The wait is still on for Mexican grape imports to build into promotable volumes as cooler weather continues to push back the season. However, the forecast is indicating higher temperatures into the low 90s later this week which is expected to bolster production. By the end of the month, grape supplies are expected to be substantial.
"With a heavy set of red, green and black seedless currently hanging in Hermosillo and Caborca, retailers are anxiously waiting for the opportunity to spotlight Mexican table grapes in weekly circulars," said Ira Greenstein of Direct Source Marketing. "Cool weather throughout Mexico has hampered overall sugar development on all varieties. Expectations are for another 7-10 days of limited availability, followed by an absolute deluge of heavy volumes crossing the border by the end of the month."
While the increasing amount of fruit will be welcomed, Greenstein also expressed that the season might be compressed, which will result in heavy promotions. "There is a fear that we are going to see significant volumes arrive in a condensed fashion and force the industry to move 16-18 million boxes in a six week time frame," he said. "Shippers, marketers and retailers will have to be in-sync with aggressive promotions in place through the entire month of June in order to move through the significant volumes currently hanging."
Red seedless from Chile cleaning up
Chilean red seedless grape volume is still moving steadily and demand is strong thanks to the dearth of red seedless grapes from Mexico. Importers say the delayed Mexican season is providing an opportunity to clear out remaining Chilean fruit, of which there was reportedly quite a substantial amount. However, quality is beginning to decline and prices are adjusting higher.
"We saw spot market pricing tick higher late last week as volumes of good quality storage lots became harder to source," Greenstein noted. "Pricing on Crimsons and other Chilean proprietary red seedless currently range from $18-$20 on medium large, $20-$22 on large and $22-$24 on x-large. The industry is still a week away from seeing any volume on Mexican red seedless and expectations are to see spot FOB pricing adjust higher for Chilean fruit that still has the condition to meet retail specification."
Prices on green seedless stay strong
None of the varieties provide a more clear picture as to what is happening in Mexico quite as much as green seedless. Volumes are very limited and prices continue to escalate while the harvest continues to be pushed back because of the cooler weather conditions. Growers say they are waiting for proper sugar development, but there is a real chance that volumes will shortly come on that heavily, that those high prices might drop substantially.
"Volumes of Mexican Perlettes, Sweet Globe and Early Sweet continue to cross into the US market through an eye dropper," Greenstein explained. "Overall volumes actually decreased this past weekend with many importers canceling weekend commitments. There is a real concern that as temperatures rise, overall maturity and production will come-on quickly, inundating Nogales with significant volumes and challenging available cooler space. Spot market pricing continues to range from $40-$46 with limited availability and expectations are to see that trend continue through the balance of the week. We may see FOB’s on Perlettes open between $32-$36 this week, but buyers need to be cautious as pricing will drop very fast as production ramps up towards the end of the month."
Black seedless to begin arriving this week
The market on black seedless grapes is less volatile despite the fact there is practically no fruit in the pipeline at the moment. However, things will change this week as supplies from Mexico finally begin to arrive. "We should start to see preliminary volumes of Mexican black seedless begin to cross into Nogales this week," Greenstein shared. "Overall availability will be very limited for the next 7-10 days as growers and shippers continue to wait for sugar and color. Opening pricing will range from $28-$32 FOB and should adjust lower by the first full week of June."
Meanwhile he added that Chilean red globe grapes are still around, although supplies and quality are diminishing. Prices remain steady. "Arrivals of Chilean Red Globes are slowing down, although there are still decent supplies available on the east coast. We’ve begun to see overall quality and condition falter a bit as some importers have not been able to move through fruit fast enough. Pricing ranges from $14-$18 with size and condition being the determining factors. Look for FOB’s to remain at these levels until on-hand inventories begin to lighten up over the next 7-10 days."