By Mark Greenberg of Fisher Capespan
US: Clementine growers sitting on goldmines
production areas as well as in the market. In Chile - which is by far the most significant producer of early imported clementines for the North American Market –
clementine exporters have battled keenly for access to fruit for loading in the earliest weeks of the season. The prices that exporters are reportedly paying in the orchards has got to have clementine growers feeling as though they are sitting on gold mines.
The excitement about these early weeks of the season is understandable. The
California crop of late mandarins was cut short by a mid-season freeze. This has
resulted in a US market that is virtually devoid of soft citrus - a product that in recent years has become as ubiquitous on US produce department shelves as apples or bananas.
With no domestic easy peelers with which to compete, and with the domestic summer fruit harvest only just getting started, early imported easy peelers are poised to do very well.
Chilean clementine departure volumes to the east coast through Week 20 are up 39% over the same period last season. Departures to the west coast are up 54% over the same period. The earliest of the fruit from Chile’s IV Region has tended to peak on small sizes which will provide the market with an abundance of sizes 4, 5 and even size 6 to start the season. Of course, after many seasons of observing the Chilean predilection toward producing smaller caliber clementines, the smaller sized product has become generally acceptable to many mid-range retailers. It`s hard to imagine, though, that size 6 clementines will find much traction when greater clementine volumes are available and the general price level comes down from the stratosphere.
The clementine market in Week 21 is strong on the back of light arrival volumes but is showing a fairly wide-range of prices. Prices for clementines (in the value-added, 10 x 3 lbs. bagged configuration) ranges between US$ 40 – 44 for standard sizes (including size 4’s when they can be blended into the final package). Size 5’s will generate a value added package price of US$ 38-40 and size 6’s when blended will generate US$ 38.
There are sales higher and lower than this range. While it is still early for promotional
activity, there are season long programs with opening prices that tend toward the lower end of today’s price spectrum – prices that are respectable by anyone’s measure though perhaps not at the levels that the frenzied first weeks of the season generate.
Many exporters have wondered aloud if today’s prices will be sustained, and for how
long. It is axiomatic that the price of clementines will ultimately be determined by
their supply in the market and by the relative price of competing or substitute
products. Sellers know that to try to hold the market at an artificially high level will
prove futile at best and, more likely, disastrous. Savvy exporters would quietly agree.
Selling prices will need to move to the level that will allow chain stores to put a retail
price on the product that will create consistent movement that is commensurate with the arriving volume. It would be naïve to think that the price in today`s market can (or should) hold when arrival volumes ramp up and when the full range of domestic summer fruit is added to retailers’ offerings. But there is no reason to believe that clementine prices are poised for any precipitous decline. As volumes in the market increase, expect to see a consistent easing of the price level through the month of June paving the way for stable prices through July.
Navel Oranges:
The first small volume of Chilean Fukumotos will depart Chile toward the end of Week
22 and be available for sale in the market in the third week of June. The first bulk
reefer from South Africa carrying navels should become available around the same
time.
California navels producers have moved into their late navels and most are saying that they will be finished by the last week of June although some may continue to ship into the first week of July. The late fruit is said to be tending toward 72’s and larger and it is expected that 88’s will remain tight through to the end of the California shipping period.
With the California navel season drawing to a close, early imported navel oranges will
find a good market – especially on the east coast - as retail chains should be ready to make the switch to imported navel oranges much earlier than they have in the past two seasons.
Apples:
The apple market continues to gain strength and prospects are very good indeed for the next couple of months.
Today, imported Royal Galas are selling at US$ 30 – 34 size and grade depending. This is welcome news for Royal Gala producers who will soon be opening their C/A chambers. Granny Smith apples are selling at US$ 26 – 28, size depending and bagged Granny Smith are at US$ 24 – 25.
Cripps Pink / Pink Lady are selling at US$ 30 – 34 and Fujis at US$ 32 – 34.
Foreign Exchange:
With oil prices coming down from their January high, and with continued global
nervousness about the fate of the Euro, the US dollar has appreciated significantly in
the last three months against the Euro, the Chilean Peso and the South African Rand. While it is not clear that this will have a significant impact on shipping decisions, it does offer some comfort to exporters and growers.