As the international fresh produce trade meets in Berlin for Fruit Logistica 2014, VOG director Gerhard Dichgans offers his view on the current state of the European apple market and the progress of this season's continental campaign.
The 2013/14 commercial season has been running for almost six months now: what trends can you see emerging from the apple market?
Gerhard Dichgans: South Tyrol apple production reached 930,000 tonnes in 2013. This was a good harvest, despite the beginning of the harvest operations being delayed by 10 days. We've had increased volumes of Golden, Red Delicious and Fuji, and we've just about equalled last year's numbers for Gala, Braeburn and Cripps Pink. So 2013 is turning out to be an average year, following a weak crop in 2012 and a good one in 2011.
By early January we had already sold roughly 30 per cent of the apples in storage. If we take into account the lateness of the harvest, we can see that we're in line with sales levels from recent years. A weakish November performance was followed by a strong sales burst in December, and in January too the markets are showing great interest in our products.
How does the situation vary from one market to another?
GD: This will be a big season for exports. If we look at the last two months – when we have had our entire range of apple varieties available – we have notched up good growth in Holland, northern Europe and the Mediterranean countries. Clearly, the German market is outstanding for us, showing extremely robust growth figures. This is not surprising, considering how low harvest figures for German apples have opened up inviting commercial opportunities for our products.
Gala, in particular, has greatly benefited from this situation, actually re-doubling its sales volume. And big rises have also been achieved by the Golden, Red Delicious and Granny Smith varieties. Braeburn has been the only underperforming variety, partly because we have focused our commercial season above all on Gala. So, it's easy to foresee that when the availability of Gala stocks begins to drop at the end of January, demand will shift back towards Braeburn.
And how have VOG's sales been going in Italy?
GD: The Italian market is obviously fundamental for us: varying slightly from one season to another, between 35 and 40 per cent of our sales are in Italy. In the autumn of 2013 we didn't manage to achieve the sales volume we had hoped for; here again, the lateness of the harvest season played a significant role. It's important to realise that other big apple-growing regions – especially Emilia Romagna – had excellent harvests. Consequently, in the period between the end of summer and the beginning of autumn, retailer clients found those products on the market and were able to stock up.
On top of this, we have to remember that in Italy we are passing through a phase where the purchasing power of a growing portion of the population continues to fall, and this is now starting to show in fruit and vegetable consumption.
How do you see the prospects for the coming months?
GD: European apple storage stocks at the beginning of 2014 stood at 3.9m tons, which is substantially more than in January 2013. We must remember that, in late winter and early spring 2013, apples were in short supply and consequently prices began to climb throughout the second part of the season. This will not be the case this year. Apple availability during the second part of the season will now correspond more to the situation in 2011/12.
In my opinion, after a few corrections in the autumn, the apple market has settled at price levels that will make it possible to send an adequate quantity of stocks to sale.At the same time, with more apples in stock than last year, we will be able to guarantee supplies throughout the summer, which was not possible in 2013. I'm also convinced that the apples we have stocked in our warehouses are of good quality and durability, so we can sell them without problems in the coming months.
The only worrying thing that strikes me is that some varieties are lagging behind in being taken out of stock, as is also happening with small-sized apples, which are unusually abundant this year. This could lead to further price adjustments.From early information coming to us from the Southern Hemisphere, their harvest may be delayed by ten days or so. This would leave a bit more breathing space for European produce and reduce the threat of imported products from the South crowding out the tail-end of European supplies.
Producers in the Southern Hemisphere will no doubt be aware that for the next six months apple supplies for the European market will be guaranteed by European apples, and that therefore last year's favourable situation for imported apples will not be repeated.
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