Dynamics in the Fruit Market Worldwide

Europe and Turkey have traditionally been leading producers of agricultural goods such as cherries, nectarines, and peaches. However, over the last couple of years, their respective outputs have decreased because of climatological and political factors. This article takes a wide look at the current dynamics in the fruit markets.

Dynamics in the Fruit Market Worldwide

The total output of peaches and nectarines around the world is of approximately 20 million metric tons for the 2016/17 production year. Nevertheless, the leading producers of these goods have somewhat changed in recent years. While the European Union has decreased its production to about 3.7 million tons during 2016/17, China has increased its output to more than 13 million tons. Certainly, the domestic demand of these two economies plays a large role in the respective peach and nectarines markets; however, it is important to mention that the export of these two products plays a central role in the production outlook for both regions.

Amongst the main factors that affected the production of these temperate climate fruits in Europe and Turkey were the unusually low temperatures in the Mediterranean region. For example, Turkey’s peach and nectarine production is expected to drop some 50,000 tons during the 2016/17 season because of high temperatures in the northwest of the country during the spring. During the same time, China increased its production by some 300,000 tons and now China dominates approximately 15.0% of the global export market of peaches and nectarines. Likewise, the EU’s share of the global market has gone from more than 50% to less than 40% over the last 5 years.

Another important issue concerning the ongoing dynamics in the fruit markets is politics. Because of the currently strained relations between Russia and the EU, European producers cannot trade with their largest client in the neighboring East. Economic sanctions and trade restrictions limiting the export of fruits to Russia were temporarily overcome by selling EU products to Belarus or Moldova, who would then resell them to the Russians. However, this model is not sustainable and is certainly more expensive. This dynamic created a market opening for China, Russia’s Asian neighbor, who has increased agricultural productivity and fruit exports. A substantial amount of the Chinese peach and nectarine production is now exported directly into the Russian market.

Similarly, China has expanded its market in the Asia Pacific region. In 2016, China and Australia signed a bilateral trade agreement, which has substantially increased agricultural exchange between both countries.

Cherry Markets

A very similar reality is observed in cherry markets worldwide. Traditional producers and exporters have seen temporary decreases in production due to climatological and other factors, which has allowed new players to enter the market. Because of the cold weather, Turkey saw its production decrease to 475,000 tons for 2016/17. Likewise, the EU has seen a production decrease to approximately 655,000 metric tons. The high demand for cherries in Europe is usually met by imports from Turkey; however, China is now a competitor for the European cherry market. Since 2007/08, China has more than doubled its cherry production from approximately 150,000 tons to more than 300,000 out of the three (3) million metrics tons of cherries produced worldwide every year.

(Read more about Agricultural Production and Trade in the European Union)