U.S. Navel orange inventories "uncomfortably high", says Greenberg
A Capespan North America executive says the U.S. Navel orange inventory is "uncomfortably high" following a 54% year-on-year rise in Chilean shipments through week 34.
In his week 35 market report, chief operating officer Mark Greenberg said the increased volume came at a time when both South Africa and Australia had higher exports to the U.S. as well.
"Market prices reflect the oversupply as sellers cannot afford to be excessively discriminating in accepting purchase orders," he said.
"The situation is mitigated, to some degree, by the fact that school is back in session and citrus consumption is on the rise.
"The momentary general shortage of easy peelers in the market can also only help navel orange movement."
On that note, Greenberg highlighted easy peeler product arrivals were insufficient to meet demand in a period of transition from traditional clementines to late mandarins.
"Chilean clementine loadings dropped significantly in weeks 30 through 33 which has translated into lighter arrivals in week 33 through 35 and light arrivals expected in week 36.
"Nonetheless, through week 34, cumulative Chilean soft citrus loadings to the East Coast were up 33% from 2011 but were down 20% on the West Coast.
He said these market dynamics pushed up clementine prices to the range of US$28-30 for 10x3lbs value-added packages in week 35.
"The impact of these higher prices on grower returns for the original arriving 15kg cartons will be attenuated by poor pack-outs owing to the age of the late stock as well as by erratic condition of much arriving product."
Greenberg expects a robust market for late mandarins this week.
"Chile is expecting to have a strong W. Murcott crop and we expect that by week 38, prices may start to soften to the US$34-36 range. But with strong autumn demand, prices ought not to weaken much below that."
At the time of the report's writing, Greenberg said Peruvian Minneola arrivals in the U.S. were complete, with the country having shipped 330 containers to the U.S.
"In this crowded citrus market, Peruvian Minneolas are moving at US$12 across the board. Product movement has been slow, but with fewer sellers in the market (as many of the early players have completed their programs), movement of the remaining fruit should pick up.
"We would hope that the gap in clementine volumes will enhance Minneola movement, but this has not yet been widely observed."