The supply of grapes on many markets is tight at the moment, for a number of reasons. A number of large producing countries have started their season late this year, particularly Peru and South Africa. The political unrest in Peru has been the cause of this for some countries, including the US, as it brought some growing operations to a standstill. The growing season in South Africa has been strongly affected by heavy rainfall, hail and heat, leading to a reversal in the markets growing trend over the last few years. The season in India was also delayed by up to 20 days, but prospects for the rest of the season here are good. On other markets, such as Spain and Italy, supply is not the issue so much as demand. Consumers here, faced with rising prices and economic downturn, are opting out of buying grapes. As the season has only just started for many countries, however, how the rest of the year will go remains to be seen.
Netherlands: Good sizes but lower weights for imported South African grapes
An unusual phenomenon, which occurs once every few years, is currently happening again with South African grapes. "The grapes have the size but not the weight. Per individual grape, they just weigh one or two grams less. If you walk into the vineyards, the production seems good, but when packing, the growers are just 20-25% short," observes a Dutch importer.
The start of the overseas grape season was excellent this year. "Especially until Christmas, supply was very sparse. Brazil sent 35% fewer grapes, Peru certainly sent fewer grapes at the start and the European season had ended early. As a result, the market was very good until Christmas. After Christmas, however, sales calmed down a lot," he continued. "South Africa shipped good volumes for several weeks, but in the last two or three weeks, supply has been a lot less."
For the next few weeks too, it could well be very strange shipping weeks. This is because the later production areas are considerably earlier. Therefore, with the lesser production from the early areas, there is a kind of concertina effect, which could make the statistics look very different this season. "For red and blue grapes, normal volumes are expected to come to Europe in the coming weeks despite the lower weight, and there could theoretically be a shortage of white grapes."
"Fortunately, we are not seeing the disruptions in shipments, which we faced around this time last year, this year. Fortunately, the shipping companies have focused heavily on this, so there is much more stability on the arrival side. That was much needed too, because last year the grapes lost two weeks of shelf life before they arrived here because of the delays," the importer reflects. This year, the quality of the grapes is generally good. The production areas in Limpopo and Mpumalanga did suffer a bit from the weather, so the quality is variable, but the grapes from Namibe, Orange River and the Western Cape are just excellent.
"Prices have now corrected to normal but still good levels. Incidentally, these prices are also much needed, given all the costs in the chain. Besides all the cost price increases both in the production areas and here, sea freight costs from South Africa and Peru are still much higher, and on top of that, the weak dollar is not cooperating."
India had already cautiously started exporting, but stopped exports again due to a strong local market and the low brix of the grapes. These exports will pick up in the coming weeks, but India has a late season and is at least two weeks later than normal. The advantage with Indian grapes is that sea freight prices have normalised again. They are half the price level of last year.
“Price remains an important factor in this economic situation. The big question is whether consumers are willing to pay the higher price, but that applies to all products, be it local iceberg lettuce or overseas fruit. Until the end of last year, the appetite for action for grapes on the supply side was not that high because the volumes were not there. There are quite a few promotions lined up again for January, though. There is a lot of promotional pressure across the market, so they are definitely going to need those promotions to sell all the volumes," the Dutch importer concludes.
Belgium: Grape imports unaffected by unrest in main country of origin Peru
The vast majority of the supply of grapes in Belgium is coming from Peru at the moment. Despite the unrest in the country, supply is not really compromised at the moment, an importer confirms. "At the very start of the unrest we did notice the effects for a while, but between Christmas and New Year we were actually able to do very well. We are not talking about particularly large quantities, but it is enough fruit to meet demand."
In general, sales have continued pretty well in the last few weeks. "The good varieties are selling for nice prices. There is also some more coming from South Africa, but that quality, in my opinion, is still not comparable to the grapes from Peru. However, as mentioned, supply is not particularly high. Demand, even with relatively high prices, is nevertheless good. It is still remarkable, given the economic situation of many consumers at the moment."
