By Mark Greenberg from Fisher Capespan
US: Slow market for imported table grapes
listless fashion with light sales and little momentum to speak of. It emerged from the
holiday period equally in the doldrums with soft prices brought about by a relatively heavy carryover of imported grape inventory - the result of light sales and relative
disinterest on the part of the retail chains.
The slow post-New Year movement is no surprise. The holiday aftermath always brings with it light sales and softer pricing. Most chain store buyers will likely have spent the early days of this week looking at their (expensive) inventories and contemplating their positions. By next week, we expect to see movement pick up, spurred by the softening price structure combined with California table grapes becoming less of a factor in the market.
It is early to start analyzing in any detail why there has been so little interest in
imported grapes in the earliest weeks of this season – especially those leading up to
Christmas. But, it does appear that this season, US chain stores are exhibiting a
diminished appetite for high-priced, early season grape imports. These high prices
necessitate high retails that, in turn, encourage only light movement while carrying the concomitant risk of expensive shrink. It is not clear if this is only a passing phenomenon related to the unsettled economic environment. But, the continued availability in the market of more modestly priced domestic grapes, and other substitute products offered at attractive prices, have allowed the chains to pay less notice than usual to early season imported grapes.
This is all quite ironic, actually. The stakeholders in the imported grape industry
genuinely believed that the freeze and bizarre snowfall in Copiapó in the spring would
dramatically reduce early imported grape loadings. The market was told to expect short supplies of early grapes which, in turn, created, very optimistic price expectations with growers and receivers quite certain that the market would generate grape prices in the US$ 30+ range. Of course, with the expected light volume (and high price expectation) nobody was pushing for early January imported grape promotions.
But, alas, the fruit did come. Indeed, more Chilean grapes have been shipped to the
east coast through Week 1 this season than last. But, with no promotional activity, and with pre-Christmas imported grape prices still high and movement light, the chain stores have been content to focus on berries and cherries and domestic grapes leaving a backlog of imported grapes as we enter Week 2.
Red Seedless:
The red seedless grape market remains unsettled and confused. Today, chain
stores can purchase California red seedless table grapes at US$ 14 – 16 FOB point
of west coast loading.
Chilean Flames are selling on the east coast at US$ 16 – 22 on spot market sales
with some promotions next week at US$ 16 – 18. Peruvian Flames are selling at
US$ 18 – 24. For both Chilean and Peruvian Flame shippers, these are prices well
below expectation for this time in the season.
These prices, of course, will begin to allow the major chains to move big volumes
and help clean up some of the backlog in inventory. This, combined with promotional
activity as we enter Week 3, will serve to tighten up Flame supplies and help
stabilize the market in the US$ 18 – 20 range.
White Seedless:
The white seedless market is showing some life, but it is not without its
complexities. Brazilian Festivals continue to be available at prices of US$ 18 or
less – the Brazilians having sacrificed much of their credibility this season with
poor arrival condition.
Chilean Perlettes continue to be available in a market where they are not especially
welcome. They are moving at US$ 12 – 18 (some sales even lower). Few chains are
interested and the wholesalers even less so.
Peruvian Sugarones are selling at US$ 20 -24 on light volume and Chilean Sugarone
and Thompsons are selling at similar price levels.
Red Globes:
Red Globes from Peru (and a light volume from Chile) are selling at US$ 22 – 28,
size depending.