AgrarMarkt Austria Market Report for April 2020

Apple prices in Austria become firmer, stocks melting away

After the last, very intensive marketing weeks, business has generally calmed down, although the market for dessert apples remained extremely receptive in April.

Due to the record harvest in 2018, last year's period called for a reduction in inventories at all costs. This means tactical sales skills are all the more in demand this year. Quantities are becoming scarce and prices are becoming increasingly firm. Following the trend, they could continue to rise in the last "main delivery month" of May.

Confirmation of the continuing upswing for April is provided by the wholesale prices of domestic main varieties from conventional production, recorded by the AMA nationwide. Gala solidified by 10 % compared with March, averaging EUR 0.81/kg. Golden Delicious, at EUR 0.63 per kg, was up 11 %, and Jonagold, sorted and packaged, cost an average of EUR 0.74 per kg in April (+6 % on the previous month), the highest level in 18 months. Across all varieties, the sales price increased by an average of 12 % compared to March and 37 % compared to the corresponding previous year's figure.

The stock of Austrian dessert apples (organic & conventional) recorded by Agrarmarkt Austria amounted to 47,476 tonnes as of 1 April, which is about 25 % below the 5-year average for conventional goods. Of course, the reduced harvests in 2016, 2017 and the following record year 2018 are of course only conditionally representative. As the season progresses, the shelves become lighter. Crown Prince Rudolf, Elstar and Granny Smith are already, or will soon be, discontinued and the important export apple gala is expected to come to an end at the end of May or beginning of June.

The aggregated inventories of the four largest European producing countries (PL, IT, FR, DE) are also lagging behind the previous year by around 23 %. As is well known, Poland was hit particularly hard due to late frosts in 2019. This resulted in a massive price correction (+160 % in March) and a halving of inventories (as of 01.04) compared to the previous year.

Austrian dessert apples are still in demand and present on international markets. Of course, also and especially due to Poland's absence, strong flows towards Germany, Spain and Scandinavia will be recorded this year. Eastern Europe plays a subordinate role, not least because of the high price levels. To what extent the recent frosty nights will influence the quality and harvest volume in 2020 is difficult to say at the moment, especially since the "ice saints" were still around in mid-May. It is a fact that there has already been major regional damage. There will be more clarity on this in late May, early June.

Carrot market remains stable
April also saw strong sales of vegetables in stock. Meanwhile, the Lower Austrian producer price for carrots remained stable at 42.50 EUR/dt and the wholesale price for carrots, washed, sorted and packaged, charged by the AMA, remained almost unchanged in April at an average of 0.63 EUR/kg compared to March. The quantities are already becoming quite manageable and many marketers have already lowered their shutters. The remaining quantities are mostly contractually bound and are sold on domestic markets.

Lively sales of Austrian table onions
The wholesale price of onions, sorted and packaged, averaged EUR 0,34 per kilogram, with a slight upward trend, at the previous month's level. Easter, as well as the general increase in in-house consumption, meant that domestic sales continued to be very frequent in April. Exports are being made on an ongoing basis, even though significant price concessions are door openers here.

Demand for table potatoes, trade in processed goods frozen
At 25.00 EUR/dt, the Lower Austrian producer price of table potatoes in firm boiling is still unchanged. From today's point of view, the old stock will last until the beginning of June and Whitsun is targeted as the start of the domestic Heurigen season. So while the warehouses for table potatoes will be cleaned out in the foreseeable future, marketers of processed goods will have massive sales problems. There is currently talk throughout Europe of around 2.7 million tonnes of surplus processed potatoes. The market has completely collapsed since the Corona-related lockdown. Negative effects on the potato starch market, which was very well positioned before the crisis, are to be feared.

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