EastFruit has recently reported that at least three factories producing concentrate in Moldova will continue to accept apples. Theoretically, the Moldovan industry will be able to process the entire remaining marketable volume of apples from the 2021 harvest into apple juice concentrate by the summer – more than 100 000 tonnes. The leaders of the largest enterprises in the industry believe that under the current conditions, apples will be accepted for processing in the next 2-3 months “in the normal mode, hardly anyone will risk a sharp increase in the purchase volume of raw materials and the production of apple concentrate.”

According to them, current production plans are greatly influenced by the fact that about 10 000-18 000 tonnes of concentrate from Moldova, which until recently had real buyers, will most likely not be sent to the Russian market in the foreseeable future. By Moldovan standards, this is a large volume, given that the country annually produces 25 000-45 000 tonnes of apple juice concentrate. There are already at least 40 000 tonnes of concentrate from the apples harvested last year.

With large unsold inventories and foreseeing severe difficulties in the energy sector, processors will not risk taking expensive bank loans to expand the production of concentrate from last year’s apples. With a high degree of probability, this additional concentrate will be stored for an indefinite period.

Сообщение A sharp increase in the production of apple juice concentrate in Moldova remains doubtful появились сначала на EastFruit.

Recently, the management of JSC “Moldovagaz” urged the population of the Republic of Moldova “to reduce the gas consumption and if possible, to switch to alternative fuel.” Obviously, this statement is a consequence of the expected reduction in gas supplies to the country: Moldova (without Transnistria) negotiated with Gazprom the supply of 54 million cubic meters of gas – around 67% of the estimated monthly demand of 80 million cubic meters. This circumstance alarmed the energy-intensive companies from the agri-food sector, in particular, apple concentrate.

According to Speranța Con, the Association of Canned Fruit and Vegetable Producers, at the moment the regional divisions of Moldovagaz have not notified the apple concentrate producers about the reduction in gas supply. Nevertheless, in the context of the events taking place on the energy market and the aforementioned statement of Moldovagaz, the managers of these companies consider such a prospect as “highly probable”.

Many of the largest concentrate producers have biofuel energy infrastructures such as wood chips and dry apple pulp. However, such equipment is capable of meeting the needs of producers by a maximum of 15-20%. At the same time, some canning plants have already tried to buy additional volumes of wood fuel from forestry enterprises but were refused, motivated by the fact that, as directed by government agencies, they supply the population with firewood as a matter of priority. Representatives of canning  consider the use of diesel fuel or fuel oil as energy resources an even more problematic option.

In the current situation, the Speranța Con management considers the prioritization (at the government level, or the Ministry of Economy and the Ministry of Agriculture) of industrial gas consumers according to the “priority level” the least painful option. Accordingly, processors of perishable agricultural raw materials should be included in the group of economic entities supplied with gas as a matter of priority and in sufficient quantities. Otherwise, a reduction in purchases of industrial apples – and according to the forecast of 600 thousand tons. Half of the harvest this season is suitable only for processing and this can lead to very serious economic and social consequences for the apple growers.

Сообщение Apple juice concentrate producers in Moldova could buy fewer apples due to natural gas shortages появились сначала на EastFruit.

The apple season in the countries of the Northern Hemisphere, which got the hashtag #freshapplecrisis even before its main start, is gaining momentum. According to EastFruit, harvesting of Golden Delicious apples started this week in Ukraine, but growers are not satisfied with prices for the first batches, as well as the sales in general.

Apple growers are now ready to ship Golden Delicious at 10-11 UAH/kg ($0.37-0.41/kg). The price range for good quality apples in Ukraine is still 8-12 UAH/kg ($0.30-0.45/kg), and the average price has already dropped by a third compared to last year and is at the level of 2019.

In addition to lower prices, market participants report that there is no active demand for apples from the main buyers.

Firstly, the Ukrainian market now has a large supply of hail-damaged apples. Buyers of the fresh market do not need such products considering that demand for higher-quality fruit is also low, and producers of apple concentrate prefer to work with previously contracted volumes. In this case, growers can receive no more than 3.50 UAH/kg ($0.13/kg).

