The harvest forecasts made by the various professional organisations report an overall increase in Southern Hemisphere production, from around + 4 % to + 10 % on 2016 depending on the sources (5.2 million tonnes according to WAPA figures). However the situations vary greatly between the origins. Argentina is encountering serious difficulties, as is Brazil though to a lesser degree. South Africa and Chile are holding up thanks to the diversification of their customer portfolio and development of their range. However New Zealand has come off best in recent years, thanks to the Asian market which has helped it expand its production, although growth is starting to slow down there too.
The very good returns from recent years have helped New Zealand’s producers continue to invest in planting modern varieties aimed at the Asian markets, among other targets. The planted surface area was reportedly up this year by 4 % from 2016, reaching 9 500 ha. Last year, production exceeded 540 000 t thanks to favourable climate conditions and despite a negative production trend, while the new orchards had not yet reached maturity. Exports followed the same trend (+ 5 % in 2016), especially thanks to the qualitative improvement in production which helped achieve a higher percentage of products meeting the export standards. Shipments to the United States increased, building on the origin’s very fine performance in 2016 (48 000 t, i.e. + 52 %), and also to Taiwan (32 000 t, i.e. + 45 %). Conversely, shipments to the European market barely held up (117 000 t), and actually appear to have dropped for the Middle East (- 5 % for the United Arab Emirates) and for Asia (- 39 % for Thailand, - 11 % for India and - 8 % for Hong Kong).
South African surface areas have also expanded in recent years (24 000 ha), though growth is now less marked (+ 1 % on 2016). However, the production potential is on the increase (980 000 t, i.e. + 3 % on 2016 and + 13 % on the 3-year average), thanks to young orchards entering production and to fairly favourable climate conditions, although the origin is facing recurrent drought. Exports rose again last year (+ 3 % in 2016), given the availability, the weakness of the rand and strong demand from other African countries. However, tonnages to Europe dropped (- 8 %), though they remained close to 100 000 t, while they stagnated for Russia, the Middle East and South-East Asia.
Surface areas have been eroded in Chile, with the lowest-yielding plots converted to other crops such as the cherry. The fall should be mitigated this year (- 1 % on 2016 and - 4 % on the 3-year average). So production is struggling to exceed 1.67 million tonnes, and exports are currently below the 700 000-t threshold. Exports rose again last year to Europe (124 600 t, i.e. + 12 % on 2015) and to the United States (105 700 t, i.e. + 35 %), though without regaining previous levels. Growth is slower in the Middle East or South-East Asia, although certain countries such as Saudi Arabia and India are still exhibiting strong demand. Furthermore, shipments to neighbouring South American countries are stagnating.
In recent years, the situation has deteriorated most of all in Brazil and Argentina, with their fruit sectors steadily losing competitiveness on the international markets since 2007. The economic situation has deteriorated year on year for producers, as production costs continued to increase and revenue decreased.
In Argentina, the rampant inflation of labour costs (20 to 30 % per year) and a relatively uncompetitive peso have weighed down on prices considerably. The fall in profitability of the sector has gradually reduced planted surface areas (21 500 ha in 2017, i.e. - 2 % on 2016), especially in the main fruit-producing region Rio Negro, as well as Neuquen and San Juan provinces. In Mendoza province, land traditionally used for apple production has been converted to the wine grape and other more profitable crops. Small producers have of course been the hardest hit, with some having to sell their plantations to bigger producers or to packers/exporters. However, if the plantations were in poor phytosanitary condition or yields were insufficient because of the lack of financial resources to apply phytosanitary treatments (approximately 30 to 40 % of all plantations were not pruned in 2016, especially for apples), the land has been bought up for real estate projects. Even the big companies are having to streamline their infrastructures. The origin is also being abandoned by foreign investors, discouraged by economic losses. Argentinean apple exports are constantly declining, reaching their lowest level in 2016 (100 000 t, i.e. - 19 % on 2015), with just 14 300 t bound for Europe (120 000 t in 2005), with the rest split between South America (Brazil, Paraguay), Russia and the United States.
