ANALYSIS – The first cherries have arrived, starting price skyrocketed!

After strawberries, as the first seasonal fruit appearing on the domestic market, cherries have also appeared at markets in mid-May, one of the most sought-after fruits in the EU, achieving an exceptionally high retail price. Initial estimates from SMARTERA experts indicate that this year’s yield in Croatia will be halved and could range from 600 to a maximum of 650 tons, due to frost that significantly affected the yield in the continental part of Croatia on two occasions, while somewhat less damage occurred in Dalmatia, from where the first cherries are arriving these days.

„Due to the exceptionally lower yield than in previous years, as well as significant disruptions in the supply chain on the global market due to the corona crisis, and a shortage of labor in numerous countries with large cherry production, along with huge demand from the German and Scandinavian markets, we expect that this fruit, in which Croatia is usually self-sufficient in normal seasons, will have an exceptionally high price on the market. It is estimated that retail chains will have fewer imported cherries on their shelves this year, and that this year’s price will be significantly higher than in previous years“, concludes the SMARTERA analysis.

The starting price this year is 40 kuna per kilogram at markets, and even 45 kuna in stores. According to data from the Agricultural Market Information System (TISUP), last year the average price at markets was 27.48 kuna, and during the main season it ranged from a maximum of 38.75 kuna to 23.21 kuna at the peak of the season, at the end of May and beginning of June. The average price in stores in 2019 was 38.18 kuna, ranging from 43.41 kuna at the beginning of the season and not dropping below 35 kuna per kilogram.

The current purchase price in the Dalmatia region, where new cherry plantations have been planted in recent years, does not go below 30 kuna, and it may only be adjusted downward when cherries from the continental part of Croatia appear on the market in seven to ten days. Cherries are mostly consumed from May 20 to June 20, after which they are replaced by other fruit types, although later varieties produced until the end of August can also be purchased on the market.

Traditionally, higher consumption of cherries is in Dalmatia, while in the continental part there is higher demand for strawberries. The high price of cherries is one of the main reasons for lower consumption.

According to estimates, the average consumption in Croatia is between 2 and 2.5 kilograms of cherries per capita, while the average in developed European countries and Turkey, as a major producer, is around 8 or more kilograms. Experts claim that the price is crucial for the decision to purchase cherries, and that the purchasing power of Croatian consumers can bear a price up to a maximum of 25 kuna per kilogram, which is the threshold for good sales. Anything above this price reduces sales by 30 percent or more. 

Cherry production, according to official data, takes place on a maximum area of 972 hectares (in 2016), while in the last two years production was at 724 ha (in 2018), dropping to 681 ha last year. Production ranged from a maximum of 1405 tons in 2015, while last season it was at 1091 tons. The lowest production of 795 tons was achieved in 2014, so current estimates suggest that this year is one of the worst for this production.

It is important to emphasize that these are official data that only refer to intensive production intended for the market, while a portion of cherries from extensive cultivation is sold at home or through the gray market, which is one of the Croatian specifics that could particularly intensify this year due to the corona crisis and the explosion of sales through social networks and home delivery. 

Last year, Croatia imported 723 tons of cherries worth 1.17 million euros, with the largest quantities coming from Greece – 488 tons worth almost 580,000 euros. We imported 96 tons from Germany, 67 tons from Italy, and 20 tons from Serbia, with the same amount imported from Spain. Croatia’s export last year amounted to 177.6 tons worth about 297,000 euros, with as much as 159 tons ending up in the neighboring Slovenian market.          

Cherries are a fruit that is not sufficiently available in Europe. Growing cherries requires great knowledge and experience, and a sophisticated approach to production, which is a challenge exclusively for brave and persistent fruit growers who are willing to learn. Today’s technologies require full technological equipping of cherry plantations. Mandatory equipment for cherry plantations includes irrigation systems, rain protection films, hail protection nets, and in heavier soils, drainage and excess surface water management systems, which require significant investments.

„In recent years, there have been no significant advances in the growth of areas and production in fruit production, and yields fluctuate greatly from year to year. Our most important fruit species, which we produce the most, such as apples, mandarins, sour cherries, cherries, plums, and  strawberries, have very uneven production from year to year and large differences in yields and achieved production. Such production results are conditioned by low investments in irrigation and technology, the quality of the varieties planted, the quality of the seeds, the quality of the soil, and overall management of production factors that affect yield. One of the key reasons is also the weak vertical and horizontal connection between production, purchase, and the market, which is why it is of utmost importance to strengthen companies that can initiate cooperation, purchase, and distribution, both in domestic and export markets,” concludes the experts from SMARTERA.

Experts from SMARTERA are convinced that cherry production, which has huge demand in the European market and achieves high prices, can be one of the drivers of fruit growing in Croatia, in the strategic turnaround that we need and which we constantly talk about. We are convinced that at the state level and with a new agricultural paradigm, stronger positioning of agricultural production in the overall economy, and a large investment cycle, it could stimulate the planting of new plantations, increase production to achieve quantities for the domestic market and export to the EU market where this fruit can achieve exceptionally good financial effects, concludes the SMARTERA analysis. 

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