European apple shortage leads to steep price hikes
A weak euro, rising shipping costs and smaller sized Southern Hemisphere fruit have contributed to a massive undersupply of apples in the European market.
Prices at the end of last month rose to €1.2 (US$1.5) per kilo (2.2lbs), which is much higher than normal for this point in the season.
Total Produce's top fruit buyer for Ireland Kevin Finn, said demand was outstripping supply.
"There's not too much volume of large fruit from Chile and South Africa because of the currency; it's more attractive to send to dollar countries such as the U.S., Middle East and Asia.
He said Chile had exported a greater share of apples to the U.S. this season because the country had low levels of domestic supply for red varieties.
Finn said increased shipping prices for Chile and New Zealand had also been an influence, in addition to the weak euro.
"It's hard to blame the growers, they follow the money. There are less smaller growers and the demand for apples globally outstrips supply. And it doesn't look like it's going to be any different over the next few months."
Poupart Imports managing director Jonathan Olins, said the market had been surviving on late European supply but this could not continue for much longer.
"Quantities from Chile have been restricted because of the high temperatures they had earlier. They have had some supermarket rejects and they don't want to take the risk because they can get better prices in nearer markets," said U.K. based Olins.
Chile's heatwaves in January and March have affected the quality of fruit, particularly Braeburns.
Finn said Brazil was now selling more of its apples locally and noted the same trend was happening in South Africa.
"Wages are increasing in these countries so they can afford to buy fruit, and because these markets are getting stronger producers don't have to export so much."
C G Timmermans owner Jan Timmermans, who is based in the Netherlands, agreed there was less supply from Brazil because its domestic market was so strong.
He estimated market supply in Europe this season is 30% lower compared with the same time last year.
"The Southern Hemisphere was not willing to send at any price, they wanted guaranteed prices and looked to other markets such as Asia and Africa."
Related stories: More Chilean apples go to the domestic market in 2012
Severe large gala shortage paves way for apple premiums, says Oppy
Subscribe to our newsletter
