Apple outlook 2011 Philippe Binard World Apple and Pear Association ( WAPA ) Freshfel Europe

World Apple and Pear Association ( WAPA) WAPA ( 2001 ) = world umbrella organisation for the apple and pear producing countries = global forum of discussion for issues affecting apple and pear production and trading Incorporating the 18 leading apple and pear producing countries around the world both in the Northern Hemisphere (Europe + USA) and Southern Hemisphere Governance : rotating presidency and secretariat – President: Kevin Moffitt (USA) – Vice-President: Peter Beaven (New Zealand) – Immediate Past President: Alessandro Dalpiaz (Italy) – Brussels based secretariat

WAPA : mission & achievements Improve transparency by facilitating exchange of information on production and trade of apple & pear Platform for dissemination of sound science relating to apples and pears ( nutrition,health benefit, organoleptic,... ) Facilitate internationally the market position of apples and pears by exchanging best practice on promotion/communication

APPLE MARKET REVIEW 2010/2011

Market Review 2010/2011 Prognosfruit forecast – 35 th edition – cooperation with 21 organizations & WAPA-AMI support – August forecast + update in September & December – August Y+1 = consolidation/validation => great accuracy of figures ( 1% variation ) 2010 : one of the lowest apple crop of the decade at 9.6 Mln T, combined with the lowest pear crop ( 2.2 Mln T )

Market Review 2010/2011 Main parameters of the season ( volume ) : – Late start – No NH stock nor SH overlap – Increasing demand in Eastern Europe ( low crop in Poland ) and strong demand in Russia ( total import = 1.2 Mln T) – Small imports volume from SH in the EU( ca T ) – Supply balance => lower fresh consumption at 18.1 kg/capita t2007/082008/092009/102010/11f Market production Import EU 1) Export EU 1) = Consumption 2) Per capita (kg)18,422,020,718,1 Source : AMI

Market Review 2010/2011 Main parameters ( price ) – Lower fresh consumption level but higher price for fresh markets => from average €1.28/kg to € 1.35/kg – Price for apple juice concentrate recovering sharply Source : AMI Source : Agrana

OUTLOOK 2011 : EU-27 AND OTHER EUROPEAN COUNTRIES

2011 crop forecast : EU T => T ? ( PL, IT, UK,...=+; BE= -) Cover 21 MS out of 27 ranked 7 th in the decade overview +5% to last year, - 5% to 3Y average and -4% to10Y average Year Production in ‘000 T /

2011 crop forecast : EU-27 Member StatesF Poland Italy France Germany Spain Netherlands Romania Hungary Belgium Portugal Greece UK Austria Slovenia Czech Rep Lithuania Bulgaria Slovakia Denmark Sweden Latvia Poland back as n° 1 producing country

EU -27 forecast 2011: comments ( production ) Orchard & production – Stable in most of the countries ( ca Ha for EU-27 ) – Some shift to most resistant varieties ( RO, SLO, … ) or grubbing up to be replaced by stonefruit ( North Spain ) or pears ( Benelux) – 2011 production split East 1% up ( PL recovery ) but expected higher volume move from West to East due to short production in HU,.. Varieties : – Golden by far n°1 at 2.5 Mln T ( + 5%) – Peak crop for Cripps Pink ( T), Fuji ( T) while Gala is gain over 1 Mln T – On-going growth of new varieties, including in particular club varieties ( Junami, Kanzi, Rubens,…) – Decline for Idared, Jonagold, Red Delicious, Morgendurf,..

EU -27 forecast 2011: comments ( varieties ) VarieitesF Golden Delicious Gala Red Delicious Jonagold Idared Elstar Granny Smith Braeburn Shampion Fuji Jonathan Jonagored Cripps Pink Gloster Reinette Grise du CND Lobo Bramley 9195 Cox Orange Morgendurf/imperatore Cortland Boskoop Annurca Red Jonaprince Pinova Stayman Spartan 568

EU -27 forecast 2011: comments ( weather ) Earlier crop in most of the regions – UK up to 3 weeks anticipation : Discovery and Windsor on shelf end of July – Other countries : 1 or 2 weeks – Italy : anticipation reduced Climatic conditions – Overall good across Europe – Strong wind in PT – Significant frost damages early May in HU, CZ, RO and part of Germany. More limited impact in PL and – Low t° and rain in GR leading to low crop – Hail damages in North IT, BE => increased volume to processing Jonathan -21%

EU -27 forecast 2011: comments ( quality ) Quality : overall good – Warm spring, « cold » and rainy summer in North and West – Limited disease damages – Size : medium to large – Good coloring – Frost damage : mainly in Eastern part of Europe – Some damage due to hail ( part of Italy, France,… => additional volume to processing ) – EU organic production up by almost 20% at T