"There seems to be a bit less coming, but it remains to be seen what the market does. If demand stays at this level, there may be a shortage. At the same time, the market could fall silent with more than enough supply in the coming weeks," the importer continued. "How the season will eventually go remains to be seen, because it is not like other years. Grapes remain a separate story in that respect anyway. What sells extremely well this week may not sell at all next week. It's a very volatile market with ups and downs."
Germany: Smaller volumes of South African grapes expected
Lower export volumes, especially of the light-coloured varieties, can be expected in the coming weeks due to rainfall in all major growing regions of South Africa, a German importer says. This comes at the same time as late arrivals from Peru. After the grape season from the southern hemisphere started somewhat later than last year with arrivals from Brazil and Peru from the beginning of November, due to the good availability of late varieties from European season, the first marketing weeks until the end of the year were characterized by a significant undersupply, he says. Furthermore, Peru was affected by several issues like strikes in the transport sector and the subsequent delays, to falling profitability due to the significant increase in production and logistics costs.
The season initially started with very small volumes, as there was heavy rainfall at the start of harvest on the Limpopo in South Africa, which led to crop losses and also to a delay in the first exports. After significant rainfall was also measured later in the two other important growing regions on the Orange River and in the Western Cape, they now expect lower import volumes from the end of January, especially for white seedless grapes. There are also losses in red seedless grapes in the more susceptible varieties, such as Starlight, and it remains to be seen whether there will be an undersupply. Prices are significantly higher than last year, he said, due in particular to increased costs along the supply chain. In South America, this would be compounded by the extremely unfavourable euro/dollar exchange rate. Selling prices are higher than last year.
The season for light-coloured grapes from South Africa generally begins with standard products from mid-December to week 8, followed by premium varieties, which can be found in the market until about week 15. Red grapes from South Africa can be offered until the end of May, before Egyptian and Moroccan grapes appear on the European market. German food retailers have had a growing interest in red grapes for years. However, grape varieties that contain seeds, such as Red Globe, are increasingly losing importance on the German market.
Italy: Italian grape sector faces grim challenges
This year, the Italian table grape sector has suffered for a number of reasons related to the challenging period and the climate. Unfortunately, the sector came up against a stagnation in consumption, which was affected by the war in Ukraine, inflation, high energy prices and the delay in adopting the cultivation innovations required by the market. All this led to a contraction in demand, resulting in lower producer prices.
The Christmas period saw the lowest availability of Italian grapes on the market. A producer from the province of Bari (Apulia) said: "The product did not keep well, due to the high and prolonged humidity, which affected the quality of the grapes. In addition, the high temperatures caused the bunches to perish faster. The anomalous climatic trend contributed to the spread of fungal diseases in the vineyards, making the bunches unsuitable for marketing, so much so that many retailers preferred to block Italian supplies and turn to foreign countries."
In the Italian wholesale markets grapes from South Africa, Spain and Peru are available at prevailing prices ranging from €2.40 to €4.00, depending on variety and market.
Spain: Spanish table grape season over, imported grapes sales remain stuck
The Spanish table grape season ended with the last traditional white seeded variety Aledo for the New Year’s Eve celebrations. Growers report an unbalanced market for grapes this year, as prices have not been in line with costs due to a stagnant demand in 2022. Seedless table grapes also ended and now only imported varieties fill the Spanish market. Sales have been stuck for imported varieties - mainly from Peru -, since November, according to a Spanish grower and trader. As import prices of Peruvian grapes are high due to a lower availability and the increase in logistic costs, it has become one of the most expensive fresh goods on the shelves, which has slowed down the consumption significantly.
South Africa: Growing trend for grapes reversed this year due to poor weather conditions
The harvests in the Olifants River Valley, Berg River Valley and Hex River Valley regions are currently in full swing to end off a season that has been a difficult one for the earlier regions which were significantly affected by rain and hail as well as heat during springtime. The season has been early overall.
