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Apple prices in Ukraine surged – what’s the longer term price forecast?

EastFruit analysts would like to draw attention to the sharp increase in prices for fresh apples in Ukraine over the previous week. Prices for Gala and Golden Delicious apples jumped by 50% in single week! What are the reasons for such an unprecedented price rise?

“Producers expect a further increase in apple prices this season, so they are trying to put as much high-quality apples into fruit storage as possible. Last week, offer of cheap low-quality apples which cannot be stored has decreased, which c in prices. Also, a sharp increase in wholesale prices for bananas in the recent week on the Ukrainian market made a certain contribution to the rise in apple prices. The third factor is the growth in demand for Ukrainian apples on the foreign market, which made it possible to boost export shipments to markets where prices are much higher,” says Yevgen Kuzin, international consultant at FAO.

If we compare apple prices now with those in previous years at the same time, then they are indeed record high in hryvnia, and are 67% higher than last year!

And even if measured in US dollars, prices are still record high and even higher than in 2019, when the harvest was low, and prices were high. However, we should not forget that a dollar in 2019 and a dollar in 2023 have very different real values, because in recent years the world has experienced unprecedentedly high dollar inflation, which has devalued even this global currency. Therefore, in real terms Ukrainian farmers aren’t really getting more money than in 2019 or 2020.

Why are apple prices in Ukraine record high?

Record higher prices for apples were a result of by several factors coming together. By the way, EastFruit forecasted this development of events and described in detail the factors that could affect the market back in August. In that article we specified that apple production in Ukraine in 2023 was likely to decline.

The second factor is a sharp decline in apple production in the European Union and, in general, very positive news from different regions of the world supporting global apple prices, which we described in detail in another longread. By the way, since then the forecast for apple production has been reduced even more, which was very bullish news for already positive the global market.

The third factor is the rise in prices for apple juice concentrate (AJC) and a sharp increase in demand for apples for processing. In this analytical article, we explained in detail the prospects for growth in the price of industrial apples and how much this growth will stretch over time, and, so far, the forecasts are coming true. By the way, in Poland, prices for industrial apples are rising almost daily, and Ukraine is accused of supplying apples for processing to factories in Poland.

“Ukraine does export industrial apples, but the main volumes of apples for processing go not to Poland, but to Austria, where prices are even higher. At the same time, procurement prices for industrial apples on the domestic market also began to increase, because there are now serious difficulties with the procurement due to a shortage of transportation and entrepreneurs who were previously involved in buying such raw materials from the households,” says Andriy Yarmak, economist at the FAO Investment Centre.

What about apple prices in the markets of other neighboring countries and how does this affect the Ukrainian market?

In Poland and Moldova, two large neighboring exporting countries, apple prices also began to rise. At the same time, prices in Moldova are now even lower than in Ukraine, because there are problems with apple exports to the Russian market. As a result, Moldova, which previously supplied apples almost exclusively to Russia, is gradually becoming an important competitor to Ukraine in the markets of the Middle East.

In Poland, prices are higher than in Ukraine, and apple price growth there is also accelerating. In the context of high prices in the EU, Poland expects pressure on prices on the domestic market to ease this year.

Where does Ukraine export apples now?

Currently, Ukrainian apples are most widely exported to the markets of the Middle East. The main buyers of apples from Ukraine remain the UAE and Saudi Arabia. Significantly smaller exports were noted to Iraq, Qatar, Oman, and Kuwait.

Interestingly, despite the recent completion of the apple harvesting in Uzbekistan, this country has also already begun to import large volumes of apples from Ukraine. EU countries are still less active in purchasing Ukrainian apples, but quite significant volumes have already been sent to the Netherlands, Sweden, and a number of other EU countries, not counting the supplies of industrial apples to Austria and Poland, which have already been mentioned.

Will apple prices rise in the near future?

“This week prices for Gala apples in Ukraine will decline somewhat, as demand on the domestic market has decreased after the rapid rise in price. However, the decrease is estimated at 1-2 UAH/kg, and in this case, current prices in hryvnia are still much higher than in recent five years,” explains Yevgen Kuzin.

However, season 2023/24 is exactly the unique case when it is quite easy to make a longer-term forecast for apple prices. Prices will definitely rise, and their growth may be quite rapid with some periods of stabilization.

The main factors for price growth are described above – these are, first of all, external factors. Therefore, we should expect that the consumer will have to pay for an apple in the winter-spring period as if it were some kind of exotic fruit, because even bananas, the prices for which are usually relatively stable, are now also actively rising in price.

And if apple prices are high, then it is possible that Ukrainians will begin to more actively try various exotic fruits. Let us remind you that we recently prepared a very interesting article about the top 10 most unusual exotic fruits that are rapidly gaining popularity.

EastFruit

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