During February
Optimistic Chilean table grape exporters expect price improvements in the US market
The strike was felt quite strongly as it should have been the 4th season with high prices for table grapes, the biggest cultivated sector in the country. Although, the opposite happened - prices dropped right from the start.
"As for exports, boxes value dropped between 30% and 40%, regarding shipments from last season", admitted Juan Colombo, manager for Subsole table grape.
The price drop is not just a conjectural problem, especially for the producers that open the season, but it also reflects a structural change in table grape commerce in the US, the main market for Chile.
However, the storm clouds are disappearing. February will mark the beginning of the price recovery. The end of the season is also viewed with optimism, due to changes in Chinese and European demand.
California renewed
When explaining the drop in price, the growth in Peru and Brazil's presence are the most common answer. Although, the most important variable is the change in the offer of Californian late grape. "That factor explains 7% of the scenario we have experienced in the last weeks", said Colombo.
It's about the overcrowding varieties like "luisco", Autumn king, scarlotta or vintage red, among others. They allowed US producers to reach growing amounts in the Northern Hemisphere Winter, just when the Chilean offer starts arriving.
This tendency is expressed more intensely this year, due to expectations of a strong drop in Copiapó's production, resulting from Spring frosts. They talked about a drop up to 2,000,000 boxes. US importers and distributors opted for a slower sale speed, retaining a significant amount of boxes in the fridges, mainly Californian, but also Peruvian and Brazilian, to take advantage of the expected price improvements in December and beginning of January.
While in mid December 2009 they kept 1,100,000 boxes of Californian grape, in the same period of 2010, the number was 2,600,000 boxes. In 2011, the stock sky-rocketed to 4,200,000 boxes by mid December.
We must account for the fact that usually a box of Californian late grapes is traded at US$15, mainly due to lower quality. In exchange, the usual for Chilean early grapes is that they're shipped at about US$40 per box. The temptation to take advantage of the window left by Chile was too big.
The problem is that the renowned drop wasn't like that. The exported amount to the US until the first week of January was of 62,700 tons, 500 tons more than in the same date of the previous season.
The difference between expectations and reality is explainable mainly because a large amount of grapes of small size that are usually not qualified for shipment were packed.
Chilean exporters could not say, this time, that their grape was better than the Californian one. Firstly because the size is an important part of their offer; secondly because the North-American grape arrived with better attributes than in previous seasons.
Recovery is coming
Anyway, the nightmare of December and January is about to end, paradoxically thanks to low prices in the begin of the season.
"Fruit's demand in the US, despite news talking about recession, is good. Moreover, consumers there are quite sensitive to prices. As grape is not expensive this Winter, retail chains quickly reduced their stocks", affirms Manuel José Alcaíno, president of Decofrut.
The brake in prices for Chilean grape in the US would be noticed in February. When the month starts, the adjustment in the offer made by Aconcagua producers in mid January would be felt. It must be taken into consideration that a boat takes 12 days to go from Chile to the US.
Even anticipating the scenario ahead of February speculation is involved, there's a bunch of elements allowing to bet on a price recovery to be maintained.
After the growth in Chinese demand last year, the appetite for Oriental importers for Chilean table grape grew. It's expected that purachese will be raised to a bit more than a million boxes.
Source: Revista del Campo