The EU is extending its free trade agreement with Ukraine until the end of 2015. This is a unilateral agreement, established after Russia imposed sanctions on Ukraine in April. The agreement lowers import duties, and gives many agricultural products free access to the European market. The French apple sector is concerned about the market situation. Exporters fear a saturated market due to the apple surplus. Moreover, consumption was low last month, with plenty of summer fruit still being sold because of the high temperatures.
EU extends free trade agreement
The unilateral agreement came into force in April, after Russian sanctions against Ukraine were threatening the Ukrainian economy. The free trade would be valid for 6 months, after which the association agreement between the EU and Ukraine would come into force. In order to expedite the peace process, this agreement was postponed. The free trade agreement lowers 95% of duties on Ukrainian industrial export, and 80% of agricultural products can be exported to the EU duty-free. Over the first half of 2014, export to the EU already increased by 25%, with Ukrainian export to Russia decreasing by the same percentage. It is also supposed to prepare the Ukrainians for the association agreement.
French apple sector concerned about market situation
The effects of the boycott are also felt by the French apple sector. A number of growers and traders are starting to get worried. The manager of biggest apple exporter Blue Whale, Claude Rehlinger, fears that the European market is getting saturated with Polish apples, causing prices to go down. Forecasts for the European apple cultivation are also showing significant growth for many countries this year: Poland +12%, Italy +13%, Germany +29% and Hungary +33%. For France, a 6% decrease is expected. Growers' cooperative Stanor sees a ray of hope in the good quality of the apples. Last month, demand for apples in France was still low. Because of the good weather, summer fruit was still selling well. The volume sold at the wholesale market in Toulouse decreased by 10%, prices were nearly 40 cents lower. Supplying apples to the processing industry is not a good solution. Because a lot of last year's harvest is still available, prices have already gone down significantly.