Even the late areas which are normally dry this time of year were affected by rain, which reduced the amount of grapes exported. Due to this, the grape estimate this season is 66 million 4.5kg, reversing the growing trend of the past few years.
Growers have been sending grapes of which the quality and shelf life they are unsure of to raisin-drying facilities, or the local market. Some completely missed the runup to Chinese New Year, usually a lucrative option if size and quality allow, due to rain and hail on grapes.
Apart from the weather, electricity cuts are acute and a gigantic cost to growers who have to run packstores and cold rooms and irrigation pumps with diesel generators. The cost of generating alternative power is seriously eating into margins.
As a result of the electricity cuts, the production of plastic punnets has been affected and some report shortages.
Meanwhile, the European and UK grape markets are reportedly not full. The Orange River Valley ran short of volumes for their supermarket programmes, so Namibia had the market much to themselves and their exports (9 million 4.5kg cartons) will be their highest yet.
India: Late start to Indian season, good prospects for export to China
The Indian grape season has only just started. Compared to the last season, there has been a 15 to 20 day delay in the cultivation process, like pruning and spraying. Around mid-December, there was a lot of unexpected rain, which had an effect on the early grape varieties. There should be more rain later on during harvesting. Demand from the Chinese market seems to be good this year. Indian exporters couldn't ship to this market last year, as the official approval was delayed. At the moment, the export volumes are about 20% less than they were last year. There have been competitive rates for grapes from other countries, such as Namibia and South Africa. Overall, there are good crop volumes this season, export volumes will increase over the next few weeks.
China: Growing domestic production, focus on varietal development
China's fresh table grape production is likely to increase with 13% year-on-year to 12.6 million tons in the 2022-23 season, according to data from the USDA.
XinJiang is China's largest grape producing region in 2021, followed by Hebei, Shandong, Shaanxi and Yunnan. Yunnan is a growing planting area for fresh grapes, where new varieties are increasingly tested and taken into production. Chinese Shine Muscat grapes, similar to Japanese Muscat grapes, are an example of a variety which popularity and production are growing steadily. Exports are expected to increase to markets like Vietnam, Singapore and Thailand, now Covid restrictions have been lifted.
China imports around 10,000 containers of fresh grapes annually. Peru is a large grape supplier to China, as are South Africa, the United States and Australia. Currently available on the import market are Peruvian white grapes. According to a trader in Guangzhou: "Current market prices of Peruvian green are higher than in previous years. However, taste and quality is less good, which is affecting sales. Peruvian red grapes are starting to arrive in larger quantities and their price is going down. The taste of the red grapes is good, and sales are positive. Last week a first container with South African black grapes has arrived".
North America: Grapes supplies affected by unrest in Peru
Supplies of grapes in North America will likely continue being tight for the rest of the month.
Starting with Peru, supplies there were pushed back by a few weeks following cooler weather throughout the growing cycle in the Southern Ica region, as well as the recent political and social unrest in Peru.
“Social protests were blocking highways that literally shut down the industry. It wasn’t just grapes but also avocados, blueberries, asparagus, etc. It put the entire Peruvian agricultural industry at a standstill for seven days,” says one shipper. That means a week’s worth of packing and shipping grapes was missed and it’s now being felt with lower supplies in the market as of late last week and the first part of this week. “You miss that one week and that’s almost a million boxes of fruit out of the market,” he says.
Protests also resumed in the latter half of last week and road shutdowns meant labourers couldn’t make it to the farms. “So we again lost four full days of production and that’s fruit that would arrive in the last week of January,” he says.
Over in Chile, production has also been delayed in the north. “We typically receive our first Chilean bulk vessel with grapes the last week of December. I’m getting my first Chilean table grape arrivals at the end of this week so that’s two and a half weeks behind,” he says.
Grape production in the northern part of Chile has shrunk over the past 10 years. He estimates the region is producing only 50 percent of what it was a decade ago. “There is just less volume in the north because over the years markets have been very depressed for that early northern fruit. All of these things came together over the past five years,” he says.
