Malatya Apricot Crop Survey 2018
We have spent the last few days touring the growing regions of Malatya, visiting many villages and surveying 120 orchards, many of which we survey every year. The following is our impression of the developing 2018 crop:
The bloom was 2 to 3 weeks early due to a record breaking mild winter. Due to warm weather during the early part of the bloom, bloom was short lived, and the fruit set was light in all areas. A frost at the tail end of the bloom damaged 15% of the orchards, those above 1400 m altitude. The farmers will start to harvest in the last week of June, the weather has been very unsettled this year so there is concern about rain during harvest.
Due to the light set the fruit size is large,we estimate that over 80% of the fruit will be size 1 through 4 with the remainder 20% size 5 through 8. Due to an unprecedented 22 rainy days during May, including 12 days of thunder and hail, the crop has a very high instance of speckles and hail damage. 88% of the orchards visited had hail and or speckling in excess of 20% of the fruit on the trees. Over all we estimate 40 to 50% of the crop is blemished.
We estimate the crop is of a similar size to last year, currently there are 110,000 to 120,000 tons dry equivalent on the trees. This tallies with the industry consensus and the official surveys. Harvested tonnage will depend on the amount of blemished fruit that the juice industry buys fresh, and the price of industrial grade apricots, if prices for the worst blemished orchards fall below the cost of harvest as they did last year then farmers will again leave the fruit in the orchards.
Many farmers took insurance against hail damage, and are being compensated accordingly.
We expect an excess of unsulphured fruit once again as farmers with speckled fruit will not sulphur the apricots in an attempt to camouflage the defects.
The abandoned acreage continues to outpace the new plantings which are extremely rare, as a result the potential tonnage in future years is expected to continue to shrink.
The minority of growers who have unblemished fruit can expect to receive a good price at the opening as packers with high spec clients will have to compete hard for the clean fruit. Following last years experience when prices opened at the season low, then rapidly doubled, farmers are not going to drop prices at the opening this year. We expect prices to open at similar levels to the current crop closing prices, with smaller sized fruit moving higher to close the gap with larger fruit. There will be a shortage of size 5 and 6 which have become major sellers particularly for soft fruit. There will once again be a wide price difference between packers based on the quality they supply.
Current crop prices are now within 5% of last years average prices, and well below the 5 year average, as such it seems quite likely that the crop can be exported in its entirety at current price levels.
Speculative sellers having been burnt last year are notable by their absence, the majority of packers will start to offer towards the end of this month when the harvest starts and the price of fresh fruit has been established.
The Lira exchange rate has stabilised following sharp falls in May due to economic and political uncertainty. The rate is expected to hold around current levels up to the election on 24th June, thereafter a win for the incumbent party is likely to see the Lira strengthen, perhaps significantly, however a non conclusive result may trigger further volatility.
· Exports in May were 5,941 tons, compared to 6,602 last year.
· Year to date exports are 87,419 tons compared to 77,841 tons last year.
· Average price for whole apricots in May was $3282 per ton, average price year to date is $2914.
Size 1 through 4 is now sold out. We expect to finish the year with total exports of 96,000 tons, domestic consumption of 7,000 tons and a carryover of not more than 10,000 tons most of which is blemished and undersized fruit, leading to a tight supply situation at the start of new crop.