EU grape market: Red seedless to come under pressure amid changing shipping patterns
The European red seedless table grape market is set to come under heavy pressure in April amid a likely clash of supplies from Chile and South Africa, according to a supplier.
Speaking to FreshFruitPortal.com, Robert van Melle of Netherlands-based Origin Fruit Direct also explained that quality and condition issues with white seedless grapes from India over recent weeks had resulted in low prices for that category, despite a shorter than expected season.
In addition, he explained that retail demand for grapes has been considerably lower than normal over the last couple of weeks for this time of year, following a period of sky-high demand as panic over the Covid-19 pandemic spread throughout Europe.
On the situation with red seedless grapes, van Melle explained that South Africa had shipped a higher proportion of its late-season grapes to Europe this year due to the outbreak in Asia.
"We see different shipping patterns now from South Africa," he said. "There is an unexpected and unanticipated wave of red seedless coming from there to the European market, and that's because it looks like the last part of the South Africa season is being diverted from the Middle Eastern and Chinese markets to the European market. That will have an effect on red seedless grapes."
"At the same time we realize the quality of the last South African arrivals will not be top-of-the-line. The Hex area suffered some serious rainfalls in the beginning of their harvest. That still has its effect on the Crimsons and Scarlottas."
Meanwhile, Chile has recently turned its attention from the U.S. to the European market due to the last loading for the USA marketing order that took place last March 25.
As of now and for the next months to follow, arrivals into the US will be charged with higher import duty in order to protect local production. It is a yearly returning occurrence, but it means the main focus of Chilean packers now will be Europe. Already, until today, Europe has shipped already 45% more Chilean grapes compared to last year, van Melle said.
Origin Fruit Direct Crimson grapes being harvested in San Filipe, Chile on April 2
Chile is heavily focused on red seedless grapes in Europe, having lost a lot of white seedless market share to India over recent years. The first grapes began to arrive the week of April 23, and the country normally has a window of five to six weeks of arrivals, he said.
"The red seedless grape market will come under pressure for the weeks to come now. At this point, I'm really concerned about the effect of the coalition between South Africa and Chile and about the effect of the so-so last arrivals from South Africa," he said.
Indian white seedless grape season leaves much to be desired
In the white seedless market, India - the main supplier over February, March and April - had a challenging season due to late and heavy rains in the country caused by the Monsoon phenomenon that delayed the harvests and greatly affected the quality and condition of the grapes.
Having started a few weeks late, the season has also ended a few weeks early due to the nationwide lockdown, which led to many farms and packing houses abruptly stopping a couple of weeks ago, much sooner than normal.
"However, European retailers likely would have stopped anyway with the Indian program because of quality reasons. Some of them tried to shift to red seedless, of which there are more than enough available for now, and some of them would just not replace them," van Melle said.
"We knew months ago we were going to have a challenging Indian season. The rains are the reason it was delayed - which resulted in very good prices for whites in February - but also the reason why the first four of five weeks of arrivals from India were very bad. There were lots of rejections.
"What I'm afraid for now is the reputation of Indian fruit. It had just gotten to a decent level with a constant high standard of quality and condition over the last couple of years as they were sending very good fruit, but now their reputation's taken a bit of a hit."
He said that at present white seedless prices were lower than red seedless.
Grape market demand stalls in Europe following March spike
The representative also explained that in early and mid-March Origin Fruit Direct had some "very good selling weeks" as retailers and consumers stocked up amid the implementation of lockdown and the spread of Covid-19 around the continent.
However, towards late-March, "everything slowed down".
"Now for the second week in a row we had been moving seriously reduced volumes," he said. "Retailers are saying they don't have the sales, canceling and delaying promotions, so we definitely see the effect of the higher consumption of the previous two weeks. In some countries, we see this effect worse than in other countries."
But he expects the situation to stabilize soon and retailers will start demanding the normal amount of fruit.
"We do realize that for us the wholesale markets have been almost totally closed for the last three or four weeks, so that demand has fallen away. I personally think that it will leave to higher demand from retail, because people still need to eat."
He added that loose-packed table grapes for wholesale are now fetching "ridiculously low" prices, if and when they're being sold.
On the other hand, it's likely the stop of white seedless exported from India and their current low level of condition will lead to a harder pull on red seedless. This effect could possibly release the pressure coming from the huge arrivals from South Africa in the next few weeks, he said.
Van Melle also mentioned that he had not seen issues related to transportation of logistics for fruit in Europe, but he is concerned that a possible lockdown in Chile could affect harvests and export operations there.
"Those are actual concerns at the moment," he said. "But it's hard to know what really will happen in the market over the coming weeks - that's the only safe conclusion I can have."