According to information provided by Mark Greenberg, the President and CEO of Capespan North America, by week 49-2018, the level of anxiety among national and foreign producers, importers, and sellers of grapes continues to increase as the local table grape season continues. "The transition from national sources (California) to imports has not gained any real traction. Domestic sellers still have a lot of product to move. Foreign producers have tried valiantly to stay away from the US market as much as possible. However, there is a limit on what can be introduced in other markets," he said.
Greenberg added that, apart from having a large domestic volume of fresh table grapes, there is 37% more grape in stock (cold storage) than on the same date of last season. According to data provided by the Agricultural Marketing Service (AMS) of the USDA issued earlier this week, on November 15, 2018, there were 10,745,620 boxes of table grapes stored in cold storage, while on the same date last year there were 7,800,339 boxes. "The recent rainy and hazy climate in the Central Valley has allowed most producers to complete their harvest, and only a small group of producers still have to harvest the late red varieties."
"The net decrease in holdings of almost 3 million boxes per week suggests that California should be without fruit by the end of December. However, few believe that this will be the case because the slower movement and the greater retail transition to imports in the weeks leading up to Christmas will affect the local grape sales rate. As a result, some carriers from California have stated that they will have seedless red grapes throughout all December and into the new year," the CEO said.
The president of Capespan North America added that the impact of the great harvest of US table grapes has been exacerbated by the imposition of retaliatory tariffs on US agricultural products that has weakened the export demand. "In order to offer some relief to table grape farmers because of the difficulties these rates have caused, the USDA announced it plans to use US $10,000,000 to purchase table grapes. The purchases should be made at market prices during the next weeks. This program could absorb up to 600,000 boxes of table grapes from the remaining national inventory, "the executive observed.
Currently, the price for California seedless white grapes is US $20-22, FOB. While there are reports of a greater number of rejections by retailers of white seedless grapes, these rejections have been sporadic and may simply be a reflection that you get what you pay for instead of evidence that the product does not meet the retailers' specifications.
Prices for California red seedless grapes stand at around US $16.95 and less if the seller does not have white grapes to accompany it. There is little expectation that prices for red seedless grapes will increase, even as national inventories decline. There are Peruvian Crimsons and other red seedless varieties waiting on the sidelines, and arrivals are increasing.
Prices decrease
Mark Greenberg said that according to USDA data, the average FOB prices for table grapes in Week 47 were 22% lower than in the same week of the previous season. During October of this year, prices were 12% lower than in October of last year.
"Imported table grapes continue to arrive from Peru. Since week 42, Peruvian carriers have shipped 1,916,000 boxes of seedless table grapes to North America, with 1,502,000 sent to the USEC. The volumes loaded in weeks 47 and 48 increased substantially when compared to the previous weeks. In fact, Peruvian carriers have loaded 988,000 boxes of seedless grapes to the East Coast in the last two weeks, which will translate into a large number of arrivals towards the end of Week 50 and Week 51."
According to Greenberg, the price of Peruvian white seedless grapes in the USEC reflects the increase in inventory, while sellers try to wait for the California season. Sugarones and Thompson Seedless are priced at US $ 24-26 (depending on size) although the fruit is being moved in small volume at prices that are sometimes substantially lower. There is a certain expectation, or perhaps just a hope, that retailers will soon move to white seedless imported grapes. For now, there is no evidence of any substantial change apart from the pre-programmed commitments.
The offer of red seedless grapes from Peru at the USEC has been mainly comprised of Crimsons and Flames. Since California's grape inventory tends to seedless red varieties, Peruvians Crimsons and Flames are being traded at US $18-22 and their movement has been very slow. In recent weeks, new varieties of red seedless have been loaded, and the market will soon see an increase in Sweet Celebration and Allison volumes.
To add complexity to the market, the harvest in Chile's III Region (Atacama) is also underway and that fruit will soon reach the USEC. Chile is expected to send less early flames, but the fruit that will arrive will compete with that from California and Peru.
Source: SimFRUIT according to Mark Greenberg's report