With large apple crops expected in several states this year, shippers will begin to figure out what part exports will play this season. One issue will be where and how much of this year's crop will be sent abroad, but the recent Russian ban on European and American goods will also factor into how this export season pans out. Shipments of apples from the United States to Russia are not a big part of all apple exports, so the ban will not seriously affect American shippers directly. But increased competition from European shippers, looking for new markets to make up for shortfalls in Russia, could increase competition abroad.“We're just starting to fill warehouses, making fruit available for the demand that's there,” said Todd Fryhover, President of the Washington Apple Commission. “So the export side of things is just getting underway.” Most of the apples exported from the United States originate in Washington, and Fryhover noted that, while the export season is just getting started, total apple exports could increase because of a large crop.
“This is going to be a large crop for Washington,” said Fryhover. “It's more than likely this will be our largest crop, historically, and we're experiencing relatively flat consumption domestically. As our volumes increase, the export market becomes more important. That's where we see our growth.” Mexico and Canada are the largest recipients of American apples, but emerging markets in Asia show lots of potential.
“Asia shows promise,” noted Jim Allen of the United States Apple Export Council. “Malaysia and Southeast Asia are showing some growth. The European Union is not showing a lot of growth.” While Europe is not a market with lots of growth potential, it could affect the dynamics of this year's export season. Russia's ban on goods from Europe, while not directly affecting the United States, will affect European shippers, who have, in the past, sent significant parts of their crops to Russia. That means European shippers will have to find new markets for their apples or send greater quantities of fruit to existing markets. That could lead to increased competition between American and European shippers.
“Russia, while still a good export market, is a smaller volume export destination for Washington State. Losing the volume we are able to ship to Russia is unfortunate, but it is yet to be seen how this will affect the overall export market for our fruit. Russia only takes select sizes, grades and varieties of apples,” said Eric Borton, vice president of export sales for Borton Fruit in Yakima, Washington. “The largest impact will most likely be the impact felt from more competition from European fruit suppliers. Russia is an important market for many European producers, and with the Russian Ban, these producers will have to look elsewhere to sell their fruit, possibly creating more competition for Washington fruit in other export markets.” Poland, for example, is one of the largest apple exporters in the world. They send over half of their exports to Russia, and with the Russian ban in place, Polish exporters will have to find a home for that excess fruit, possibly in Asia or the Middle East, where U.S. exporters see growth potential.
“Certainly, if you take out that quantity of product, it has to go somewhere, whether domestically or to different markets,” noted Greg Palmer of Multi Fruit USA. “We will also export more, just because of sheer tonnage. But where that fruit is going to go, it's still to early to tell.” So the current situation is one where everyone agrees the dynamics of global trade in apples will be much different than in years past, but no one knows just how those dynamics will play out. That both the United States and Europe are looking at some of the biggest crops they've had will also complicate things, since, not only has the number of export destinations been reduced, but the amount of fruit that needs to find a home in those export markets has increased.
“The Russian ban is still a part of the overall global marketplace and will have an effect, but it is hard to tell at this point how big of an impact the ban will have,” said Borton. “The larger issue at hand is total global apple production, as Russian consumption of the global production is a small piece of this overall. The real question is can the rest of our exportable world markets handle increased volume to offset the loss of the Russian market.”