Market Update For Table Grapes
Week of May 25 – May 31
Even with diminished expectations due to COVID-19, overall consumer demand leading up to Memorial Day was somewhat lackluster. With hopeful expectations, most retailers front loaded last week but seemed to carry heavy inventories into the holiday weekend. With so many variables in the market, managing warehouse turns has been like hitting a moving target for procurement professionals. The table grape industry will have to completely transition to Mexico and Coachella this week as most South American Importers have cleaned up remaining lots of green, black and red seedless. There will be very few options for Chilean fruit this week. For the second year in a row, Mexican grape volumes have been significantly hampered as growers fight both color and sugar. With daily temperatures to exceed 105 degrees over the next 7-10 days, we can expect more delays at the border. Fairly aggressive program pricing has kicked-in for most Mexican grape marketers so the lack of volume crossing into Nogales will most likely keep spot market FOB’s considerably higher through the balance of the month. It certainly looks as if we will see a repeat of last year’s condensed volumes in June and July, as there is still an estimated 16 million more boxes left to harvest.
Mexican growers of Flame Seedless continue to fight color and sugar, and extreme heat this week will only compound the problem. This has allowed Chilean importers to extend their season and finally cleanup remaining lots of Crimsons and Allison. The industry will find it challenging to source high quality Chilean fruit this week but will have few options to fill the pipeline. As retailers make the full transition to Mexico, marketers will struggle to meet their weekly commitments for Flames. Expect an inflated spot market this week as volumes will fall significantly short of what is needed. FOB’s on any remaining Chilean red seedless good enough to meet retail spec will range from $20-$24 with the mostly market at $22.00 for XLG fruit. Most programed business for Mexican Flames after Memorial Day range from $18.95-$22.95, so it will be no surprise to see the spot market hold firm at $24.95 and higher through the balance of the week. There is a fairly large crop hanging and it looks as if we’ll see the majority of the Flames enter the US in June and early July. Arvin, CA growers look to be about 10 days behind earlier projections, which will certainly be welcomed by Mexican marketers.
The industry has worked through the last remaining lots of Chilean storage Thompsons, signaling the complete transition to Mexican green seedless. For the past few weeks, the industry has been in a demand exceeds supply situation, coupled with significant rejections due to low brix. Varieties like Sweet Globe, Early Sweet and Sugar Crisp have been limited and we’re finally starting to see better volumes of Perlettes crossing into Nogales daily. Growers continue to wait on proper sugar development and the heat expected this week will continue to hamper production. We are seeing better volumes crossing daily and spot market FOB’s have adjusted lower. Still, programed and pre-committed weekly ad pricing is considerably lower than the daily spot market as marketers were expecting promotable volumes to be entering the US by now. Pricing on premium Mexican green should range from $24.95–$26.95 on proprietary varieties and $20.95-$22.95 for Perlettes this week. The combination of lower programmed pricing and less than expected daily crossings should keep the spot market firm. This will likely lead to condensed volumes and a sharp drop in FOB’s in the month of June.
With only a few Chilean black seedless remaining in the market, retailers are making the full transition to Mexican Summer Royals. Movement is still only fair as most retailers are not looking to promote black seedless in weekly circulars. Pricing on Chilean Autumn Royal ranges from $18-$22 but overall quality will be suspect. Mexican Summer Royals are trading between $19.95-$22.95 with the mostly market at $20.95 FOB Nogales. As more volumes of Summer Royal cross the border, it is reasonable to think that FOB’s will drop below $18.95 by the first week of June.