Dec 8, 2014
Russian ban leaves apple exporters scrambling for new markets

Russia was on everybody’s mind at Interpoma.

On Nov. 20, speakers at the international apple conference held in Bolzano, Italy, discussed the world’s shifting apple markets. Many topics were covered, but Russia’s decision last summer to stop buying certain products – including apples – from the European Union was a repeated theme. It will have a major ripple effect on world apple markets for the 2014 crop – and possibly beyond.

Russia is the world’s leading importer of apples and Europe the world’s leading exporter, according to the World Apple and Pear Association (WAPA). Russia imported 1.2 million tons of apples last year, said Dominik Wozniak, who spoke on behalf of Poland’s Rajpol Cooperative. If not from Europe, where will those apples come from?

Helwig Schwartau, head of the horticulture division for Germany’s Agrarmarkt Informations-Gesellschaft, said they might come from Turkey, which traditionally exports its apples to the south. China also is a strong possibility, he said.

China is the world’s biggest apple producer by far (its 2014 crop will be about 40 million metric tons, according to an industry estimate), but it’s also the biggest consumer. No more than 3 percent of its apple crop is exported. China’s industry can adapt quickly to change, however. It could easily supply Russia’s apple needs, said Gottfried Tappeiner, a professor at Austria’s University of Innsbruck.

Russia’s ban is having a profound effect on Europe’s largest apple producer, Poland. For six decades, Russia has been the chief buyer of that country’s fruits and vegetables, Wozniak said.

The 2014 crop is expected to be Poland’s largest ever (about 3.5 million tons, according to a WAPA estimate). The country’s top variety by volume, Idared (about 20 percent of production), is mainly grown for the Russian market. It’s not popular in Poland or western Europe, Wozniak said. Since Russia is no longer buying, where will all of those Idareds go?

Poland’s need for new outlets will have a “fundamental impact” on the world market in coming months, pushing other exporters to find new outlets of their own, Schwartau said.

U.S. apple exports will probably feel the impact. U.S. exporters might find themselves battling European exporters in markets, such as Central and South America, where the Europeans haven’t had much of a presence before, said Steve Lutz, vice president of marketing for Washington state’s Columbia Marketing International.

New markets needed

The Russian ban is exacerbating a situation that has been building for years. Production levels are rising, but apple consumption in more developed markets like Europe and the United States is flat or decreasing. That combination was already forcing producers to scramble to find new markets, according to speakers.

Poland, for example, has nearly doubled its production in the last decade, with more intensive plantings and a greater diversity of varieties including Golden Delicious, Gala and Jonagold. The expansion was a result of joining the European Union in 2004 and gaining access to new markets. Unlike Russia, western Europe wasn’t interested in Idared, Wozniak said.

As far as expanding Poland’s markets, the future hopefully lies in North Africa, the Middle East and perhaps even India, Wozniak said.

Increased Polish production, as well as the Russian ban, will continue to block western European producers from eastern European markets. On top of that, Germany and the United Kingdom are increasing domestic production and are less interested in imports. These factors are driving some countries, like the Netherlands and Belgium, to switch to pears. Others, like Italy and France, are expanding apple sales into North Africa and the Middle East, Schwartau said.

There are other ways European producers can stay competitive. They can replace a diminishing supply of apples from the Southern Hemisphere by increasing their storage capacity. They also can focus more on managed varieties, such as Pink Lady and Kanzi, Schwartau said.

There might be opportunities at home, too. The Italian industry, for example, is trying to take advantage of the buy-local movement. Attempts are being made to break apples into the snack market, where they can take the place of less healthful products, Tappeiner said.

Matt Milkovich

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