2011 crop forecast : Other European countries Balkan : T Strong data improvements from Balkan region: Serbia, Croatia, Bosnia, Macedonia Ukraine: production is moving over 1 Mln T development of Golden ( T), RenetSymyrenko ( T) and Jonagold ( T) favourable conditions during blossom some frost in Southern part with limited impact & some local hail larger fruit size than usual & harvest date as usual Turkey : 2.4 Mln T – one of the largest production potential in European area 87% for fresh domestic market consumption, 3% for fresh exports and 10 % for juice. Limited import. Other Europe in ‘000 T Var in% Albania45487% Belarus150 20% Bosnia5248-8% Croatia9592-3% Macedonia % Moldova % Russia % Serbia260 0% Switzerland % Turkey % Ukraine % Total Other Europe %

European region Mln T 0.2

2011 crop outlook : Tentative global balance 2011 Southern Hemisphere supply (WAPA Berlin) 1% down at 5.2 Mln T EU : + 5% at 10.1 Mln T Other Europe : + 4% at 6.5 Mln T North America : USA slightly up ( +2% ) Canada down ( - 6%), Mexico significantly up by 20% China : trends up again to 33 Mln T ? => Globally, world apple supply 2011 estimates could be up by 5% for surveyed countries ( =90% of world apple production ) Southern Hemisphere Var Argentina % Australia % Brazil % Chile % New Zealand % South Africa % Total %

In Mln T per region World apple production 65 Mln T +

MARKET OUTLOOK

EU Market outlook : stocks – Almost cleared for fresh apples EU 1st July (less than T) – USA : same USA – AJC :no stocks, strong start but EU East : low crop EU West : good quality and good size for fresh market Apple Stocks (Ton) %2011/20 10 Moved 2011 Moved 20101/07/20111/07/20101/07/20091/07/20081/07/2007 Austria (Steiermark)-19,9% Belgium-50,9% Czech Republic Denmark France-4,6% Germany-56,7% Italy-1,9% Poland-100,0% Portugal 000 Spain (Catalonia)-22,7% Switzerland3,4% The Netherlands United Kingdom-33,3% TOTAL-27,0%

EU Market outlook : international trade ( import ) – EU Import : 551 Mln € ( value 2010 ) – SH exported more in total ( 1.7 Mln T ) – but moderate volume to Europe EU main suppliers 2010in 000T Chile176,5 New Zealand126 South Africa112,7 Brazil70,7 Argentina46,5 USA20 Macedonia13,9 China10,9 Croatia2 Uruguay1,8 Canada1,5 Bosnia1 1 2

Apples Remarks: Southern Hemisphere production is stable at 5.2 Mln T Export planned to be up by 5% but export to Europe seems declining => market diversification Southern Hemisphere Var Argentina % Australia % Brazil % Chile % New Zealand % South Africa % Total % SHAFFE / WAPA pear production forecast Berlin February 2011

EU Market outlook : international trade – EU Export : 558 Mln € ( value 2010 ) – Uncertainties : SPS, world economy, strenght of the € ….. – Russia : Safety certificates maintained for apples from BE, DE, EL,FR, HU, IT, NL, PL – Market demand in North Africa : Algeria, Egypt,… – SPS protocol negotiation EU Destinationin 000T Russia563 Ukraine195 Algeria89 Belarus43 Lybia42 Saudi Arabia37 Norway34 Kazakhstan31 Emirate25 Morocco13 Turkey13 Bosnia11 Switzerland10 Egypt9 Malaysia9 Croatia8

EU Market outlook : domestic market Overall positive given moderate apples crop & perspective of 1 to 2 weeks more for marketing and good kick off condition (no stocks or SH overlap ) but : – Economic situation – affecting consumer confidence – EHEC crisis and image of fresh produce category – Stagnating apples consumption – Poor market conditions for several fresh produce across Europe ( stonefruits, citrus, bananas …. ) – Heavy price competition and return to growers – More intra trade from West to East ( ?) – shortage in HU, CZ, RO, no bumper crop in PL -demand from AJC – Pear crop up- overall EU apple & pear +6%

EU Market outlook : regulatory issue Monitoring import licences – removed as of 1 September ( Com Regulation 669/2011) but – TAXUD and Eurostat data remaining available & SHAFFE monitoring is on-going Morpholine (Regulation 1333/2008 ) – Not registered as additive in the EU => use is forbidden – On-going discussion for setting a cross contamination level ( at 0.3 ppm, ) Status DPA – Being phased out unless new registration is requested ( Com Decision 2009/859 ) – MRL status unclear ( Com Regulation 149/2008) Commission proposal to move to detection level but process of discussion and adoption is at least 9 months - consequences of persistant effect if detection level also for EU growers – non regulatory requirements to be taken into acount Different MRL to be considered if new registration succeeds

CONCLUSION

Key points Mixed parameters but hopefully a positive outlook for 2011/2012 : Positive elements for the season: – “Moderate low” crop – Early start on a clean background – Good quality and size for fresh market – Demand for the AJC industry Negative elements for the season: – Complex fruit and vegetables markets – Market price and return to grower – Uncertainties about Russian market – Economic uncertainties – Stagnating consumption Prognosfruit 2012 : 3-4 August 2012 in Toulouse ( France ) with

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