Spanish apple marketers are experiencing a campaign where destocking is not working at the desired rate, in line with what is happening with the other European sources
The sector is experiencing a certain commercial slowdown which, in mid-March, maintains 18% more product stocks than those of 2019 (the comparative has not been carried out using the year of the pandemic) and the exit rate from the chilling rooms is 14% lower than the compared year.
Joan Serentill, chairman of Afrucat’s Apple and Pear Committee, explained to Fruit Today that “the Spanish market is going through a complicated situation: there are Polish and Portuguese apples at quite low prices here that are trying to become ‘nationalised’ as Spanish produce to compete with the fruit that is really produced here. It is a fraud which, although not reaching large amounts, is unfair competition for us.”
A few months ago, the Catalan employers’ association Afrucat warned that production costs had shot up by 41%, both in the fields and in the preparation centres. The Association revealed that the production price of a kilo of apples had gone from 63 cents three years ago to today’s 89 cents. These figures are directly linked to the increase in the price of energy, raw materials, labour and all the health guarantees and certificates.
Today, Joan Serentill warns “the situation is even more disturbing due to the global war context we are living through and that has magnified these costs even more.”
On the other hand, as the southern hemisphere’s season approaches “there is the possibility that the situation becomes worse because the Russian market has disappeared and exporters are attempting to place their goods in countries with spending power, but in Europe we still have lots of our own apples.”
In spite of everything, Serentill comments “we have the prospect that the shortage of freight means that a large amount of these transactions could be set aside.” The prices are impossible to take on and they reach almost 13,000 dollars per cargo, which means an increase of around 75 cents per kilo, depending on the format.
In any event, the businessman explains, the situation is not the same for all the operators. The difference is important amongst the ones that have programmes with the supermarkets and the ones that reach the market on pallets. “For these ones, the circumstances are more unfavourable. The rest of us are lucky that the supermarkets continue their order tendency and although the premium position continues to be held by Italian apples, at the moment our main concern lies in maintaining the prices.”
The reality of a product such as the apple is that the stocks in the chilling rooms must reach zero in order to be able to start the new campaign; a reality that seems at the very least complicated this season. “However much we need to send volumes out from our chilling rooms, we cannot drop the prices because that would put us outside the Food Chain Law; a law that curiously was passed to protect the producers and that is now turning against them.”
“As marketers we must be clear that the destocking rate must carry on the same and if the promotions help, we must perform them,” the Catalan representative insists.