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Rising middle class can change export dynamics for apples

by Lora Abcarian | September 10, 2009
Countries with a growing middle class give producers of Washington apples increased opportunities to market product abroad. Todd Fryhover, president of the Washington Apple Commission, provided The Produce News with the following observation. "As economies improve and the middle class grows, [apple] size and pricing improves to be similar to the United States." Historically, foreign markets have favored smaller-sized apples, Mr. Fryhover said. But he sees potential for the dynamic to change in the coming years.

Washington is anticipating an apple crop of 107 million boxes for the 2009- 10 season, giving WAC the chance to meet growing demand. Exports are traditionally 30 percent [of the Washington crop], he said. This year, we're going to be at 32 percent.

In all, he expects between 30 million and 35 million cartons will be exported this season. This year, were going to ship the most cartons ever, he noted. As Washingtons annual apple crop continues to grow, Mr. Fryhover said it will be more important than ever to expand marketing opportunities abroad.

After returning from the U.S. Apple Outlook Conference in Chicago, IL, Mr. Fryhover said that there was industry agreement on several key issues. Everyone is pretty consistent [about numbers for this years crop], he said. And with increasing crops, new markets must be developed.

Although very few new apple markets have opened recently, Mr. Fryhover said that the export of all fruits has increased to Jordan, a country close in proximity to Iraq. Asked whether he expects apple exports to decrease after the United States pulls out of Iraq, he said, As the economics improve, politics [in Iraq] will become more stable. The middle class will return.

According to Mr. Fryhover, 38 percent of all apples shipped to Dubai move along to other geographic destinations. Interestingly, he said that the volume of American apples reaching Iran has increased.

The region is not without its own resources when it comes to apple production. Mr. Fryhover said that Golden Delicious apples are produced there. Everyone needs to eat first, he said. The question is: Can we go in and build markets or do we need to be stealth marketers?

Red Delicious remains the top export variety, and Gala and Granny Smith have been good sellers in the region depending upon price and availability.

Gala production continues to increase each year in Washington, and Mr. Fryhover said that 21 million cartons of the variety will be sold to export markets. Theres no question marketing opportunities abroad are important, he said. We need to improve our opportunities on Gala.

Strong apple markets exist in Mexico, Asia, China, Canada, South America and Central America. To illustrate, he said that Mexico purchased 12 million boxes of Galas last season. What a big market, he noted. A total of 1.5 million boxes were sold to Canada.