Secondly, sales of all the main varieties on the market are stagnating, even when the harvesting of later apples has not yet entered an active phase. The weather also contributed to this, with the Gala apples season having started two weeks later. As a result, in the absence of active demand, the supply of earlier apples will gradually overlap with the season of later ones, reducing the overall price range in the market.

For instance, the starting prices for Gala apples in Ukraine were 12-14 UAH/kg ($0.39-0.52/kg) at the beginning of September, but by now they have dropped to 8-11 UAH/kg ($0.30 -0.41/kg), confirming the forecasts the APK-Inform: Vegetables and Fruits analysts made at the conference “Apple Business of Ukraine-2021”. Let us remind that if you could not attend this event you can get up-to-date analytics of the apple market in the research “Fruit and Vegetable Market of Ukraine-2021: Results and Forecasts for the Next Season” to be updated by the beginning of October this year.

Note that #freshapplecrisis refers not only to Ukraine, but to all key countries in the global apple market. For example, at the very beginning of the season, the prices for Gala apples in Russia fell by half at once, and in Poland growers have started protesting against low purchase prices of local retail chains. Moreover, many Polish farmers are even considering abandoning apple cultivation in favor of pears. Meanwhile, in Moldova, market participants also report low sales and there is an acute shortage of storage capacity while waiting for one of the largest apple harvests.

Сообщение Freshapplecrisis. “Golden Delicious” season starts with poor sales in Ukraine появились сначала на EastFruit.

According to EastFruit analysts, participants in the Chinese fresh apple market expect a difficult season. Despite the USDA’s forecasts of a possible decrease in the apple harvest in China, local sources speak of a likely increase in production.

The situation is aggravated by the fact that summer apples in China in 2021 were sold at record low prices given large stocks of the 2020 apple harvest in the country’s fruit storage facilities. Accordingly, apples from storage were sold at relatively low prices, competing with summer varieties.

Since Chinese farmers started supplying Gala apples to the markets in late July and early August, the situation in August only worsened and prices remained at record lows. Farmers often received less than $0.2 per kg for good-quality summer apples, and buyers paid no more than $0.10 per kg for small-sized apples!

Despite low prices throughout the season, China managed to increase its apple exports by only 2% compared to the 2019/29 season to 1.1 million tons. This was the highest export volume in the last three seasons, but it was significantly lower than the export in the 2016/17 and 2017/18 seasons. In those years, China exported 22-24% and almost 260 thousand tons more apples than in the 2020/21 season.

Read also: Apple prices in Belarus are among the highest in the region due to government regulation

Apple imports to China last season were also at a record low for many years – only about 69 thousand tons. However, this did not save the situation. It seems that an alternative to the Russian market, access to which for Chinese apple exporters is still closed, has not been found.

This is complicated by the unfavorable situation in the apple concentrate market, where China is the largest producer and supplier. In recent years, reconstituted juices are no longer considered a healthy product and are losing consumers around the world, with other drinks taking their place. Accordingly, even the sale of apples for processing into concentrate at an affordable price is now more complicated.

Another high apple harvest in 2021 in China, if confirmed, could aggravate the global imbalance in apple supply and demand, which EastFruit experts draw attention to with the #freshapplecrisis hashtag.

By the way, from the countries of our region, Uzbekistan became the largest apple importer from China last season, where about 6 thousand tons of Chinese apples were shipped. Kyrgyzstan bought about 2.8 thousand tons of Chinese apples, while other countries almost did not import apples from China. On the other hand, China actively competed in the markets of Asia and the Middle East with apple suppliers from Europe, and this competition in 2021 can only get tougher, because a record apple harvest is expected in Eastern Europe.

Сообщение Apple market in China: high stocks, low prices, pessimistic expectations появились сначала на EastFruit.

Experts of Moldovan agricultural producers’ organizations agree that it makes sense for producers and traders to build a more balanced export schedule, namely, to increase exports this fall, not hoping for their maximum intensity in winter and spring.

