India is facing an unusual grape year. "They tried to bring the season forward by pruning earlier. A particular reason were the debacles in recent years, particularly in the second half of the seasons. The idea behind this bringing forward was to relieve the pressure later on in the season. Bringing things forward does have risks, however. Under adverse weather conditions, and when 'settling' doesn't go well, the yield per hectare could be disappointing, and/or the quality of the grapes could be less than ideal," says Jan van den Adel of Direct Source International (DSI). "The season has gotten started (much) later than last year. Especially because the larger exporters have learned their lesson from starting too early.In addition, everyone was cautious, in view of the bad market reports from Europe."
Strict selection in the field
"So far, the fruit has been of good quality, although varying reports are heard from the market. These varying reports are mostly due to India's size. The country has a wide range of producers and exporters, so you're seeing big differences in quality," Jan says. Our shipping agent Freshtrop has a wide range of growers across all production areas, and has been cooperating with loyal growers for years. "Through correct treatment and by paying a fair price, our growers won't start 'shopping around', and Freshtrop is guaranteed to get good quality fruit. Factors which mean Freshtrop is able to guarantee its quality for years, and which will certainly make an even bigger difference after the rain, are the strict inspection and selection in the field. For each plot, it's determined what is and isn't harvested. When in doubt, nothing is harvested, or the grapes are harvested separately to be sold on the local market. In addition, when it comes to packing, the proper facilities with sufficient capacity are very important. In order to guarantee the best post-harvest treatment, Freshtrop has two (state of the art) production locations. These locations have sufficient packaging capacity (pre-cooling, packing lines and cold stores): everything under one roof, and owned by the company."
Potential Asia
Due to recent hail and rainstorms, the total export of India grapes appears to be halved. "The European market remains important, but as elsewhere in the world, a lot of work is being done to develop alternative markets in order to be less dependant on Europe. A (healthy) development in that respect is that the commission system is gradually disappearing. On departure, it needs to be known how much will be paid for something, and also for which customers or market the product is meant. In a transparent and open relationship (between the grower/exporter on the one hand, and the end customer on the other) cooperation remains in place, and continuity is guaranteed," the importer says. "Asia definitely has potential. We're also active on this market as Direct Source, selling products including Freshtrop grapes to various Asian destinations. However, not every type of fruit and/or variety is equally suitable. In addition to the many phytosanitary requirements that need to be adhered to, there are also very specific demands when it comes to packaging, size, colour, etc. It's certainly not easy to meet these. There are opportunities and it is a growth market, but volume-wise it's not (yet) a bottomless pit."
Competition Chile/Egypt
When asked if there is much competition from the Chilean and Egyptian grapes, the importer answers: "A bit from Chile, but I have to add that Chile has traditionally focused more on the US and Asia. These markets are more interesting for Chile, seeing how they are closer and pay in American dollars. Egypt sometimes has overlap at the end of the India season. This overlap arises because in a normal India season, the last arrivals are roughly in week 20, and Egypt starts shipping between week 20 and 22."
The impact of the current exchange rate on the grape import is very big. "Both the exchange rate of the rupee and of the American dollar have risen sharply compared to the same period last year, and that has a very big impact on the eventual net returns," Jan says. He says the current market situation is healthy. "Tightness is expected to arise, causing the prices to increase further after Easter. Of course we look at the long term, and where possible we will provide optimum service for the clients that see Direct Source (DSI) as a partner for the sourcing of their grapes."
For more information:
Jan van den Adel
Direct Source International
Tel: +31 78 674 91 95
jan.a@direct-source.nl
www.direct-source.nl