U.S. table grape market undersupplied following earlier concerns, exporters say

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Fears last year over the prospects of the U.S. table grape market during and after the transition to Southern Hemisphere supplies have resulted in what is described by Chilean exporters as a supply shortage.

California saw some of the highest stocks during the fall period last year, leading exporters in countries like Peru and Chile to focus more heavily on other markets such as Europe to avoid market saturation in the U.S. But that, combined with swift market movement in the U.S. at the end of the year, appears to have caused very different market conditions to what many had been expecting in October and November last year.

Andro Vidal, commercial manager of Subsole, said the Peruvian table grape industry had decided to ship a larger proportion of its fruit to the European market when it’s season began in October.

However, Sebastian Rodriquez, North American export manager of Verfrut, which has operations in both Peru and Chile, said the company shipped a regular proportion of its fruit to the U.S. – a risk that is now paying off.

“The exercise turned out well, but the market was challenging until the end of December. That’s when the California fruit started to clear … and that completely changed the picture for Chile, because throughout January there was no fruit in the destination,” he said. “The U.S. grape market remains undersupplied.”

Another factor is the lower shipments from Chile this season compared to previous years. 

“Until week 2 there were 2 million fewer boxes than at that time last year, and 7 million fewer than the year before that,” Vidal said.

Rodrigo Neira, head of exports at Exportadora Campillay, said that in his case, the first shipments were received in the U.S. in week 50.

“We are early exporters, so a lot of the early seedless grapes that would have gone there [to the U.S.] were diverted to Asia,” he said. Once the situation changed, Neira said the company began to ship black seedless grapes to the U.S. with good results.

However, the industry’s market dynamics and smaller production mean that there are still lower volumes in the market than normal for this time of year.

Green grapes in particular are said to be in low supply, according to Vidal. He explained this was partly due to the diversion of shipments to other markets, and also due to Chile’s process of varietal reconversion, which has been focused more on late red varieties.

Rodriguez that this is being reflected in U.S. market pricing.

“The prices are quite a lot higher than expectations. It’s not like it was once before when we would sell at US$40 or US$30 a box in January, but they are around US$26-30 for red grapes and a for green a little bit higher,” he said.

However, due to the higher production of late varieties in Chile, Rodriguez predicted there would be challenges in the coming months. “I think that at the end of March and in April it is going to be a lot more complicated due to the late fruit,” he said. “[There will be] high stocks.”