Chile off to slow start

Table grape supply gap as California winds down early

“Christmas is just a day away and the table grape market is hot due to market demand that is running well ahead of available supply,” says Mark Greenberg with Capespan North America. “The California season has ended early, the Peruvian deal has moved quickly and the start of the Chilean season has been slow with insufficient volume to fill vessels which has also served to complicate shipping lines’ sailing schedules and arrival timing.” Matters are not made any easier by a relatively short supply of competing products like cherries and blueberries which have also faced complicated harvests.

All of that said, the light supply of table grapes in the market is comprised of weak California product, the remains of a light Brazilian program, Peruvian table grapes from both the north of Peru as well as Ica and, of course, the first of Chilean arrivals.

A number of retailers have traditionally depended on California table grapes to carry them through Christmas, but the remaining product this year has proved to be problematic and much of what has lately been shipped east has not made sound arrival. This fruit has usually mitigated early season supply pressures in the east. But not this year. 

Peru has increased shipments over last year
For its part, Peru has loaded 1.5 million cases of white seedless table grapes to the USEC through Week 50. This is a substantial increase over the 836 thousand cases shipped through the same period last year. Peruvian exporters have also loaded 1.4 million cases of red seedless grapes - twice the volume shipped last year over the same period. The Peruvian red seedless shipping period is virtually over and white seedless shipments will also now decline as the seedless crop comes to an end. Light rain was reported in Ica during Week 50. The rain was reported to not have had great impact on product quality and condition, but it will likely hasten the last days of the harvest. Peruvian Red seedless arrivals will come to an end by the first week of January and white seedless arrivals will continue only a couple of weeks beyond that.

Chile is off to slow start
The earliest weeks of the table grape harvest in Chile were slow and on a delayed schedule. The harvest is only now finding sustained momentum. The first Chilean bulk vessel put into the USEC in Week 51 carrying 353 thousand cases of table grapes which were quickly absorbed by the market. The Baltic Moon arrived on the USEC late in Week 51 with a light load of 176 thousand cases of table grapes. This will be the last Chilean bulk vessel arriving with fruit available for distribution for the Christmas week. The subsequent vessel, the Chiquita Rostock, will not arrive until on the USEC the day after Christmas with cargo which will, at best, be discharged December 26 and 27 and only get into circulation a couple of days before the New Year. 

Strong pricing
Through Week 52, red seedless grapes are hard to find and market demand has gobbled up what little supply Chile has provided and what remains of the Peruvian Flames and Crimsons. Red seedless pricing in the market is US$ 36 - 38 or more for Large (700) and Medium (500), provided condition is good. 

The white seedless table grape market is not quite as strong. There is a wide range of quality and condition in the market and there is no shortage of problem lots from Brazil, Peru and Chile. The market for white seedless grapes with good condition is US$ 34 – 36 for Large (700) and US$ 30 – 32 for Medium (500). X-Large (900) will get US$ 36 – 38. White seedless fruit showing condition issues is selling at US$ 26 – 30 depending upon the nature of the issue and the caliber of the product. 

Red Globes from Peru are selling at US$ 20 – 22, size depending. These prices will generally hold through Christmas with some chance that they could soften somewhat in the period between Christmas and New Year, especially on red seedless. This is not because supplies will change markedly, but because post-Christmas demand may well soften although supplies will remain light into January.

Prices expected to soften at start of 2016
Table grape prices historically dip in the New Year. This is the effect of a combination of factors including inventory build-up during the holiday period, greater anticipated weekly arrivals as the Chilean season gains steam and the post-holiday retail “hangover” giving rise to slower sales during the first days of the year. This year, there will not be any significant inventory carryover. But arrival volumes will pick up and the market will be better supplied come the New Year. So, for the first week of January, we would expect table grape prices to soften, but remain in the “$30’s” for solid fruit showing good condition.

The challenge for this market will come when volumes pick up and sellers need to get their retail customers to move product at a faster rate of sale. Predicting when this will happen, and reacting to it in a timely fashion, will be the key to success.

For more information:
Mark Greenberg
Capespan North America
Tel: (+1) 514-739-9181

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