Global Overview of the Fruits Industry

The US, Europe, and Asia are expected to produce over 70 percent of the global fruit supply. Highest growth can be expected in the minimal processed sector, with APAC having the highest CAGR, owing to increased demand for convenient food and rise in the living standard

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Procurement Insights Based on Seasonality

Prices can be expected to be the lowest during harvest and post harvest periods and higher during off season. Ideally, buyers could capitalize the low price periods and procure a higher share of their raw material requirements and secure contracts that ensure a steady supply throughout the year, as bulk buying would incur additional costs, such as cold storage and inventory maintenance and spoilage losses. The buyer should also anticipate the surge in demand during the harvest periods, which could push the prices slightly up and plan their procurement strategy accordingly.

Supplier Identification Parameters

  • Spot markets, contract suppliers, and contract farmers are the common procurement channels for the fruit processors while exporters usually use spot market and contract supplier sources. Contract farming is popularly viewed as a secure source of raw materials by food processors/manufacturers. However, the lack of structure in managing linkages with small farmers, especially in developing countries is a challenge faced by the industry

Apples Global Supply–Demand Analysis 

  • Apple production witnessed a steep growth in the past five years, with supportive weather and steady demand.However, supply in 2017 witnessed a downturn of about 1.5 percent, owing to adverse weather, like drought and excessive dryness in regions, like Europe and parts of Asia
  • European apple production is witnessing a significant increase at 12.6 million tons, up by one-third from the previous year’s supplies, driven by a surge in output from Poland
  • Low production cost and large-scale production makes Poland a leading producer and supplier of apples, globally However Poland’s production is expected to drop by 23 percent in 2017-18 due to spring frosts
  • Consumption of fresh fruits, on the whole, is displaying an increasing trend. However, the consumption/demand for apples individually remain largely unchanged, which could be attributed to the availability of a variety of other fruits in the market 

Apples Global Demand Analysis 

  • The increase in consumption of fresh apples by 14 percent and lateral decrease in consumption for processing by 10 percent, reflects the widening gap between apples for fresh consumption and processing in the past five years
  • About 40 percent of processed apples in the US is utilized by the juice sector, which is a decrease from previous years 
  • An overall lowering in demand for processed fruits can be attributed for the reduced demand of industrial apples. A surplus stockpile of apples is expected in 2017
  • In the processed apples sector, marginally processed, frozen-cut apples are expected to increase in demand, whereas, the juice sector is expected to display a declining trend in the upcoming years  

Apples - Global Trade Dynamics 

Owing to the ongoing US trade conflicts, India has imposed a retaliatory import duty of 75 percent on US apples. Regions, like China and Mexico, who are also impacted by US trade negotiation outcome, are turning to Polish suppliers, who are currently witnessing a surplus supply situation

  • Owing to a record crop expected from New Zealand in 2017, exports from the country is likely to witness a boost, especially to markets like Taiwan, apart from the traditional US and Europe markets
  • A good crop year in Brazil, due to good growing conditions after two years, is expected to increase exports from Brazil in 2017
  • Exports from Poland have plummeted since 2014, due to Russia’s ban on the import of fruits from EU. Export in 2017-18 id expected to reduce due to decrease in production
  • This has called for Poland to scout for new markets, with Asia being a top prospect.
  • India has also lifted its restrictions on the US apple imports imposed in September 2015, thereby facilitating trade