"Incredibly strong" U.S. table grape market expected during SH supply transition
Last year's table grape export season may have been one for to forget for many Chileans doing business in the U.S., but anticipated supply dynamics from California and South America are setting the stage for strong market conditions over the coming months.
"I see the transition as being the exact polar opposite of last season," Capespan North America CEO Mark Greenberg said.
"California is probably going to be making an earlier exit than previously anticipated, and certainly an earlier exit from the market than it did last year.
"So we're going to see more opportunities from imported table grapes earlier in the year."
However, he noted that growers in northern Peru - one of the first counter-seasonal supplying regions to enter the U.S. market - were set for a much lighter crop due to heavy rains and flooding earlier in the year.
A cooler spring in Chile than last year will also result in volumes from the northern Atacama region arriving later than last season, he said.
"We’re going to see what I hope will be a well-paced market and well-paced arrivals," he said.
"We’re not expecting there to be a glut of fruit at any moment of time from different origins. We're hoping that everyone will have their weeks in the market and that we’ll see orderly arrivals and pricing."
General expectations are also for high-quality fruit from both South American countries, he added.
Greenberg explained California would likely finish up its season earlier than last year largely as a result of excessively hot summer temperatures along with some unseasonal rain in August.
These weather factors inflicted stress on the fruit and mean many growers and suppliers may not be able to store their fruit for as long as in previous years, he said.
Northern Chilean exports face possible decline
Meanwhile, the head of New York-based Direct Source Marketing expects lower exports from northern Chile this year.
"If you go all the way back to this past January, growers in the northern region of Chile were really affected by poor market results here in the United States," company owner Ira Greenstein said.
"The market results were so poor that many of the growers are actually contemplating not sending similar volumes to the U.S. this year."
In addition, he said berry sizing from northern Chile was often smaller than what most U.S. retailers were looking for.
"That’s also where growers in the north of Chile were really hurt last year. There was too much volume of small fruit in the market and no support from U.S. retailers to take that small fruit.
"So you’re going to have a combination of less fruit coming because of last year’s market, as well as less fruit coming because U.S. importers will not be taking in that small fruit this year."
Greenstein recently visited some of Peru's northern growing regions including Piura, and explained there was "tremendous crop failure and loss of production" due to the flooding.
"Those growers were not able to really manage what they needed to do from an agronomy protocol to prepare for this season, and the effect of that is substantially less set in these vineyards," he said.
"When you talk specific major growers in those northern areas of Peru, there were expectations three or four months ago that they would be down 30-40% - our indication says that it’s now going to be closer to 50-60%."
He expected volumes of seedless grapes to be slightly more affected than Red Globes - the predominant variety in the country.
Carlos Zamorano, who heads up Peru's table grape grower body Provid, earlier this month estimated that total volumes from the country would be 30% down year-on-year.
"Up until now that northern region of Peru has really built significant momentum. It's been sending increased volumes of seedless grape varieties into the U.S. market, in late November, December and all the way through January, and we are going to see substantially less volume this year," Greenstein said.
It could be another year or two before growers can fully recover, he added.
The representative also said California's season would end up shorter than normal due to the hot summer temperatures, and questioned whether or not the industry would make it until the end of the year.
He said the situations in California, Peru and Chile meant there should be an "incredibly strong market" in December and especially in January before the larger volumes of central Chilean grapes arrive.
However, he emphasized this outcome was by no means guaranteed.
"Markets get set because of initial volumes, but markets flow based on retail support," he said.
"You could have substantially less volume, but if you scare your retailers into not promoting table grapes in December or January you can take a very short market and turn it into a very long market pretty quickly."
He said this situation may well occur if importers set their prices too high.
Table grape production is expected to be more normal from southern Peru and central Chile, with the latter having received a good amount of rainfall and snowfall over the winter period.