by Mark Greenberg
US: Table grapes regain chain store attention
It is gratifying and comforting to see that table grapes (especially red seedless table grapes) have finally regained chain store attention. This has created brisk movement out of the coolers and has generated market momentum through Week 7. This is the sort of momentum that appears to be sustainable through the coming weeks as the Flame arrival season finishes up and the Thompsons get set to arrive.
The table grape market virtually belongs to Chile (no surprise there) and the small
caliber Flames that had served to dampen retailers’ interest in pushing table grapes
have moved through the system giving way to a generally higher quality and more
attractive product. This, no doubt, has been a factor in the revived interest of
retailers.
Through Week 6, Chilean exporters have managed to load a total of 145 723 metric
tons of table grapes to the US (east and west coasts combined) or around a 5%
decrease through the same date last year. This is even in spite of the fact that the
Chilean grape industry has come to the broad consensus that the table grape harvest generally continues to run earlier than 2011 by as much as ten days. This leaves little doubt that when the season is done, total Chilean grape volumes to the USA could be as much as 10% below last season’s arrivals. It is noteworthy, as well, that through February 10, the allocation of table grape tonnage as between the east and west coasts has fallen more into line with last season’s trend.
Flame arrivals have peaked and weekly volumes will now begin to subside. Thompson Seedless are coming into heavy production and Thompson arrivals will start to increase dramatically in Weeks 10 and onward. From that time (and probably through March) Thompsons will dominate the market to the exclusion of red seedless grapes. The Crimsons will follow once the bulk of the Thompsons have been harvested. Once again, we will see what has become an annual feature: A market dominated by one or the other color, but never a real balance.
With the Thompson harvest also likely to end as abruptly as the Flame harvest and
with ultimately lighter than expected arrival volumes, sellers will be forced to balance the need to move fruit in the heavy arrival weeks with the sales opportunities that will present themselves in April when few Thompsons will likely arrive.
Red Seedless:
Overall Flame sizing in the market has improved with the effect of bringing the lower end of the market up more dramatically than the upper end. Where over the last two weeks the price for Large (500) was US$ 14-16, that price on the spot market has moved up to US$ 16-18 with not much product of that caliber available. The more plentiful X-Large (700) are trading at US$ 18-22 on the spot market with promotional prices at US$ 16-18. To the greatest extent possible, sellers will try to use their Large (500) caliber to meet their promotional commitments. It is ironic that a market so inundated with small fruit (300’s) three weeks ago is now well supplied with X-Large fruit (700), but could really use more Medium-Large (500) fruit to better serve promotional business to deliver value to both the retailers and the growers.
We expect the red seedless spot market to hold prices in the US$ 18-20 range for
the foreseeable future. There is not enough arrival volume to force a major
downward shift in price. The question is how many will sell at the spot price and
how many at promotional prices – the very prices that have created the movement
that has allowed the spot market to firm up.
White Seedless:
White Seedless grapes remain in short supply. Sugarone arrival volumes have
peaked and the market awaits the onslaught of Thompsons. Expectations for this
fruit is running high. Production conditions have been dry creating the further
expectation that overall condition will be strong. The Thompson crop on the vine is
not especially heavy and while that may reduce total expected volume by 8-10%, the market will still see three or four weeks of heavy arrivals which will require some careful promotional attention.
Today, the white seedless spot price is US$ 18-20 for Large (500) and US$ 22-24
for X-Large 700). As always, the real market range extends downward depending
upon the variety (Thompsons being favored) and the quality and condition, of the
product. There is not a lot of white seedless promotional activity in the market,
but that will change in the coming weeks when Thompson Seedless dominate and red seedless grapes take a back seat. A careful balancing act between taking Thompson Seedless promotions and holding onto inventory for sale into April will need to be maintained. Accurate and honest field information from Chile will be critical.
Black Seedless:
Black seedless arrivals have increased in Week 7, although staying in line with
arrivals through the same week last year. Prices, though, have declined in the last
week. The spot market for black seedless grapes is today US$ 18-20 for X-Large
(700) and US$ 16-18 for Large (500).
Red Globes:
Through February 1, 2012, Chilean exporters have sent 365 metric tons of Red
Globes to North America. This is less than half the volume sent through the same
date last season when shippers loaded 855 metric tons. With such a light arrival of
Chilean Red Globes, and with Peruvian Red Globes out of the market, the Red Globe
market is strong.Today, Red Globes on the east coast are selling at US$ 20-22 for X-Large (700) and US$ 18-20 for Large (500). Until arrival volumes pick up there is not likely to be any significant shift in price.