The share of the global apple crop used for processing is estimated to have rebounded over 5 percent in 2016/17 thanks to a 10 percent increase in use in China and 4 percent increase in EU utilization. This season, stronger utilization in China is expected to make up for a decline in Europe from weather-related crop losses. Together, China and the EU account for around 70 percent of the world’s apple processing, so their stronger usage has offset declines in South America.
For Chile, although fresh apple production has remained steady between 1.2 and 1.3 million metric tons for the last five seasons, more of the crop is going to the fresh market, with domestic fresh consumption on the rise. Exports of fresh apples holding steady near 800,000 MT, making Chile the top South American fresh apple exporter. In Brazil, apple production has fallen almost 30 percent from volumes just five years ago as growers turn to more profitable crops; very little of Brazil’s apple crop is used for processing, and most of its fresh apples are consumed domestically.
Although Argentina produces far fewer apples than either Chile or Brazil, it has traditionally processed nearly half its apple crop, and until about five years ago, it was South America’s top apple juice producer. Since then, total apple production in Argentina has fallen by a third, while utilization for processing has plunged by 50 percent. Chile has partially filled the void left by Argentina’s retreat from the apple juice market, with Chilean AJC exports to the U.S., for example, increasing 70 percent between 2012/13 and 2016/17 as Argentina’s fell nearly 60 percent. Chile’s apple juice is not a low-cost option, however, given how much competition the fresh market offers both domestically and globally.
This season, juice supply available from South America will likely be about the same as last year, just more expensive: USDA’s pricing for South American AJC last week was around $7.80 per gallon, compared to around $6.00 per gallon a year ago.