Read also: Exports of apples from Moldova in May 2021 – another negative record

This was concluded based on the export dynamics in winter and spring 2021. According to expert estimates, Moldova exported about 120 thousand tons of apples of the 2020 harvest by the beginning of this month. Moreover, almost 84 thousand tons of apples were exported from the country from January to May 2021 inclusive. However, traders have fallen far behind the anticipated export schedule. According to the estimates of the Moldova Fruct association, about 10-20 thousand tons of apples remain in the refrigerators of horticultural and commercial enterprises. The chances of exporting them this month are slim. In previous years, the volume of apples export in June decreased several times compared to May – up to 3-5 thousand tons. The main channel for the sale of apples remained the enterprises producing apple concentrate.

According to the operators of the Moldovan fruit market, the problem arose due to the fact that the export volumes of Moldovan apples decreased last fall, contrary to the trend of previous years: in September – 9.5 thousand tons, in October – 6.7 thousand tons, November – 6.4 thousand tons. In September-November 2019, export of apples increased from 9 to 18 thousand tons. In the fall of 2018, they remained at the level of about 19-21 thousand tons per month.

Сообщение Moldovan traders will have to revise the apple exports schedule for the new season появились сначала на EastFruit.

During 11 months of the last season (July-May) Ukraine exported 83.9 thousand tons of apple concentrate, according to analysts of the Ukrainian Horticultural Association (UHA). Compared to the indicators of the 2018/2019 season, when a record of 108.6 thousand tons of apple concentrate were exported, the supply of these products abroad in physical terms decreased by 23%.

Despite a significant decrease in the volumes of foreign supplies of concentrate, export proceeds from sales of this group of goods not only did not decrease but increased by 4%. Thus, for 11 months of last season, the export of apple concentrate from Ukraine in value terms amounted to $ 93.6 million. For comparison, a year earlier, sales of concentrate brought Ukrainian exporters $ 89.6 million.

“The increase in the price of apple concentrate last season was caused, first of all, by a decrease in apple production in Ukraine. Due to the limited supply of high-quality products on the market, producers were in no hurry to hand over low-quality apples for processing, trying to sell them on the fresh market as soon as possible. At the same time, prices for these fruits at the beginning of the 2019/2020 season were 1.5-2 times higher than a year earlier. Accordingly, the level of prices for industrial apples was also significantly higher than in the 2018/2019 season”, comments on the situation on the apple concentrate market, UHA Development Director Katerina Zvereva.

It is worth noting that in the 2018/2019 season, a record harvest of apples was harvested in Ukraine, which local processing enterprises could fully take advantage of.

“At the height of the 2018/2019 apple season, due to the high supply on the market, apple prices reached their lowest historical level. Some producers even stopped harvesting apples, believing that they would not be able to sell their products at an acceptable price. Accordingly, processing companies took advantage of the situation and bought apples for less than UAH 1 / kg. Even in the spring of 2019, the factories for the production of apple concentrate continued to work, and the producers continued to rush to sell their products for processing so that they would not have to be thrown into the trash afterward,” notes the executive director of the UHA Semen Kramarenko.

The main countries-importers of apple concentrate from Ukraine last season were Poland and the USA, which imported 23.7 thousand tons and 23.6 thousand tons of these products, respectively. Note that the United States has significantly increased supplies of apple concentrate from Ukraine relatively recently – in the season before last. The growing interest in Ukrainian products from the United States is due to a reduction in concentrate supplies from China due to the tense economic situation between the countries. The five largest buyers of Ukrainian apple concentrate also included Austria, Germany, and Belarus.

Сообщение Export of apple concentrate from Ukraine: volumes decreased, costs increased появились сначала на EastFruit.

According to estimates by Andriy Yarmak, an economist in the investment department of the Food and Agriculture Organization of the United Nations (FAO), the global market for fresh apple and apple concentrate can suffer huge losses due to coronavirus and low oil prices. This means that gardeners will have a very difficult season, even despite the market’s stagnating for many years.

