GLOBAL MARKET OVERVIEW GRAPES

The global grape market is generally positive at the moment, but the industry continues to be plagued by many of the challenges we are all familiar with by now: high production costs, logistical issues, turbulent weather, and labour shortages. Despite this, many countries can’t complain, as grapes continue to be a popular product across the world. Some countries such as Belgium and Germany are even managing to offset the usual school summer holiday dip in sales due to the good weather, which has also been good for demand in the Netherlands. In France, there is competition from other summer fruits on the market at the moment, whilst in South Africa and China growers are worried about increasing international competition. Chile has had an excellent season in many ways, but has suffered severely from logistical issues, and finally, Australia has seen the 2021/22 season off with a bang, with the highest exports to Vietnam so far.

Netherlands: Demand for grapes not bad, high costs a challenge
After a difficult season for Indian grapes, the season continued with grapes from Egypt and Italy. Dutch importers indicate that the India season has been difficult. The free market from April to mid-May was simply not good and the high cost price was hardly even achievable. The Egyptian season started a little later at a realistic price level. Meanwhile, the Sicilian grape season has been underway for a few weeks now, and the first blue, white and red grapes are also arriving from Puglia. According to an importer, the start has been reasonably good and sales and demand are at a good level. For the grapes from Puglia, the season started two weeks earlier than last year. The weather has been good and the growers have had few problems. Overall, a slightly higher volume is expected. In all production countries, the rising costs of labour, transport and energy are a major challenge. The new varieties are also increasingly finding their way into the market in both Spain and Egypt. Not within the pitted grapes, which are largely finding their way into the ethnic market, but within the seedless varieties, more and more new varieties are making an appearance. The prices for the white seeded Sicilian grapes are around EUR 2.10 per kilo, the black ones are around EUR 2.00. Furthermore, there are still quite a few white seedless grapes from Egypt on the market. Those grapes have found their way to decent prices. The prices for 10x500 grams are still around 90 cents per punnet.

Belgium: Good sales despite holiday dip
Sales of grapes are going extremely well at the moment. “We see that the demand increases when the temperatures rise," says a Belgian wholesaler. "Just before the holiday period you often see that sales drop a little, but because of the nice weather we continue to sell well."

"Actually, we worked well with the white grapes all winter. You can see that the volumes coming in from Egypt and India are a bit less compared to the grapes from Italy or Spain, for example, but still the demand is not lagging behind.” The prices also remain fairly stable at the moment.

Germany: Restrained demand for grapes
The Italian grape season started about a month ago, and the main varieties Victoria and Black Magic are now increasingly entering the market. However, demand is rather restrained at the beginning of the summer holidays, reports a Hamburg fruit importer. Meanwhile, the supply situation with goods from Italy, South Africa and India can be described as rather abundant.

"The Italian season lasts until November, depending on the weather and demand, while the second half of the season is dominated by Italia and Muscat grapes," says the importer. "In northern Germany, the Victoria grape is usually the most popular in the light range. For dark grapes, the early varieties have the problem that the berries do not grow uniformly. With the later variety Palieri which will arrive in about 2-3 weeks, on the other hand, the fruits are more homogeneous."

UK: Changes in retail needed to improve UK grape sales
The main Peruvian grape season ended in February for the UK and it is now in the low season. The 2021-22 season was strong with good volumes and good market conditions with the exception of Europe. 

“The Californian season ended early so there was a strong demand, the Peruvian grapes were big and had an excellent shelf-life. The window in Europe for Peru is getting smaller as the European grape producers are extending their seasons and Brazil is also now making headway, the quality may not be quite as high as Peru but the pricing is lower. South Africa and Namibia have been slow to move to new varieties but are getting there now,” according to one trader.

“The UK market is difficult as they require 10x500g punnets which are very expensive to ship. Retailers in the UK have also done a good job of pushing prices down. In my opinion prices have been too cheap for a while at £1.50 or £2 a punnet, grapes are expensive to grow and this low price has affected the quality of grapes on the shelves which in turn has affected consumption. Consumers only see white, red or black grapes and the price tag, they don’t see the producing country. If they get bad quality grapes, they assume that all grapes will be the same and it take a long time for them to go back and purchase grapes again.” 

Egypt is the main supplier of grapes to the UK at the moment, the supply will then move on to Spain, Italy and Greece in the coming months.

France: Slow consumption and low prices
The import of grapes to France is currently complicated for all the origins. There are still grapes from South America on the market, a few grapes from India, as well as a large presence of Egypt and the Morocco origin. The Italian grape season has just started and the Spanish origin is about to start. Although the beginning of the campaign had started well, the end of the season is difficult. There is more supply than demand, consumption is slow due to competition from summer fruits, especially peaches and apricots, and prices are "bad" according to an importer. "There is always more consumption in May and June than in July anyway."

