Ira Greenstein of Direct Source Marketing:

“We could see a very challenging market for all black seedless this year”

The FOB’s in the US market on imported Chilean grapes, specifically red and black seedless, continue to be aggressive in an attempt to clean up the supplies before the Mexican production enters full gear and the last shipments of the Chilean Crimsons and Red Globes are now arriving on the east coast.

“The overall table grape movement has been sluggish so far in the month of May,” says Ira Greenstein of Direct Source Marketing. “This is because spring commodities like strawberries and cherries are taking center stage in produce aisles around the country. We’ve seen a significant reduction in promotional activity on all imported table grapes and it’s likely we will not have enough volume from Mexico to support Memorial Day ads. June should provide plenty of opportunity to spotlight table grapes as Mexico and Coachella will combine for well over 20 million boxes.”

Aggressive FOBs on red seedless
The red seedless supplies will switch over to Mexico and Coachella in about two full weeks, and the industry currently still has reasonable volumes of the Chilean supply to bridge this time. The Mexican Flames aren’t expected to enter the country in any significant volumes until the 20th of May. “Overall quality and condition on Crimson Seedless are still very good with the majority of supplies still able to meet retail specifications,” Greenstein says. “Many importers have full coolers and are offering aggressive FOB’s in order to keep fruit moving through the system. With the majority of questionable lots liquidated to the terminal markets, we should see importers try to get paid for their best fruit.”

“The current pricing on the red seedless ranges from $14 on medium/large, $14-$16 on large and $18-22 on extra-large with most of the market at $20. For the incoming Mexican Flames, initial quotes will open between $26.95-$28.95 but it is unrealistic to think that those high spot prices can hold more than a few days. If Chilean volumes somehow overlap with Mexico, we can expect to see the Flame market drop significantly by the end of the month. Most retailers will be paying $18.95 FOB after Memorial Day,” Greenstein shares.

Shift to fresh Mexican green seedless
There are still some lots of premium storage Chilean green seedless available, though overall the quality and condition of the remaining volumes are on the decline, Greenstein says. Right now, retailers are starting to shift over to the fresh-packed Mexican green seedless. “The majority of the early Mexican greens crossed thus far have been Sweet Globes and we will see decent volumes of Primes and Early Sweets this week. There are still millions of boxes of Perlettes in Mexico and we should see the bulk of that fruit enter the market by the end of the month.”

The pricing on the green seedless has been high and has been accompanied by good overall quality and condition. “Pricing last week ranged from $38.95-$40.95 on Mexican Sweet Globe and $36.95 on Early Sweets with most retailers looking to push the price lower. Chilean marketers with premium lots are still asking over $40 for that fruit, but most are just trying to clean up the remaining, weaker fruit at discounted prices,” Greenstein says

The projection for the Mexican crop is still showing high volumes of all the varieties of the green seedless. This means that June and July will need to bring along some promotions – “or else there will be the risk of losing significant market share to other fruit commodities,” Greenstein says. “Most retailers are locked in for June and July with programmed business ranging from $16.95-$20.95 with variety being the determining factor.”

Could be a challenging market for black seedless this year
Due to SKU reductions in stores, the demand for the imported black seedless grapes has been very poor. For the Chilean Autumn Royals, the supplies should last another two weeks. Alongside the Autumn Royals, the Chilean Midnights are also still left in the marketplace, while most of the Peruvian supplies have been cleaned up for the season.

Greenstein concludes: “Mexican Summer Royal volumes should start crossing through Nogales by Memorial Day and we could see a very challenging market for all black seedless this year. Typically, we see opening spot prices for Mexican fruit range from $26.95-$28.95 but marketers should be concerned about being able to hold those levels. Without strong black seedless promotions in place, Mexican growers will find it difficult to cover the cost of production this summer.”

For more information:
Ira Greenstein
Direct Source Marketing
Tel: +1 (914) 241-4434

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