Market Update For Table Grapes
Week of May 10 – May 16
The table grape industry will be anxiously waiting for volumes of Mexican fruit to start entering the US, as it becomes apparent that quality South American supplies have run out of gas. Importers have been repacking questionable lots for weeks now and will continue to repack distressed fruit, hoping to save what they can from remaining inventories. Unfortunately, even this repacked fruit will have a short shelf life, and consumers will likely not support the higher retails. With disappointing results from Jalisco, Mexico and supplies from Hermosillo not expected to improve for another two weeks, retailers will struggle to keep fruit on the shelves heading towards Memorial Day. Volumes from Coachella will be significantly reduced this year as major acreage has been pulled due to increased volumes of proprietary varieties now planted in Mexico. All of this adds up to a very tough few weeks. Extremely high spot market FOB’s will be followed by a 20 million box Mexican crop, which will only have 8 weeks before Arvin, California growers kickoff their season.
Some importers still have significant volumes of imported red seedless available on the east coast. The vast majority of those lots are severely compromised and past the point where repack is an option. Retailers will find it challenging to source quality red grapes for the next two weeks as Mexican supplies are not expected to impact the market until after May 20th. The sheer numbers of Chilean red grapes that will be dumped or donated this year is staggering. Many Chilean growers will suffer unrecoverable financial losses, and we are likely to see many of those growers not survive the season. Spot market pricing for whatever quality fruit remains in the market has spiked over the past week, and we can expect importers to push the market even higher. Good quality red seedless are currently trading from $24-$28 and we expect FOB’s for Mexican Flames to open over $30 per box. The combination of high spot market pricing, followed by a flush of fruit in June, will keep buyers on their toes. FOB’s will drop rapidly once production finally ramps up in Hermosillo.
With Brazilian shipments all but done for the season, and almost no quality Chilean Thompsons, the industry is now gapping on green seedless. Importers are doing their best to stretch-out supplies in order to cover program business, but many retailers are having to go without green seedless on the shelves. Growers from Jalisco, Mexico had hoped to fill the April market with new plantings of Sweet Globes. However, they’ve been extremely disappointed with quality and production, leaving questions about the region’s future. With such short supplies, terminal markets are fetching historically high prices for only fair quality fruit. Any lots of good quality green seedless still left in the market are fetching between $42-$46 with size and condition being the determining factors. We will start to see some Perlettes and Early Sweets crossing into Nogales this week, but supplies will not come close to impacting the market or filling the empty pipeline. Expect spot market FOB’s of Mexican green seedless to range from $40.95-$44.95 this week, with pricing not expected to drop until the 20th of May. Just like red seedless, buyers will need to keep inventories manageable to not get overloaded with expensive fruit once markets adjust significantly lower in June.
Late-season Chilean Autumn Royal volumes are significantly lower in comparison to last season, with very few lots left available. Although there are still some Peruvian black seedless left, overall quality is subject. Spot market pricing for good quality fruit will range from $28-$32 with only limited supplies. With volumes of Mexican Summer Royal not expected until the end of the month, look for FOB’s to remain elevated. After years of poor performance, many Mexican growers have reduced black seedless acreage in favor of red and green proprietary varieties.