According to EastFruit analysts, Ukrainian growers can uproot record orchard areas in the 2022/23 season. Meanwhile, the developments in the fresh apple market in Ukraine are becoming very dynamic and may lead to a sharp increase in the price of fruit No.1 soon. Let’s figure out why, with the rising prices for apples, growers consider apple production not profitable enough.
If you look at the wholesale prices of apples in the current season, even in US dollars, the situation does not seem catastrophic. Prices are right in the middle between the best price seasons like 2019/20 and 2020/21 and the low price seasons like 2018/19 and 2021/22. The prices for one of the most popular apple varieties, Golden Delicious, are now 58% higher than a year ago and 73% higher than in 2018/19 when some farmers fertilized their fields with apples.
Moreover, we believe that from the end of March to July 2023, the average wholesale price for apples in Ukraine may increase significantly, which will lead to an increase in imports of fresh apples, mainly from Poland. Why, then, do Ukrainian growers uproot orchards?
“Apple prices may indeed rise in the coming months because Ukrainian fruit storage facilities have almost run out of stocks of quality apples. This is due, first of all, to terrorist attacks on Ukrainian civilian infrastructure – on power supply systems, which forced many Ukrainian growers to abandon plans to store apples. Since even minor interruptions in the power supply of storage facilities are fraught with temperature fluctuations in the chambers, this can lead to the complete loss of fruits stored there. At the same time, Ukrainian ports remained blocked for apple exports, which limited the possibility of exports. As a result, the supply of apples in autumn and in December 2022 greatly exceeded the demand, and prices were record-low while the cost of growing apples in 2022 was a record high. This resulted in losses for many apple growers and forced them to uproot,” Andriy Yarmak, economist at the Investment Center of the Food and Agriculture Organization of the United Nations (FAO), explains.
“In general, due to the sharp increase in the cost of plant protection products and the shortage of labor, not all growers carried out treatments on time. This also affected the storage of apples, if someone still made the decision to store them, despite the risks. Storage conditions, due to power outages, were poor. This caused a situation when, at the end of March, there were not enough high-quality Ukrainian-produced apples on the market to meet domestic needs, so now prices are starting to rise even in the segment of average and low-quality apples,” the FAO expert adds.
For more information: east-fruit.com