India unlikely to divert table grape volumes to Europe despite Russian entry issues

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India unlikely to divert table grape volumes to Europe despite Russian entry issues

Indian table grape exporters are unlikely to divert shipments to the European market despite the major challenges they are facing getting fruit into the Russian market following a regulatory change.

Local media Indian Express reported earlier this week that Indian exports had been halted to Russia, but Nagesh Shetty of Deccan Produce clarified to that market access has not been suspended. He explained that a technical change in the documentation required by Russian authorities had led to major delays of up to 10 days for the containers to clear port inspections.

"They have changed the parameters and wording of the documentation, which is very difficult to incorporate with short notice," he said.

"What is happening is Indian produce that is getting into Russia is taking a long time to clear because phytosanitary sanitary officials are taking each container and having them checked. Invariably it is taking around eight to 10 days for the containers to clear and get into the country."

It is currently peak season for Indian table grape exports to Russia, with up to around 100 containers being shipped per week to the destination, split evenly between two ports - St Petersberg in the northwest of the country and Novorossiysk in the south. 

Shetty believed that the containers going into St Petersberg had been more affected, and expected that the backlog of shipments could worsen as more fruit arrives at the port.

However, he did not anticipate there would be issues with the quality or condition of Indian fruit in the Russian market despite the delays, nor did he expect that shippers would divert volumes to the European market, where India's grape season is now ramping up.

"The kind of fruit that goes to Russia is different because the European client is more used to more uniform fruit. There's definitely a difference. So I don't think there’s going to be a flood of fruit into Europe because of the issues in Russia - we already have enough fruit for Europe," he said.

He added that the industry is hoping the situation is resolved as soon as possible, but he said that it is out of the industry's hands.

Meanwhile, Robert van Melle of Netherlands-based Origin Fruit Direct - in which one of India's largest produce companies, Mahindra, holds a majority stake - also expected that the issues Indian shippers are facing in Russia would not result in additional challenges for the European market.

He explained that Russia as of this year had started to actively verify the MRLs on table grapes, causing port delays.

"At the moment they have blocked some fruit and they are awaiting some test results. After those results the Indian shippers believe they can continue the supply into Russia again, so the situation should resolve itself. But it has been more challenging," he said.

He added that he believes Indian exporters had learned lessons from two years ago, when high volumes of Indian grapes were an important factor that led to price collapses in the EU market.

"Last year they had a better year, and this year so far they are about 5% or 10% above that, so we can expect a little bit more pressure on the market, but I don’t think there will be much effect on the European market due to the Russian issues."

Speaking about the 2018-19 EU table grape import season more generally, he said that the season had started off under pressure due to Southern Hemisphere fruit overlapping heavily with local supplies and Peru shipping far more volume.

"Prices this season have been considerably lower than last season," he said.

He said Peruvian grapes had flooded the market over recent months, attributing the higher year-on-year volumes both due to the recovery of production following severe flooding in the north of the country in 2017 and also due to high table grape stocks in the U.S. market late last year.

The white seedless grape market had been under the most pressure but is now recovering, while the red seedless market, however, remains under heavy pressure. South Africa, which Van Melle said was running a relatively normal season with a slight increase in volumes, was now shipping very low volumes of white seedless grapes, with the majority of supplies being red seedless grapes.

But despite the current market issues, he was optimistic that market conditions would improve, in part as Peru's season is winding down and U.S. market conditions have improved greatly. Volumes from Chile will soon start to ramp up.

"I certainly hope but also believe that Chile will have a better season than last year in Europe," he said. "So far things are looking good. The heatwave has limited berry sizes for Crimson in certain regions, but the crop overall is looking good and we're setting up programs with our clients."


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