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Market report by Mark Greenberg, CEO Capespan North America

US: A challenging East Coast grape season

East Coast grape storage filled near capacity
The widespread industry hope that an early end to the Chilean Flame harvest and a resulting mid-February decline in arrivals would lift the USEC seedless table grape price level has not come to pass. The market seems stuck in a kind of gridlock from which it has been unable to extricate itself. Cold storage facilities up and down the Delaware River remain filled to near capacity, with a heavy inventory of table grapes of varying age and condition and an assortment of stone fruit and pears. Indeed, the Port of Wilmington this week advised its customers that it had an inventory of over 14 000 pallets (not all grapes, to be sure) and that shipments out of the facility were not moving at a pace that would allow it to accommodate the cargo of incoming vessels.  Other pier-side coolers are facing the same problem. 

But even with this ample inventory and the resulting weakened market, table grape prices at retail have not moved down commensurately and movement at store level has failed to adequately pick up pace. It seems that the industry in general has not been able to get retailers to focus on moving volumes of grapes. Rather, many retailers seem content to maintain the dollar volume while they give up case volume. Of course, while this is happening, inventory is getting old and there are reports in the market of dumping of unsellable inventory. Indeed, this is as troubling a grape market as we have seen on the USEC, a market that has had no shortage of challenging grape seasons. 

Grape shipments from Chile increased 78 percent over last season 
By the end of Week 8, Chile will have landed 16.6 million cases of table grapes on the USEC representing a 78% increase over the same period last season. Flame arrivals through Week 8 are up 71% over last season. As expected, we are seeing a predictably quicker end to Flame shipments with lighter weekly arrivals in Weeks 7 and 8 than last season. Equally predictable are Crimson arrivals that are also running ahead of last season with almost four times the volume having arrived on the USEC through Week 8 than arrived last season through that same week. These early Crimsons are arriving in a market that still has a lot of Flames to sell. With retail confidence in Flames on the decline, the presence of these early Crimsons will serve only to exacerbate the Flames problem. 
 
Thompson Seedless and other white seedless varieties are also showing arrival volumes well in excess of last season. As in the case of red seedless grapes, this heavy white seedless volume is indicative on an early crop and not entirely to just a large crop. Through Week 8, white seedless table grape arrivals on the USEC were almost 88% over last season through the same period with Thompson Seedless arrival volumes alone over twice the volume as arrived last season. But on a weekly basis, Sugraone arrival volumes are down from last year in Weeks 7 and 8, again highlighting the earliness of the harvest. 
 
All of this translates into a weak and troubled table grape market with inventory pressure softening price levels and with ageing product being forced into an indifferent market. 

Price information 
Today, Chilean Flames showing good condition are selling at US$ 16 - 18 for Large (700), US$ 12 - 14 for M-Large (500) and US$ 20 for x-Large (900). Medium (300) are a virtual giveaway at single-digit values. Weak fruit showing its age will get less money and, if consigned to the wholesale market, will get virtually nothing. Indeed, wholesalers have been so inundated with rejected and orphaned Flames that many are refusing to take in more. White seedless grapes are selling a notch below with US$ 16 18 (mostly US$ 16) on Large (700), US$ 10 12 (mostly US$ 12) on M-Large (500) and US$ 18 20 (mostly US$ 18) on X-Large. Red Globes from Peru are selling at US$ 16 - 18 for Large (700) and US$ 18+ for x-Large (900). 

Is there any prospect for this table grape market to strengthen in the coming weeks?  Certainly, Flame volumes will diminish one way or the other over the next two weeks and when focus is placed on Crimsons, we could see prices move up to a US$ 18 22 range for Large (700), but that may be weeks away. 

The white seedless grape price range, in the short term, will not move up as much or as quickly as the red seedless. The retail world sees the arriving volume and the heavy inventory and will continue to have little trouble sourcing fruit at low prices. The opportunity for higher prices will come in late-March when white seedless arrivals slow down and scarcity returns to the market. With an expected early end to the Chilean table grape harvest, April could look very good for anybody who has fruit. 

For more information:
Mark Greenberg
Capespan North America
Tel: (+1) 514-739-9181


Publication date: 3/1/2017


 


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