According to EastFruit analysts, Georgian apple market participants are perplexed by the fact that apple prices remain incredibly stable, although, as a rule, there is a seasonal increase in prices at this time.
If you look at the prices for apples of popular international varieties such as Golden Delicious in local currency, Georgian lari (GEL), they seem incredibly low – almost as in 2019 when apple prices reached record lows in all European countries. By the way, it is the “Golden” that accounts for the bulk of apple consumption in Georgia.
However, the picture is better for prices in dollars – the Georgian lari has strengthened very much lately. Therefore, as we can see, apple prices in dollars are at the average level for the last five seasons.
And if we compare the wholesale price for apples in Georgia with those in Ukraine, Moldova, and Poland, it becomes obvious that Georgia can successfully import apples from these countries, as it is currently doing. After all, wholesale apple prices in Georgia are now twice as high as in Moldova, Ukraine, and Poland.
Meanwhile, local producers are experiencing difficulties selling their apples still in storage. Importers also talk about the quite slow sales of high-quality imported apples.
What is the reason for the low demand for good-quality apples? Perhaps their prices should decrease to stimulate demand? After all, a lot of seasonal products of the new crop will become available on the market soon and demand will fall even more.
Several large market participants say at once that the main factor that affects the apple market this year is the “Kekhura factor”.
What is “Kekhura”?
Kekhura is an old Georgian apple variety that has been known in the country for a very long time. However, the local population is no longer loving it, preferring, for example, the abovementioned “Golden”. Indeed, over the past 20 years, many new orchards of promising apple varieties have appeared in the country.
At the same time, a lot of Kekhura apples are grown in Georgia. The thing is that the apple tree of this variety is very unpretentious, and productive. Apples of the Kekhura variety have a beautiful red color, and, most importantly, they are well stored even in cellars.
As a rule, not very tasty apples of the Kekhura variety were sold for export to Russia when prices there began to rise in the second half of the season. Unspoiled consumers that have little knowledge of varieties there paid a high price for them – the main thing is that apples look good.
However, due to a sharp decline in the income of Russians this year and major problems with logistics between Georgia and Russia, the demand for Kekhura apples has fallen sharply. As a result, the population is forced to sell stocks at extremely low prices in the domestic market. If there are large volumes of cheap apples on the market, despite their poor taste, it is quite difficult to raise prices for good-quality apples of popular varieties.
Therefore, some Georgian growers say they are starting to doubt the possibility of selling all the apple stocks before the end of the season. They believe that the current stocks of apples in the fruit storages of Georgia are at a record high, and they do not exclude that apples of the 2022 harvest will have to be sold before the end of June or even until mid-July.
By the way, the Georgian government supports the cultivation of unpromising apple varieties and slows down the transition to raising apple quality standards by offering subsidies for non-standard apples or apples with defects. At the same time, there is no incentive to grow good-quality apples, which distorts the motivation of growers.
However, the “Kekhura factor – 2023” will probably contribute to the further development of Georgian horticulture and will force the eradication of at least part of the orchards with this old and unpromising apple variety on the market. This year, Georgian apples hit the markets of the Middle East for the first time, which means that Georgia is capable of growing and exporting high-quality and expensive apples to countries with high-quality requirements.
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