June 06

June 2006, World Apple Report Highlights

Great Unanswered Questions
Millions of words are spilled each year talking about the apple industry's problems. For all of the talk, some of the biggest questions remain unresolved. Among these, some of the most important are: 1. The industry is producing too many apples. 2. Consumers don't want much of what the apple industry is producing. 3. Consumer demand for apples is stagnant or declining. 4. Apples are getting drowned in a sea of competing products. 5. We are all supposed to be eating healthier. Why are we not? This article goes on to discuss other great unanswered questions such as how to deal with China, the increasing demands of retailers, pressure from consumer activists, increasing labor shortages and a final question, Is anyone responsible for the good of the apple industry?

New Excitement in Organics
Plans by discounters like Wal-Mart in the U.S. and Aldi in Germany to expand their organic offerings are bringing new excitement to the organic sector. Natural food chains such as Whole Foods and Wild Oats have been growing rapidly and mainstream retailers like Tesco and Safeway have been expanding their organic lines. This expanded retail interest could boost demand for organic produce. However, it raises a number of questions. It is not easy to rapidly increase supplies of perennial fruits like apples and pears. If supplies are increased, will retailers be willing to pay premiums of up to 50 percent for organics. Where will they wish to set their retail price points? And, as organic offerings increase, at what point will consumers become resistance to paying premium prices?

Rebound of the Soviet Empire?
The Soviet empire collapsed and fell apart in the 1990s. However, since the turn of the century, the Russian Federation, its largest part, has staged a remarkable economic recovery, fuelled by high prices of oil and other commodities. Since its domestic production of fruits is limited and of poor quality, Russia has become one of the leading importers of many fresh fruits. One problem is that Russia tends to pay less for its imports than other major importers. It has also become more erratic in its import controls, adding much uncertainty to the market. Russia will have a significant influence on the world apple market in the next few years.

Special Statistics
Russian Federation: Imports of Fresh Apples and Fresh Pears, 1992-2004 (table).
Index of Prices Paid by U.S. Agriculture, April of Each Year, 2002-2006 (chart).
Trends in Area Harvested of Apples and of All Fruit, 1969-2005 (chart)

The authoritative guide to the world apple business today.

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