Amid the familiar issues of currency problems and falling budgets that have plagued the fruit import/export market in the past year, the age-old issue of supply and demand rose to the fore in the top-fruit sector this quarter. Producers risked oversupply and falling prices in the transition to the southern hemisphere season.
The English apple season proved stable, but competition on shelf was rife. Media reports claiming that Cox has fallen out of favour and that Gala, which is less prone to disease, is taking over were dismissed by industry insiders, who believe that Gala’s gain is not necessarily at Cox’s expense. The latter had an excellent early 2009 in the UK with plenty of local product available, causing import levels to fall, and Bramley producers will hope the bicentenary celebrations will boost consumer sales.
The European season was generally of good quality and, somewhat surprisingly, continued for over three weeks longer than expected, which impacted heavily on the start of the southern hemisphere season.
One importer, John Hopkins of Capespan, tells FPJ: “Going into the southern hemisphere season, all importers were aware that there was a shortage of Braeburn and above average volumes of Granny Smith, Royal Gala and Golden Delicious.
“Expectations were that the recession and higher stocks in Europe would be likely to lead to different sales patterns and pricing structures than in previous years.”
Reports of bumper crops across the pond in Washington were borne out by an impressive 8.5 per cent year-on-year rise in sales to the UK in both conventional and organic apples.
“Similar to the 1989-1991 recession, this current downturn has a few silver threads as consumers tend to dine at home, with additional shopping trips to major retail stores, which in our case has generated a much-needed trade-up in impulse fruit purchases,” says George Smith of the Washington Apple Commission. “As an important market for the industry for many years, the UK had adequate funding and a number of custom-made promotions for both retail chains and wholesale markets this season.”
When looking at the performance of each major variety in the UK, different patterns of sales are evident. Good-quality European Royal Gala was still available in Europe as the Chileans entered the market in early to mid-March, resulting in a weaker than expected market across Europe.
Quality issues in Chile did not help either, with varying reliability following high temperatures at source and batches of fruit showing lower than expected pressure and lenticel breakdown. This challenged importers to be very careful and controlled with shipments, to encourage stability in the market.
Good-quality, large-sized Royal Gala garnered higher prices than last year, although the risk of oversupply due to all producer countries exporting at the same time could now drive this down quickly. Brazilian crops are suffering significantly with russet this season, with lower volumes reaching the UK market and product retained for the domestic market. South African volumes are up, but fruit is generally smaller in size than last year. And now, New Zealand has just started to enter the market, with more variable prices seen than anticipated.
The southern hemisphere Braeburn season could well be an interesting one as both South Africa and Chile are up to three weeks later than normal. South African volumes of retail-quality fruit are expected to be lower due to hot weather affecting colour development, even though May and June are traditionally strong months for the variety. The first South African volumes have just entered the market at good values, with Chilean arriving next week. New Zealand, which is growing in most varieties and has benefited greatly from the growth in designer apples such as Jazz, has seen its second-lowest Braeburn crop in 10 years. Overall, it is probable that there will be good volumes available between May and July, with all three producers still in the market.
Pink Lady’s inexorable rise was slightly checked this quarter by lower sales as some consumers switched to cheaper alternatives.European product was variable in quality, with higher incidences of bruising affecting presentation. The strength of the euro made import values expensive, with many importers looking to the US to combat this, where good-quality product was available. Any serious southern hemisphere volume from Chile and South Africa will not appear on the market until mid- to late May. A strong early and late market is expected, while good volumes are common in late June and early July, with the Chileans dominant in the UK market in this period.
“The South African Golden Delicious season has started very nicely; availability is higher than we initially thought following excellent packouts,” Hopkins tells FPJ. “UK retailers were keen to start with new-season South African Golden, as stored European fruit did not always meet exacting UK standards on pressures and bruising.
“In Italy, France and Spain, there will continue to be a focus on local product, which will slow imported sales. However, in the UK business has been strong. We have had record prices at a wholesale level - as much as £12 for 12.5kg at their peak, which has now tailed off to around £10.”