“The volume of world apple trade has been fluctuating at a level close to $8 billion for many years, and in real terms, it has a downward trend. These tendencies occur due to the backdrop of growing apple production in almost all major producing countries and many developing countries and growing competition from other fruits and berries in the consumer market,” says Andriy Yarmak, an economist in the Investment Department of the Food and Agriculture Organization of the United Nations (FAO).

“According to our estimates, in 2020 the global apple trade may fall by $1.0-1.2 billion. These are direct losses for growers who were focused on the export of their fruits. They are caused by lower incomes of consumers around the world, especially in countries dependent on tourism and energy exports, the devaluation of national currencies, as well as the complexity of logistics. This will be an absolute record fall in apple trade in history,” predicts Andriy Yarmak.

According to the forecasts of the UN FAO expert, a decrease in global demand for apples can lead to a real collapse in world prices on this product, because it will be impossible to reduce production quickly. Moreover, according to EastFruit estimates, after declining production in Europe last year, gardeners expect a high yield of apples this season. The combination of these two factors is highly undesirable in any business.

“If there are no problems with the volume of apple harvest in the main producing countries, we can see a historically record low price level for fresh apples. At the same time, it will be practically impossible to sell an apple of lower quality categories, because the cost of logistics has also grown, which will make deliveries of low-quality apples economically unprofitable,” notes Andriy Yarmak. An expert also believes that such countries as Poland, Moldova, Serbia, China, Turkey, Iran, and Ukraine will suffer most from the possible fall in world apple trade.

“Poland continues to earn money by supplying apples to Russia through the mediation of Belarus and Kazakhstan. However, Russia will sharply reduce fresh apple imports in 2020, as oil and gas revenues plummet, and local apple production continues to grow. The second-largest apple market for Poland is Egypt, where the welfare of the population directly depends on tourism, as well as the consumption of apples, to a large extent, and oil exports. Both of these sources will run out sharply in 2020. The third-largest market for Polish apples is Romania. However, Romania can suffer economically more than most other EU countries from the coronavirus pandemic. In addition, India, as a major apple market for Poland, also sharply reduced apple imports. Therefore, more than half of Poland’s apple importers will have significant problems with apple imports. There is practically no alternative to them because, in Poland, only a few farmers produce premium-quality apples and sell them in a high price category,” the economist said.

Andriy Yarmak says that the situation is even worse for Moldova and Serbia, almost entirely dependent on Russia’s apple exports. Turkey and Iran also depend on exports of oil and gas and tourist countries, as well as to Russia, which will also significantly impact their apple producers.

As for Ukraine, its export is more diversified, but half of the deliveries are still carried to Russia through Moldova and Belarus. Ukraine is the EU’s second-largest market. In this case, Ukraine can still be a competitive supplier, but prices are likely to be shockingly low. On the contrary, supplies to the UAE can significantly decrease since this country lost almost the entire tourist flow, on which apple sales, as well as oil export revenues, depended. Similar problems are possible with deliveries to other countries in the Middle East.

“The countries of Southeast Asia will remain the most attractive direction for deliveries in terms of price, but there will be fierce competition between China in the low price segment, as well as the USA, New Zealand, South Africa, Italy, and France in the premium. Thus, it is better to prepare for this situation in advance,” says Andrii Yarmak.

Accordingly, countries focusing on the growth of medium and low-quality apple may face a situation where the supply of apples for processing increases sharply. However, will the global demand for fruit juices, in particular apple juice, increase? Andriy Yarmak believes it will not. Moreover, it may even decline.

“Recovered juices, in which apple concentrate is widely used, are not critical products for consumers. In addition, they have not been considered healthy foods since sugar is usually added to them. Therefore, a decline in consumer incomes around the world will also affect the consumption of juices and the demand for apple concentrate. Its prices have already been at a very low level for many years. Therefore, selling apples for processing in the new season may be so unprofitable for the gardeners that harvesting will not be worth the price,” the FAO expert explains. Andriy Yarmak also notes that the probable loss of the apple business will not be as significant as the loss of exporters of fresh berries, where a decrease in tourist flow will negatively affect not only consumption but also transportation of berries.

Сообщение Record losses in the history of global apple market in 2020 появились сначала на EastFruit.