Table Grapes:
The 2018 imported table grape season is nearing completion, and not a moment too soon. The market is already anticipating the start of the Sonora harvest and the California desert deal will start with limited production next week.
Through week 18, Chilean exporters have shipped 246,306 metric tons of table grapes to the USEC, down 5.6% from the 261,085 metric tons shipped to the USEC over the same period last season. Shipments to the USWC this season were at 87,838 metric tons representing an increase of 4.4% from the 84,063 metric tons shipped last season.
Imports to Canada were down slightly with 18,849 metric tons shipped this season as compared to 19,414 metric tons shipped last year. This decline in shipments to Canada was more than offset by larger arrival volumes in Canada from South Africa.
In week 18, Crimson Seedless are selling at US$ 16 – 18 for X-Large (900), US$ 14 – 16 for Large (700) and US$ 12 – 14 for Medium (500). With Crimson departure volumes winding down, the market will see light arrivals in weeks 19 and 20 and “clean-up” volumes after that.
Thompson Seedless showing good condition are selling at US$ 32 – 36 on limited volume. True storage fruit is selling north of US$ 40. Problem fruit, though, is all over the map. Red Globes are moving in a narrow band of US$ 16 – 18.
Citrus:
Citrus growers in Chile, South Africa, Peru and Uruguay are looking toward the imminent start of the summer citrus deal with great optimism and high expectation. The optimism is understandable: The California citrus season has been shortened by a generally light crop and by weather that complicated the harvest throughout the winter. For the second year in a row California will make an earlier than normal exit from the market and will leave a wide open playing field for Southern Hemisphere shippers. Indeed, most California late mandarin shippers will stop shipping by mid-May. Navel oranges will be done by the middle of June. This has fueled expectations of high prices for imported citrus.
Today, California navel oranges are selling at US$ 22 – 26 size and grade depending. Easy peelers are selling at US$ 34 – 36 for 10 x 3 lbs. bags.
Easy Peelers:
Imported easy peelers have begun to arrive. Light volumes of Peruvian Primasoles and Okitsu (satsumas) and Chilean clementines are already in the market. These early arrivals, are facing late mandarins from California in the market and are selling at US$ 34 – 36 for variety, size and pack depending.
As the California soft citrus crop winds down and imports are insufficient to meet demand, we expect to see 10 x 3 lbs clementine prices rise to the US$ 38 – 40 level. Retail programs will start up in mid-May at a price generally lower than the spot market. Sellers will need to work hard to find the means to support their program customers in these weeks – a challenge that is faced each season if perhaps a bit more dramatically this year with domestic product in such short supply.
Seasonal expectations for the soft citrus market are high. Consumption of clementines and mandarins continues to grow and retailers are allocating ever greater shelf space to the product, often at the expense of navel orange space. Increased easy peeler volumes are expected from most sources this summer. Chile alone is expected to increase its late mandarin loadings to the US by as much as 30% and Peruvian late mandarin availability will continue through September. Uruguay will also likely increase its commitment to the US market. While South African easy peeler volumes to the US will not increase dramatically this season, new plantations will boost production in the coming years.
With all of this, we anticipate a solid easy peeler season in the US with prices in May in the US$ 36 – 38 range (on average) with some sales higher. Prices will moderate in June as more fruit hits the market and as retail programs take hold. Growers may scoff at a moderate price of US$ 32 – 36, but all need to remember that this fruit will compete on the shelves with summer fruit. The success of the easy peeler summer campaign will be to give retailers the opportunity to profitably commit shelf space. Conversely, without this shelf space, the tonnage of easy peelers headed to the USA will languish and price levels will suffer.
Oranges:
Navel oranges will be subject to the USDA/AMS Marketing Order for oranges until midnight, June 30. This marketing order regulates the quality and condition of navel oranges seeking entry into the USA and denies entry to any oranges that, among other defects, fail to meet a sugar:acid ratio of at least 9:1. In most seasons there is little imperative to receive oranges before July 1. But with California navels likely to run out before mid-June, this year is different. That said, any shippers who believe that the enforcement of the marketing order will be impacted by the scarcity of domestic fruit should be disabused of that notion. The marketing order is diligently enforced and all arriving fruit is tested.
The early navel orange market will be strong. Indeed, exporters have tried to discourage their receivers from making any program commitments. Of course, that would be folly. Certainly, the mid-June through early-July navel spot market price will be high as imported arrivals will be insufficient to meet the demand created by the early departure of California from the market. Light easy peeler arrivals from Chile and Peru will not offer much relief to citrus-hungry retailers. But the second bulk vessel from South Africa carrying a heavy volume of navels will arrive in the first week of July. (The first bulk vessel will have arrived in week 25 but will carry a relatively light volume of navel oranges.) In addition, Chilean Fukumotos will start to arrive in early July and will help to fill the pipeline.
The result is that by mid-July, the USEC should have a good and regular supply of navel oranges, able to fill retail demand with fresh product. The high spot market price in June (perhaps US$ 24 – 32, size depending) will by mid-July soften to respectable but more moderate prices. The value to growers will be realized in lighter week to week inventories which will result in fresher fruit being supplied to customers and better pack-outs in the value-adding process.
Retail programs will help to stabilize the market and build a strong foundation for it. It cannot be forgotten that increased easy peeler volumes will continue to impact the navel orange business. With both Chile and South Africa expected to ship increased navel volumes to the USA this season, sellers cannot risk inventories getting out of control.
For more information:
Mark Greenberg
Capespan North America
Tel: +1 (514) 739-9181