Granny Smith saw perhaps the largest overhang from the French season, with eight to 10 per cent higher stocks available as the Chileans entered the market. French fruit is still available in May, with customers able to choose between three sources: France, Chile and South Africa. Prices are stable but trade in the wholesale markets for southern hemisphere fruit is lower than last year. With Chilean fruit moving slowly, the South African season has already been pushed back two to three weeks as a result and a domino effect could easily happen this year, with smaller sizes in abundant supply. Ultimately, the smaller-sized fruit produced in South Africa is likely to dominate the UK market from mid-May.
While the market for apples seems to be price and volume sensitive, the pear market is clearly short. The market for Conference pears is set to get shorter, with low crops in 2008 inevitably leading to higher prices as supplies from Belgium and the Netherlands are depleted. In this situation, imported green pears could be an important offer in the next quarter as the top-fruit sector looks to counter the attractive offers on impulse-bought snacks in the soft-fruit market.
“In the next quarter, control over import volumes needs to be more focused than ever,” believes Hopkins. “People will take far fewer risks and wholesalers will be shopping around and making smaller orders. Speculative importing will be risky. Providing there is control, it is still looking good though, especially as August and September could be really strong.”
US PEARS RIPE FOR TRIAL BOOST
Fresh pear producers are innovating to continue to increase demand for their product, writes Kevin Moffitt, president and ceo of USA Pears.
Supply and demand continue to play the most important roles in the profit and losses of fresh produce growers. To stay profitable means reducing supply or increasing demand. With the growth of agriculture worldwide, especially in developing countries, supply is much more difficult to control than demand. However, for fresh pear producers, I believe that the equation is in something close to equilibrium, with positive options for increasing demand.
The government and produce associations have helped raise awareness, if not demand, for produce with free fruit and veg in school schemes and 5 A DAY-type activities. These programmes are slowly increasing demand and with worldwide western-variety pear supplies showing flat, if any, growth, even an incremental increase in consumption will be positive for grower returns.
Fresh pear consumption in the US has risen 66 per cent since 1970, but is still only about 3lb per person or about six pears per year, compared to apples at 17lb, so there is definite upside potential.
New varieties, per se, are not the answer. In the case of pears, there are not many new, fast-producing, consumer-friendly varieties in the market or on the horizon. While new varieties are not racing to the market at the speed of the new apple varieties, in the US market we have been able to re-introduce consumers to our principal varieties by instituting a ripening programme using ethylene to ripen or trigger the pears, similar to what is done in the banana and avocado industries.
In the US, we grow about 200,000 tonnes of d’Anjou pears and 60 per cent are sold in the domestic market. Currently, about 40 per cent are ethylene-treated before they reach the retail shelves.
Some stores report 40-50 per cent increases in pear sales after they institute a ripening programme. Consumer taste tests conducted this winter showed that consumers not only preferred the ethylene-ripened pears versus those softened to the same pressure without ethylene, but they would pay more as well. Furthermore, the ethylene-ripened pears scored much higher in terms of juiciness and sweetness, the top two favourable attributes mentioned in our research.
Consumers do not want to wait for their fruit to ripen at home. Our survey revealed that 36 per cent wanted to wait no more than two days for their pears to ripen and only 10 per cent were willing to wait five or six days. So the advantage is not just in flavour and texture, but also convenience.
I recently read a report stating that Europe’s commercial pear production is down 15 per cent compared to 2000. It is decreasing in most countries with the exception of the Netherlands, Belgium, Portugal and the UK. With the slow or decreasing growth in overall supply and limited new variety development, I believe that pear producers have a real opportunity to enhance the flavour attributes of the current varieties through ethylene ripening. Ripening provides consumers with a sweet, juicy pear that they can eat right away, providing a solution to the immediate satisfaction and consumer-friendly fruit that shippers are seeking. Ripening pears with ethylene enhances the flavour profile of pears, as well as the bottom line to pear producers.
No comments yet