Last week the first apples of the new harvest of the Gala variety began to arrive on the market, which, according to what the agronomist Miguel Sabbadini, technical manager of the Argentine Chamber of Integrated Fruit Growers (CAFI) explains, usually have a good price because they copy what is found in the previous campaign’s Red Delicious apples stored in cold storage. The average price of this fruit fluctuated until a few days ago between 300 and 400 pesos per kilo, although in some cases of premium products it could reach 700 or even 1,000 pesos per kilo. What will happen in the coming weeks when the new crop settles on the market?
Of the preserved fruit, according to Sabbadini, very little remains: around the month of May that residue should end and only the fruit of the current campaign would remain, much more abundant than the previous one. “Last year there weren’t many apples and it was of poor quality, so very little was kept in the vaults and today there are very few left. This year the harvest is much more important and the quality is very good. In ten days, the new Red Delicious, preferred by the Argentines, will start arriving on the market, which will lower the price of the Gala”, explains Sabbadini.
According to a recent survey, 77% of Argentine apples are produced in the province of Río Negro, Neuquén contributes 15% and the remaining 8% is produced by Mendoza. Sabbadini specifies it there have been only two frosts this year and that producers who got things right weren’t affected. Drought is not a problem even for the cultivation of seeds, because apples and pears are produced in very arid areas, always under irrigation.
Eight varieties of apples are produced in Argentina but 60% of the total production is of the Red Delicious variety. Just over half of the fresh fruit is destined for the domestic market, 34 percent is industrialized and 15 is exported, but Sabbadini explains that international values do not affect the domestic price too much because exports are mainly concentrated on Gala and Pink Variety lady, who are not the ones sought after by the local market. “We don’t sell Red Delicious to anyone in the world, the focus is clearly on the domestic market,” he observes. Then he clarifies that at this level the sector is campaigning to relaunch consumption, which in the last two decades it has dropped from 12 to 7 kilos per year per person.
“The apple is a sweet, it is not the basis of food. If they pick a lot of peaches in Mendoza and the price is low, then people buy peaches it is difficult to update the price of the apple to the pace of general inflation”, he says, adding that this means that the profitability of farms is negative in many cases.
According to a report drawn up by the National Federation of fruit and vegetable market operators (Fenaomra), in the formation of the final price of apples the farm contributes 30 per cent, packaging 26 per cent, freight transport 5 per cent. percent, the wholesale market for 10 percent and the greengrocers bill for 28 percent.
“Costs go with inflation and price doesn’t. 65 percent of the cost of the farm is labor, there is a high cost of labour, the numbers don’t end”, says Sabbadini. Then he points out that since 2006 the area cultivated with apples in the Río Negro has increased from 45,000 to 32,000 hectares. “Out of 1,700 producers in the federation, 500 are in a production emergency situation. Little by little the activity becomes concentrated as a result of the purification,” he concludes.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.