The apple sector should not get over-excited about an apparent recovery in the market for Red Delicious, according to latest issue of the World Apple Report.
The variety is apparently enjoying a resurgence in popularity on world markets as average FOB prices have risen in several US producing areas, including Washington state and Michigan and to a lesser extent in European markets. FOB prices in the different regions have clawed ground back from the persistent lows over the past three seasons.
But the report, published by Washington-based Belrose Inc, warns against reading too much into a possible recovery as the percentage increase in FOB prices for Red Delicious since the 200-01 season has been less than the percentage decrease in crops across Europe and North America.
Also while FOB price increases have been up to 30 per cent over the 2000-01 season, total supplies in Europe and North America have been 30 per cent below 2000-01 season levels rising to 40 per cent for Washington state.
"For Red Delicious to remain at current levels of profitability when the total apple crop rebounds, there will probably need to be further shrinkage in volume," find the report’s authors. "Red Delicious may be nearer to a sustainable level of profit than it has been in the recent past, but further shrinkage may be needed before it reaches a stable equilibrium."
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