Italy: Higher production costs not reflected in sales prices
The Sicilian table grape campaign, which this year started about ten days later than usual, is picking up again. The region is now in the middle of the harvest with a good production and regular demand, as the summer weather trend is helping with sales. The markets are reacting well and marketing is proceeding at a fast pace, even if they are affected by the heavy price increases in raw materials and agricultural diesel. The latter has almost tripled in one year, not to mention the cost of iron, plastic, fertilisers and pesticides. Producer prices are slightly lower than last year, and the higher costs are not reflected in the sales prices. Another problem is the lack of labour. Fortunately, competition from Apulia and Spain is not being felt too much at the moment, thanks to the fact that Sicily arrives first on the markets, but there is a lot of Egyptian produce to compete with.

The Apulian table grape campaign is about to start with the early varieties Victoria and Black Magic. At the moment, satisfactory yields per hectare are expected for the current campaign, and the quality of production is certainly higher than a year ago. The bunches are looking very good in terms of appearance and flavour. The fear, however, is that the forthcoming heatwaves may compromise quality and yields, making harvesting complicated, also due to the severe shortage of labour. Due to the torrid heat, farms are carrying out defence and nutrition interventions in the evening or during the night, while irrigation hours are doubled, because evapotranspiration is high.

Spain: Extra-early harvest delayed by cold weather
Last week, the first table grapes from the extra-early coastal areas of the Region of Murcia, the main producing area in Spain, reached the export markets. The campaign started about a week late for the earliest varieties due to the cold and the rains during the flowering period. The varieties that come after the extra-early ones will do so on their normal dates and it is expected that the general yields will be average for this crop. During the last month and a half, the weather has been ideal for the development of the grapes on the vine, resulting in excellent quality and a promising campaign. Prices are good at the moment, although the volumes are very limited from now until next week, at least.

The Spanish campaign starts at the same time as the Italian one, although in terms of varieties it still does not represent as important a competitor as Egypt does. However, the North African country is having greater difficulties in maritime logistics, in what is a global problem, due to the uncertainty of the arrival times of the merchandise and the high costs of containers and freight. This could make it less competitive compared to road transport of Spanish grapes, which is much more reliable. Another possible up and coming competitor is Lebanon. Although Lebanon is not a significant player in the grape market yet, there are definitely opportunities to supply Europe. With varieties of grapes that follow up the European production and can, in part, replace the South American imports, Lebanon could be the alternative, as it is located closer to Europe.

Turkey: Good volumes of grapes expected
There are two major areas for grapes, the eastern and western areas of Turkey. The east has started, and the region expects good volume, good quality and good prices this year. The western area is set to start towards the end of July, the volume will be better than last year, white and green grapes in particular are expected to be quite good in volume. The prices for the west are expected to be higher though. The weather was good overall for both areas, a lot of rains but no damage to the product. Some hail damage is present in the west but it is negligible. Yellow grapes will have a lower volume and might be hard to find.

South Africa: South African exports face challenges from Peru and Chile
There is a demand for fresh grapes year-round, but South Africa’s grape season only covers 7 months of the year. To cover that 5-month gap, grapes from Egypt & Spain are imported to provide clients with a steady supply of quality fruit.  

Although imported volumes are significantly lower than the local produced volumes there is still a demand for them at main retailers, resulting in the need to supply them to offer it to the customers.

The first arrivals were from Egypt and arrived around Week 26. The Egypt arrivals will continue for about 8 weeks. The first Spanish grapes will start loading within the next 2 week weeks making arrivals more or less Week 31 and will continue for 12 weeks before out South African grapes will be ready again. Currently the average price for grapes stands at R58.21 (3.4 euros) per kg.

The 2021/2022 table grape season has officially concluded, and the intakes reached a total of 77,7 million cartons (4,5kg equivalent). This is a 4% increase compared to the 2020/2021 season.
When comparing regional performance to the 2020/2021 season, the Orange River and Hex River regions displayed the highest volumes inspected with an increase of 21% and 5% respectively.

Intakes have displayed an upward trend year on year. For the last 3 seasons, intakes have increased from 66,1 million cartons in 2019/2020 to 74,9 million cartons in 2021/2021 and 77,7 in 2021/2022

Plantings have displayed a downward trend, decreasing from 21 798 ha in 2019/2020 to 20 564 ha in 2021/2022.

“When considering the international landscape, exports from Peru and Chile have been growing steadily. This increased supply of grapes remains a threat to South Africa’s exports, and we need to track this to stay abreast of this matter, especially during specific windows,” says the South African Table Grape Industry (SATI).

China: Table grape exports face competition in Southeast Asia
Table grapes from Yunnan province are on the market from May to July, at the latest November for some areas. Judging from the current situation, compared with previous years, the overall output and export prices have not changed much this year. Sichuan grapes on the market from middle of July to early of October. Production under plastic tunnel and greenhouse cover is growing. Popular varieties are Crimson Red and Shine Muscat. Overall, table grape prices have declined slightly this year, but for many growers, prices are still good and sales have increased.

Currently, imported grapes from Australia, Chile, Egypt and other markets are still available.  Due to difficulties exporting to China during the pandemic, some overseas grape exporters have reduced their exports to China and turned to other Asian regions. This supply is weakening China's grape export position in overseas markets, mostly in Southeast Asia. In contrast, the export volume of China Red has not grown significantly.

