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Russian veto and oversupply

Market under pressure for Catalonia's pome fruit

According to data provided by the Association of Fruit Businesses of Catalonia (Afrucat), Catalan apple and pear prices currently stand between 20 and 30% below those of previous campaigns, although the market dynamics are very different.

The price drop is less pronounced for pears, with relatively smooth sales as a result of the shortage in stocks in late 2014, but also to the product's exceptional quality. Apples, however, are suffering the effects of an oversupplied market.

For the Catalan association, the Russian ban is one of the main reasons for this situation, and although off-season producers managed to take advantage of this, at the moment they are equally or even more affected by the veto. "We cannot forget that the Russian market is a difficult market. The first shipments reached high prices, but soon the trend changed and continued downward; non-payments caused difficulties and have reduced export volumes to Russia from the Southern Hemisphere," states Manuel Simón, director of Afrucat.

To this situation we must add the abundance of apples and pears in Europe, which is causing the Southern Hemisphere to lose some of its potential clients in Europe, which was a safe market that paid timely.

Looking at Catalonia's imports and exports up until October, we observe that the balance remains stable for pears, while imports have sharply declined. In the words of Manuel Simón, "this could be attributed to different factors, such as their good quality, and also the media coverage of the Russian veto, raising awareness among consumers and distributors and promoting a strategy based on proximity."
 
However, this balance is different for apples, with an increase in imports, with particular pressure from French apples and an increase in exports, which could be explained by the need to find new markets.

Regarding the process of market diversification, it is worth looking at countries that were minor destinations in the past and have become more relevant since the summer, like Saudi Arabia, Algeria, UAE and Israel, as well as new ones, such as Bangladesh, Burkina Faso, Mauritius and Philippines.

"The sector in general is boosting internationalisation with different missions and surveys that focus on Asian destinations," affirms Simón.


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