There's been no real surprise in the second half of the Ukrainian apple season, as Volodymyr Gurzhiy of Ukrainian apple exporter USPA Fruit had predicted the current situation: "My forecasts for the second half of the season have come true. The marketing year is not over yet, but we can already declare four records. The export season, in principle, turned out to be shorter than any of those that I have observed. We have not yet collected data, but I think that the 2024-2025 season will be a record-low in volume, while we are also seeing record-high prices. At the beginning of the season, prices for industry apples were record high, and therefore many producers sent such apples for processing, what is interesting is that even apples of normal quality, which could go on supermarket shelves, were also sent for processing in considerable volumes."
So why were these apples sent to the processing industry? Part of the reason lies with the increased prices for other fruit juices, Gurzhiy explains. "The prices for orange concentrate juice are high, and therefore they also pull up the prices for apple concentrate juice, and correspondingly, the prices for raw materials were high as well. The low harvest this season was also a driving factor, as some regions suffered greatly from late spring frosts in 2024. Thus, these factors led us to: a short season, low exports, and high prices, although I would note another driving factor; there was a high demand for Ukrainian apples."
Ukrainian exporters, as well as traders, understood that the harvest and later stock of the apples of export-oriented varieties was lower than usual and acted quite actively, Gurzhiy explains. "This year, the battles for the Ukrainian apple were fought not only on the final markets but also via farmers within the country. We had to pay an unusually high price, however, record high prices for industry apples, as well as high prices for premium or 1st quality category apples within the country, gave farmers confidence that they would sell apples at a high price under any circumstances. At the moment, the demand for high-quality Ukrainian apples has reached its peak. Ukrainian supermarket chains have joined the competition for such apples, and the prices paid by domestic retail are fully competitive with international ones. Now we very often receive requests for our apples from different countries, but we no longer have anything to offer them, because from the point of view of quality, the risks are high now and it is more logical to sell the same apple in Ukraine with the same or even better economics."
Every time market participants received positive signals about a possible imminent end to the war, this prompted active investments in the industry, Gurzhiy states. "Ukrainian farmers slowly continued to plant new areas of orchards and renew the infrastructure, when positive news reached them. It's clear that the latest news about the aggravation of political relations between Ukraine and the USA is somewhat alarming for the horticultural industry because investments in horticultural projects are long-term money and it's impossible to withdraw them quickly. However, I do not observe anyone abandoning previously set plans. It seems to me that Ukrainian businesses have already gotten used to the circumstances and are moving in parallel with political trends."
"Perhaps my words sound too positive for the current, so let me add a little bit of realism. Ukrainian horticulture, as well as other industries, is experiencing a very significant shortage of labor resources, especially male professions. Bank financing is still quite expensive and when I tell foreign partners that trade financing can cost 24% per annum, they simply don't believe it, because with such costs it is very difficult to survive in the market. Grant financing has undergone certain changes in the market too, because all USAID programs have been closed, and this organization was quite active in supporting horticulture in Ukraine. Also, as there's a lack of fruit in the domestic market, USPA now also imports apples to fill in the gaps"
Despite the very public disagreement between Trump and Zelensky, Gurzhiy doesn't think the US will abandon Ukraine completely: "I'm sure that we have and had many cards, like natural and people resources, in our hands, and, as we see, both Russia and the USA are fighting to gain control for these trump cards. As such, I don't think President Trump will back down from helping Ukraine. He won't be understood by the community, neither by American voters nor by Europeans. It seems to me that Trump is using manipulative methods of influence to force Ukraine to accept his peace agreement scenario. As President Zelensky has shown, Ukraine will not accept peace at any cost. So, there is a certain tension. It seems to me that the basis of this tension is specific points in the peace agreement, on which the parties have different positions. Everyone understands that a peace agreement must take place and the parties will need to reach compromises, and therefore it will be beneficial for the United States to help and cooperate with Ukraine. The United States has never been so close to defeating Russia in this field," he concludes.
For more information:
Volodymyr Gurzhiy
USPA Fruit LLC
Cell / WhatsApp / Viber: +380 50 925 57 32
Email: [email protected]
www.uspafood.com