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Will California be able to re-start grape exports to Asia?

It would be an understatement to say that 2022 was a challenging season for California table grape exports. “Inflation reared its head, but what played a bigger role is that the dollar went incredibly high, which made our product super expensive abroad,” says Nick Dulcich with Pretty Lady Vineyards. Countries like Indonesia, Vietnam, Taiwan, Malaysia, and the Philippines used to be big supporters of California grapes, but they reduced their volumes. “The high dollar really affected our exports in a negative way,” commented Dulcich.

That’s not all. China’s table grape production has been increasing and their excess volume hits all Pacific Rim markets for a fraction of the price due to free trade agreements. “Our competitor has a free trade agreement with every Asian country,” said Dulcich. “This brings California in at a significant disadvantage in an already shrinking market.” Another importer of California grapes, South Korea, now grows Shine Muscat grapes themselves and they have enough supplies until a few months after their season has ended.

“In addition, shipping costs have risen greatly. I used to pay $4 per box, which turned into $6/box last season,” Dulcich shared. Another disadvantage for California growers is the cost of labor. “We are dealing with a minimum wage that’s north of $15 and closer to $20 in some regions of the state.” If that’s not enough, table grape production has significantly increased around the globe. “China, Spain Brazil, Peru, Australia, Namibia, South Africa, Egypt all grow table grapes, and the list goes on and on and on.” As a result of all of this, California’s competitive advantage has diminished, and exports have dried up.

Extreme heat and record rainfall
Despite everything, Dulcich remains confident in the export market, weather permitting. “We had to deal with extreme heat last summer, which basically ruined our mid-season green grapes.” It was the hottest summer ever and although the grapes looked fine when they were being packed, they didn’t arrive in good condition after a few weeks on the water. This winter, the situation turned around as California saw record rainfall and record snowfall. The Bakersfield area received 9 inches of rain while Fresno, another key grape growing region, witnessed close to 17 inches of rain. This is at least double the amount of a typical winter. “Due to all the water, the vines take in all the nutrients, resulting in an absolutely beautiful bud break,” said Dulcich. Pretty Lady’s vineyards receive their water from snowmelt all the way up at China Peak in the Sierra Nevada. With more rain and snow still coming, the situation looks promising for the upcoming season.

Bud break.

Export opportunities
“If we have good fruit and if the value of the dollar is not so extreme, the export market has great potential,” Dulcich believes.” It’s up to the grower to be focused on quality and in that light, he made some changes. “Black grapes are losing popularity overseas and a few large supermarkets have discontinued them. In response, we’ve made the decision to reduce the acreage of Black seedless grapes and replace them with proprietary green grapes as well as special-flavor proprietary red grapes. I believe these Sun World varieties will be successful in the export market.”

What will likely also help exports is the lifting of Covid restrictions in China. “This enables everyone to move freely, and I’ve heard some wholesalers are excited to take California grapes again this season, so let’s hope things can get re-started.”

Exports have always been a big part of Pretty Lady’s sales and to help them get re-started, Dulcich has hired Eric Coy. “He has more than 15 years experience in the industry and exports will be his focus. He started with Pretty Lady Vineyards this past Monday, March 20th and Dulcich is confident Coy will play an important role in re-starting shipments. “Where there is a will, there’s a way.”

Eric Coy and Nick Dulcich.

For more information:
Nick Dulcich
Pretty Lady Vineyards
Tel: (+1) 661-792-6360
[email protected]