T.B. Fruit is trying to bring down apple prices before harvesting begins


T.B. Fruit is trying to bring down apple prices before harvesting begins

07/08/2020

In the 2019/20 season, amid a shortage of dessert apples, a significant part of the harvest of these fruits, which do not meet even the minimum quality standards, was sold in the fresh market at a good price

The largest producer of apple concentrate in Ukraine, the company T. B. Fruit, has issued a controversial press release that predicts a 35-40% increase in industrial apple harvests in the 2020/2021 season compared to last year. The company reports that it was able to process 650 thousand tons of raw materials in the previous season, although it does not specify whether it is an apple.

At the same time, according to EastFruit analysts, the company’s forecast contains a number of serious contradictions that cast doubt on the forecast itself.

First of all, the company notes that “now in Ukraine there is a rather unfavorable weather that prevents the machinery from cultivating gardens”, and then adds that “spring frosts destroyed part of the crop.” However, even so, T.B. Fruit. predicts a sharp increase in production.

The second contradiction is the reference to the forecast of production of an industrial apple. But gardeners are well aware that the term “industrial apple” in Ukraine is identical to the term “production waste”. There are practically no specialized orchards for growing an apple for processing in Ukraine, because it is economically pointless to grow an apple, which is sold on average at 1-2 UAH / kg, if you can, at slightly higher costs, get an apple worth 10 UAH / kg.

Therefore, talking about forecasts for the production of the “industrial apple” is pointless in principle. For example, in the 2019/20 season, in conditions of a shortage of dessert apples, a significant part of the harvest of these fruits, which do not meet even the minimum quality standards, was sold in the fresh market at a good price. But a season earlier, on the contrary, a lot of good quality apples were sent for processing. Therefore, the apple becomes industrial, depending on market conditions, but almost nobody grows the apple specifically for processing. Therefore, it is impossible to predict the dynamics of production of what is not produced. But the offer of an industrial apple can be predicted, but for this you need to know the prices on the dessert apple market, but such forecasts are T.B. Fruit does not.

The third contradiction of the forecast of T.B. Fruit is that a significant, even, perhaps, the main part of the apple, which is used for processing in Ukraine, is harvested in household plots, along roads and in abandoned orchards. However, the supply volume of such an apple depends not only and not so much on the crop as on the purchase prices of processing enterprises.

Therefore, the fourth contradiction of the published forecast immediately arises – the company is very profitable to predict production growth, even if it recognizes that the conditions for growing are poor and part of the apple died from frost, since it is beneficial to buy an apple for cheaper processing. That is, with its forecast T.B. Fruit is trying to formulate in advance the expectation of a low apple price for processing.

See also: This year, apple stocks in European vaults fell by a third

However, if prices are too low, the population will be less motivated to pick and sell an apple. Although, of course, in the conditions of a pandemic, economic crisis and record growth rates of unemployment in the country, probably T.B. Fruit expects that the population of Ukraine will have no choice but to hand over an apple for a penny for processing. Moreover, the purchase prices of this company for the “industrial apple” even in previous seasons beat all the anti-records, and farmers generally preferred to fertilize the fields with apples than to hand them over for processing, as we showed, for example, in this material.

Accordingly, a forecast with so many contradictions and without any serious analytics and argumentation should not be called a forecast. This is just an attempt to influence the market in order to obtain economic benefits. Moreover, soon an early apple of a new crop will begin to enter the market and the company’s apple concentrate production plants will be launched.

It should be noted that for low prices for an industrial apple in recent years there are objective reasons that lie in the change in consumer preferences in the world. We wrote about this repeatedly. Also about this in his blog in detail told the economist of the investment department of the Food and Agriculture Organization of the United Nations (FAO) Andrei Yarmak.

Accordingly, in modern conditions, the task of every gardener, and not only in Ukraine, is to minimize the volume of low-quality apple production, which is usually sold for processing to produce apple concentrate and turns into the category of “industrial apple”. Therefore, in the long term, the supply of such an apple in Ukraine should be reduced, because its harvest is as expensive as a marketable, expensive apple, which is sold on average 5, and sometimes 10 times more expensive than an industrial one. And this, of course, is not very good news for T.B. Fruit and other manufacturers of apple concentrate.

Watch also the video about how the USA, China, France, Italy and Poland fought for the world championship in apple export – “17 years in 17 minutes”.

In a press release, T.B. Fruit also notes that “In Moldova and Poland, where the company has fruit processing plants, plantations in some regions also suffered from frosts. But just like in Ukraine, a better crop is predicted than last year. ”

T.B. group of companies Fruit, according to its own claims, is the leading producer of concentrated juices in Europe and the third largest producer of apple pectin in the world. The company claims that every 10th bottle of juice in the world is made from fruits and berries processed by T.B. Fruit. The Group includes 7 fruit and vegetable processing plants (Ukraine, Poland, Moldova), a transport and logistics, engineering business, a company for the manufacture of wooden pallets, as well as its own brand of direct-squeezed juices Galicia.

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