In Brazil, surface areas are continuing to fall (34 000 ha, i.e. - 2 % on 2016) because of economic difficulties (lower returns and increasing production costs, European market saturated) and the severe climate conditions in recent years. Hence producers have again uprooted low-yielding old orchards to plant other crops. Similarly, exports saw a steep drop in 2016, given a production shortfall and poor sizing. They fell to 30 000 t (- 49 % on 2015), with half bound for the European market (16 700 t, i.e. - 53 %, as opposed to 122 900 t in 2003) and 30 % shipped to Bangladesh, now the no. 2 destination for Brazilian apples. Just under 10 % of tonnages were taken in by the Russian market.
In this competitive context, the countries that have held up best are those that made the right varietal choice at the right time, rather than those that were competitive, since this concept is too volatile. New Zealand has a particularly strong dynamic, with its planted stock still dominated by the Gala variety (30 % of tonnages). Surface areas of this variety are holding up thanks to a renewal with highly coloured clones, and a whole range of varieties has been rolled out in recent years, such as Jazz which makes up 9 % of New Zealand’s stock and Cripps, making significant progress (6 %). Yet the expansion in surface areas is due above all to planting the Pacific range (11 %), especially Pacific Queen which is currently the most planted variety, along with Envy. Other varieties such as Aztec, Fuji Supreme, Kiku and Candy are gradually replacing the traditional Fuji. New cultivars such as Smitten, Plumac (Koru brand), Sweetango, Ambrosia and Kansi are also being planted.
The South African stock is distinguished by an atypical range dominated by Golden (24 % of production), which remains the leading variety planted by producers, ahead of Granny (18 % of tonnages). There are also bicoloured apples such as Gala (16 %), Cripps Pink (10 %), Cripps Red (3 %), Fuji (9 %), Braeburn (3 %) and club varieties such as Kanzi or Jazz.
The renewal of Chilean stock in recent years has led to a gradual modification of the range, now dominated by bicoloured apples with Gala leading the way (54 % of volumes as opposed to 30 % ten years ago) and then Cripps Pink (9 % as opposed to 4 %), while the share of Granny has fallen to 10 % and that of red apples to 14 %. The new planting involves above all clones of these bicoloured applies, with the objective of staggering the production period.
Conversely, the Argentinean stock has still seen little change, with red varieties dominating the assortment (55 % of production), far ahead of Granny (18 %) and Gala (14 %). Similarly, the Brazilian range remains focused on two emblematic varieties: Gala (55 % of production) and Fuji (40 %). The other varieties represent just 6 % of volumes, though Eva has been planted in recent years.
The prospects for the 2017 campaign are a bit brighter than in previous years, with the Europe-wide stock of apples as at 01/03/2017 slightly smaller than last year (2.83 million tonnes, i.e. - 3 % on 2016) and a good production potential for most of the Southern Hemisphere origins, including for Brazil which should return to production. We should also note that the European market seems to have healed, after the steep fall in recent years (- 4 % on 2015, as opposed to - 15 to - 20 % in previous years). However, while the first volumes arrived in Europe in late March, the start of the trading campaign could see a bit of a slow start, like last year when the market only really switched to the Southern Hemisphere origins from mid-May. Similarly, the switch was late last year for Granny, with interest only picking up from June. Conversely, the Pink Lady campaign is for the moment still beginning at around the same period, with the European campaign ending in mid-May. Hence New Zealand’s exporters hope to be able to increase their shipments, with a harvest up by 6 % from 2016 (572 000 t), though an outlet still needs to be found. South African exports could rise by 2 to 4 % in 2017, depending on the sources, to reach around 435 000 t. Chilean producers are anticipating a fine harvest (1 675 000 t, i.e. + 2 % on 2016), yet uncertainty remains regarding the level of shipments (between 659 000 t and 750 000 t, depending on the sources). Argentinean exports should remain hard hit by the economic difficulties, and at best climb by 2 %, or even by up to 10 % depending on the sources, i.e. between 100 000 and 110 000 t. Brazilian producers are hoping to be able to regain their 2015 level, i.e. approximately 60 000 t
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