Sad24 has responded to an EastFruit article explaining why restricting imports of apple juice concentrate from Ukraine is not in Poland’s economic interest. Unfortunately, the response is either openly populist or simply economically ill-informed. It is therefore worth explaining in simpler terms how prices for apple juice concentrate and processing apples are actually formed in Poland and on the global market.
If we ignore market economics and the way the industry actually operates, the question sounds perfectly logical: if Poland produces millions of tonnes of apples every year and 50–70% of the crop goes into processing, why should Polish processors also need cheaper concentrate from Ukraine?
This is the simplified logic used by Sad24.
The market, however, works differently.
First, imported Ukrainian apple juice concentrate and Polish processing apples are not always direct substitutes. Poland’s processing industry operates in a global market. The European Commission notes that 60–70% of Poland’s apple crop is used for processing, around 90% of the concentrate produced is exported, and imported concentrate is blended with Polish product.
This means that reducing imports of Ukrainian concentrate does not automatically result in more Polish apples being processed. In many cases, the missing volume will simply be replaced by concentrate from Türkiye, China or another supplying country.
This is the first problem in Sad24’s argument.
If imports from Ukraine are subject to a high tariff or restricted by a quota, Polish processors have to buy a more expensive alternative and often face higher logistics costs as well. But the global price of apple juice concentrate does not rise simply because Poland imposes a tariff.
It may even come under additional pressure. Ukrainian producers that sell less concentrate to Poland can redirect more of their product to markets where Polish suppliers are already active, including the United States.
Polish processors therefore continue to compete for the same buyers with suppliers from China, Türkiye, Ukraine and other countries.
Higher input costs reduce processor margins and, as a result, reduce the amount of money processors can afford to pay for domestically produced processing apples.
The maximum price a processor can pay a Polish grower is determined by the selling price of concentrate after deducting the cost of imported inputs, processing, logistics and financing. What remains must cover both the purchase of apples and the processor’s margin.
A protective tariff introduced supposedly in the interests of Polish growers can therefore produce the opposite effect and reduce the price a Polish processor is able to pay for Polish processing apples.
This does not mean that every additional cost will automatically be passed on to growers. Processors may absorb part of it through lower margins or compensate elsewhere. But the economic pressure is clearly in that direction.
There is also a broader fiscal effect. Lower corporate profits mean lower tax revenues and fewer resources that could potentially be used to support horticulture.
Reas also: How Poland and the EU Lose Tens of Millions by Restricting Ukrainian Apple Juice Concentrate
There is, however, a much more important issue.
Sad24 repeatedly stresses that Poland has so many apples of its own that 50–70% of the crop goes into processing. But is this really evidence of a strong apple industry?
Or should it raise a much more uncomfortable question: why does one of the world’s largest apple industries regularly send most of its crop into the lowest-value segment of the market?
A modern and highly productive apple industry should normally work differently. Apples are grown primarily for the fresh market. They are then graded and sorted, and the relatively small share that does not meet fresh-market standards is diverted to processing. The objective should be to keep that share as low as economically possible.
If 50–70% of the crop systematically goes into processing, the industry risks developing a very different model: producing huge volumes of low-quality apples that can mainly be sold as raw material for processing.
This raises an obvious question. Why should Poland devote so much land, labour, energy, fertiliser, crop protection products and other resources to producing apples worth five or ten times less than fresh-market apples?
This is not necessarily evidence of a strong processing industry. It can just as easily be a symptom of structural weakness in the apple sector itself.
That brings us back to attempts to artificially increase the price of low-quality processing apples.
Even if such a strategy worked, the underlying logic would still be questionable. Higher protected prices for processing apples reduce the pressure on growers to renew orchards, improve varieties and fruit quality, increase productivity and marketable yields, invest in storage and grading, and raise the share of fruit that can be sold on the much higher-value fresh market.
Protecting the weakest part of the system can therefore slow the transformation of the entire sector.
If this still seems unconvincing, Poland and Italy provide a useful comparison.
Poland produces significantly more apples than Italy, yet Italy is the world leader in fresh-apple exports and continues to strengthen its export position, while Poland has been losing ground in the global fresh-apple market.
At the same time, Italian growers generate substantially more revenue per hectare of apple orchards and do not demand protection from cheaper imported apple juice concentrate. Their business model is built around the value of marketable fresh fruit, varieties, quality, storage, packing, branding and exports.
In the short term, restrictions on Ukrainian concentrate can mean more expensive alternative imports, higher production costs for Polish apple juice concentrate, lower processor margins and stronger pressure on the procurement price of Polish processing apples.
At the same time, Ukrainian producers that lose access to part of the Polish market can increasingly compete directly with Poland in the same finished-product markets.
In the longer term, efforts to protect the price of processing apples create an even more serious problem. They help preserve an economic model in which too much of the crop remains low-value raw material for processing.
This creates a vicious circle: a low share of marketable fresh fruit, heavy dependence on processing, pressure on processing-apple prices, demands for more protection and weaker incentives to modernise.
So, if the issue is framed honestly and economically, the question should be very different.
Not: “How can Polish growers be protected from cheap Ukrainian concentrate?”
But: “How can Polish growers become productive enough, and produce apples valuable enough, that their prosperity no longer depends on whether processing apples are worth a few groszy more or less? How can they focus on selling valuable, marketable fruit rather than low-value raw material and waste?”
Processing should be an important and profitable part of the apple industry. But it should play a supporting role rather than form the foundation of the entire economic model.
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