German agribusiness giant BayWa AG (DE: BYW6) is forecasting a lower apple harvest this year, but the percentage decline will be slightly larger for the country as a whole. The marketing season began with the "lowest stocks in years", according to the company's fruit general manager Christiane Bell, who told www.freshfruitportal.com about the expected dynamics of a European winter harvest that will rise by 7% year-on-year.

How has the crop fared biologically this year compared to last season, and how has this been impacted by weather conditions?

The general conditions for fruit production were particularly difficult at the start of the year. The wet, cold and cloudy spring had a negative effect on all crops. As was the case with soft and stone fruit, the pipfruit harvest began 10 to 14 days late. Owing to the weather, apples and pears saw significantly increased flower drop and June fruit drop due to a lack of light. The cold, wet weather during blooming season caused weaker cell division, which is why growth is around 8 mm behind normal years.

Despite satisfactory fruit count, we at BayWa expect the harvest to be down around 15% on 2012. Availability of the bicolored apples varieties Jonagold, Jonagored and Elstar will be particularly limited.

Could you please describe the types of apples that have been harvested to date and where the harvest has taken place?

'The Rhine region and Rhineland-Palatinate feature two of Germany’s most favorable climates and have the earliest harvests. When it comes to ripening, the speciality crops that grow there have around a one-week head start on the cultivation areas along the Neckar river. BayWa collects its pipfruit in these regions and in the Lake Constance region, where crops tend to ripen a few days later.

We are currently in the middle of the main harvest and have around 50% of the estimated harvest on the trees already in our warehouses. Its quality, both on the surface and inside the fruit, has been very good. However, in terms of fruit size, we have seen significant deviations from normal years with some varieties.

Fuji, Braeburn and Kanzi® are currently being harvested. As far as the latter two varieties are concerned, the percentage of small fruit has been higher this year. Jonagold apples, on the other hand, have been larger due to the lower fruit density. BayWa expects the harvest to be completed by the second week of November.

Overall, what sort of growth or decline in production do you see this year?

Europe expects its apple harvest to be 7% higher than last year. We expect significantly larger harvests in Eastern Europe, whereas Western Europe will see one of the smallest harvests in recent years. Germany will see the greatest drop, with the harvest forecast to fall 17% year on year.

At the same time, it is important to note that the Altes Land region is likely to see a more pronounced drop than southern Germany. East and West Germany are also reporting harvest declines. However, these are moderate compared to previous years. The next few weeks will show just how accurate these forecasts were. At the moment, a number of countries are indicating that they will downgrade their forecasts.

At BayWa, the lower fruit count in the Lake Constance region will hopefully be compensated by significantly higher yields in the Neckar region and in Rhineland-Palatinate. Overall BayWa expects the amount collected to increase in the next few years thanks to an increased amount of fruit from new trees, taller trees and hail protected trees.

How are the current apple market conditions in Germany and the rest of Europe?

Europe started marketing the new harvest with the lowest stocks in years. As a result, the 2013-14 season is starting with the best possible conditions. Higher expectations in the East and lower forecasts for the West are leading to a harvest throughout Europe that gives reason to expect an attractive marketing campaign. Prices have been able to match the level seen last season and continue to remain stable.

For the most part, prices are up year on year. Increased demand from industry and the cider fruit segment is having a positive effect on the pipfruit market. Goods for processing are in demand, and the stable prices in this area provide a market safety net because they offer attractive alternatives for non-graded fruits.

In spite of the larger harvests, things remain rather quiet in Italy, France and Poland, as you would expect this time of year. South Tyrol looks unlikely to deliver on its forecast harvest and is also having problems in terms of fruit size.

Things are quiet in Poland. We expect a larger portion of the harvest in that country to be set aside for processing. According to the Polish growers’ association, ULO (ultra low oxygen) storage capacities have probably increased once again. So we do not anticipate any pressure at the moment, given the forecast quantity of dessert fruit.

Speaking of Poland and Italy, how do you think competition with these countries and others will affect German growers this year?

Apples rank number one in Germany’s fruit-growing business. With around 30,000 ha of cultivation, they count for almost 50% of the entire land that is growing fruits. Depending on the harvest, Germany sources 60% to 65% of its apple needs domestically, meaning, every third apple is imported. As in the past, a large percentage of Germany's production is pre-determined for the domestic market. Around 10% of German apples are exported, mainly to Russia and Scandinavia.

The strong harvest in Eastern Europe will, however, limit sales opportunities for western European exports to Russia this year. As a result, sales activities aimed at this market will commence later. While Poland is forecasting that its harvest will rise by 300,000 metric tons (MT) this year, the country also expects the percentage destined for industrial processing to be higher than it was last year. This would ultimately mean a reduction of the fresh fruit supply.

The increase in quantity compared to 2012 in some European countries is significantly lower when you look at the three-year average. Italy, France and the Benelux countries, for example, are expecting 90% of a full harvest in 2013. What’s more, countries such as Denmark, Hungary, Slovenia, the Czech Republic and Croatia have traditionally not exported to Germany or have sent very little. Marketers in Italy and France are channelling into new sales opportunities in North Africa and the Middle East to compensate for a lack of export opportunities to the East. In particular France is currently very active in Asia.

By extending the reach of our supply chain, we at BayWa are pursuing one our internationalization strategy. Having said this, we are planning and preparing to stretch our export activities to markets we have not served so far. Last season saw us take our first commercial steps when first containers were shipped from Lake Constance to Singapore. It is our prime intention to build new and retain sustainable market access on behalf of our growers.

Back in the 1990s, when we shipped the first apples from Lake Constance to Russia, the market potential seemed insignificant for our sales portfolio. Today Russia is an inherent part of our export activities.

On a production note, which varieties have become more popular for growers recently and why?

We give our contract growers clear recommendations regarding varieties and cultivars on the basis of developments and trends in demand. The share of upmarket varieties - such as Elstar, Kanzi®, Braeburn, Gala, Red Jonaprince and Fuji – has increased constantly in recent years as a result.

In terms of the recommended varieties, a certain selection of cultivars is always in focus in order to be able to offer retailers uniform fruit quality to the greatest extent possible. The cultivars are selected in such a manner that they still have the variety typical shape and colour. Within our product range, the amount of land used to cultivate Nicoter apples, sold under the brand name Kanzi®, has increased the most.

At WOG Raiffeisen e.G., their share has increased within six years from 0% to 12%. Thanks to its excellent flavour and optical qualities, this apple is very popular among consumers and demonstrates great marketing potential. Its share within the overall product range could increase by another 2% to 3% in the years to come.

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