Yet China's competitive advantage holds; compared with other countries, the shipping period from China to Southeast Asia is shorter, and there is still an advantage in price

North America: Better weather for grapes this year, but possible logistical issues loom
Grape supplies in North America are transitioning to California’s San Joaquin Valley.

“We’re transitioning from the Mexican crop and it looks like things are running about 10 days ahead of last year,” says one California shipper. He notes that the area has had more normal to slightly warmer weather this season, which is conducive to good production. “It hasn’t been too hot, unlike that extreme heat we had last summer. So the plants are able to rest at night with the cooler nights and then grow vigorously during the day. The vines are very healthy and the crop looks good,” he says.

He notes that the crop, which is roughly the same size as last year, will provide ample supplies of good quality grapes. “The berry size on the grapes right now is larger than normal so we’re going to be able to deliver consistent sizing to consumers along with what we believe is a great-tasting product. Out of the gate, we’re going to have high sugars in the product,” says the shipper. 

Coachella, California is also still producing grapes right now but wrapping up production rapidly. “This is really the transition week where more people are getting into harvesting grapes in the San Joaquin Valley and with just about everybody going by next week,” he adds. 

Meanwhile the crop is coming into strong demand. “Most retailers are looking forward to the California crop. They believe they’re going to get more consistent sizing and a higher quality grape. So there’s good strong demand going into the season,” says the shipper, noting that consumers continue to look towards the newer varieties of grapes that offer great eating quality and big berries. And given the stretch on consumer’s wallets these days, consumers are also going to be very selective with what they purchase. “It’s going to be important that we deliver value to the customer for the near future---that value being great quality at a reasonable price,” he says. 

With stronger demand meeting that size of a crop, prices are expected to be slightly higher this season.

Yet with moving the crop, the shipper notes that the ports could continue to be a challenge this season when exporting grapes. “California has recently changed the way independent contractors are defined and we believe that’s going to take several trucks off the road. It could be working with the ports and moving product into the ports is more difficult,” he says. “It’s also just going to drive the freight cost up.”

South America: “It has been the best season in Chile in terms of production and quality in many years, but the worst in terms of logistics and return to the producer”
Logistical problems have had an impact on the results of the Chilean table grape export campaign, whose initial projections foresaw a growth that the USDA itself estimated last December at more than 20% compared to the previous season, when the weather conditions reduced the Chilean harvest.

The lack of available freight and the accumulated delays have been responsible for millions worth of losses for the sector in shipments to the United States, which even led exporters to consider taking legal action against shipping companies and the Port of Philadelphia. This problem has not been exclusive to shipments of table grapes from Chile to the United States.

"Arrivals in Europe have also experienced a lot of delay and the fruit has been arriving with quality problems," shares a Spanish importer. "The port of Rotterdam was congested since with the war many ships that were going to Russian ports such as St. Petersburg, stopped in the Netherlands, and container delays reached 15-20 days."

“Unfortunately, these delays meant that all the grapes arrived on the same date and only importers that had programs with supermarkets in Europe were able to sell them. The rest was put on the open market, but consumption in the colder months is generally lower than at other times of the year, so the import season has not been easy at all. We also have increasing pressure from the grape supply from Peru, which is producing much more fruit; All the Chilean grapes had to be sold in April and some in May, while products from Peru also continued to arrive."

“On the other hand, freight prices, despite the fact that they arrive with delays causing great problems for importers, have not stopped increasing. In the grape season in Peru they paid 7,000 dollars, while in the season in Chile, which comes just after, they have risen to 12,000. The freight alone has meant a cost of between 40 and 50 cents per kilo of grapes, to which must be added the price of the product itself and, as it was difficult to sell, storage in cold chambers to preserve the fruit."

"I would say that it has been the best season in Chile in terms of production and quality in many years, but the worst in terms of logistics and return to the producer," says the importer.

Australia: Table grape exports to Vietnam reach record highs
It is the off-season for Australian table grapes, after a season that posed many challenges for growers. Not only did the ongoing shortage of workers make the whole harvest slower in most growing regions, but the weather also posed many problems to the crops, supply chain and in some cases on the quality front. One grower from north western Victoria stated: "The season did not end as expected, as just prior to the veraison of the grapes, we got wet and humid conditions hitting us for about 10 days in a row. This triggered all kinds of problems delaying sugar accumulation and stopping development colouring for most varieties. On top of this, lockdowns in other countries coincided with more delays on logistics and 1 or 2 weeks with blank sails. But the fruit was in very high demand, thanks to our loyal consumers and customers." He added that some other growers were left with many acres of fruit hanging, due to no market for it. Pruning is underway for the start of the next season in the summertime.

However, one piece of good news for the table grape industry is that according to statistics, Australian table grape exports to Vietnam reached record levels in 2021–22, thanks to improved trading conditions and ongoing export diversification efforts. A study found that between July 2021 and April 2022, table grape exports to Vietnam were valued at $63 million, which is an increase of 98% compared with the same period in 2020–21, and it is forecast to keep rising. Additionally, Vietnam’s share of total Australian table grape exports rose 6 per cent over this same period.

Next week: Global Market Overview Limes!


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