.
Argentinian apple growers are facing a number of challenges in the long term, especially due to the limited capital available, which makes it impossible to make adequate investments in the orchards.
Chile: Vietnam, a new market for apples, among other products
On May 24, Chile and Vietnam reached an agreement that will allow the former to export apples and cherries to the latter. Apples will thus be exported to Vietnam already in June. In turn, Chile will be importing grapefruit and mangoes from Vietnam. The further expansion of Chilean fruit exports fits in with its strategy to become competitive on the world market.
Apple and Pear Australia Limited (APAL) is looking to take a share of the Hong Kong market through promotions and differentiation. After all, apples from Australia and Tasmania must show to have unique qualities if they want to stand a chance on the global market. Certain growers are therefore working with special varieties. In Tasmania, for example, there are plans to grow the first Red Moon apples next year.
The volume of apples in Australia increased by 2% this year; however, exports fell by 12%. The most cultivated varieties are the Pink Lady, Royal Gala and Granny Smith. The high season is in the fall and lasts until the beginning of winter.
New Zealand: Certain varieties strengthen the North American market
The North American market can expect the arrival of more apples from New Zealand in the coming weeks. There are already some apples on the market, but larger volumes are expected from mid-June and will continue to arrive until mid-October. The apples are a bit smaller, but the quality is good. However, this will have consequences for the supply of the largest sizes. The apples from New Zealand are helping strengthen the North American market, but only with certain varieties.
By Fresh Plaza