So when will volume arrivals begin? Both regions will likely see greater volumes arrive in the middle of February. “So we had better be out in front of this for the last two weeks of February and into March. That means being out there and promoting fruit,” he says.
These two countries are the dominant grape shippers currently. “Normally we’d have South Africa fighting for market share. However they experienced horrible torrential rains about a month ago and it impacted their crop,” he says. Same for Brazil, which tends to ship significant volumes starting at the end of December and into early January. “Their growing region also had horrible rain events and some growers lost 50-60 percent of their production,” he says.
As for demand, it’s strong but keeping in mind shorter supplies are helping that demand stay strong.
Markets are indeed strong for especially proprietary varieties but also some conventional varieties. “That will continue all the way through the end of the month. Then we’ll have to have aggressive pricing from the middle of February into March,” he says, noting spot market prices are currently between $32-$36.
Chile: Chile prepares to export table grapes to the United States under Systems Approach
The latest estimates from the Chilean industry place table grape exports at 67,741,801 boxes (8.2 kilos), which would total 555,483 tons. This volume forecast by the ASOEX Table Grape Committee represents a drop of 8.9% compared to the previous season (2021-2022) as a result of the varietal replacement that is taking place in the country.
The Table Grape Committee also confirmed that the new varieties will reach 36,724,746 boxes (representing 54.2% of the total), while the traditional ones, including Red Globe, will reach 31,017,055 boxes. "The new white varieties will exceed 13 million boxes, the black ones 4 million and the red ones 18 million boxes," the entity detailed.
North America will continue to be the main source of Chilean fresh grapes with an estimate of 37,218,578 boxes, followed by Asia with 13,923,978 boxes. While Europe is in third position with 9,059,231 boxes.
The United States in particular had a 49% share in the 2021/22 season, and currently the industry is preparing for the implementation of Phytosanitary Inspection Sites for Table Grapes for export to its main market under Systems Approach, which will be apply from next season.
"Currently, Chilean grapes that are sent to the US must be fumigated in accordance with the import protocol between both countries, which affects the quality and competitiveness of the fruit," reported ASOEX at the end of December. “However, USDA-APHIS recently published in the Federal Register a proposed rule that would allow importing Chilean table grapes under the Systems Approach to the US market, replacing fumigation. A measure that could be implemented by producers/exporters from Atacama, Coquimbo and part of Valparaíso, due to phytosanitary requirements.”
"In this regard, it should be noted that the US agency reported the extension of the comment period on said rule to January 17, 2023, the date on which the industry expects to be fully prepared to export under this mechanism," the industry body remarked.
"It is within the framework of the Systems Approach that ASOEX is working with the regional governments of Coquimbo and Atacama, and the exporting companies of said regions in order to implement two phytosanitary inspection sites, one in each region, with the purpose that in they can check the absence of pests in the fruit, before they are exported to the US market."
"Finally, it is important to mention that, for at least 3 seasons now, ASOEX, together with the Foundation for Fruit Development (FDF) and union entities such as Apeco have been working and developing various projects to prepare and train producers and exporters to correctly carry out the Systems Approach.”
Australia: Australian grape industry focuses on traceability
The Australian Table Grape Association recently released the Table Grapes Traceability Pilot Final Report. The aim of the pilot was to achieve end-to-end traceability from farm, through the supply chain, to consumers. The report stated embracing traceability is a priority for growers due to increasing regulation by importing countries and currently, product and cool chain traceability often end as fruit enters export countries, preventing producers from monitoring fruit quality and leveraging brand value. Therefore, a strong traceability program, from growers through to the supply chain, ensures safety and trustworthiness through to consumers overseas.
The ATGA says the comprehensive final report gives both visual and in-depth insight into the background, technology, industry needs and outcomes. “What we've achieved over the course of the table grapes traceability pilot is astounding," reported the ATGA. "The pilot has demonstrated the value of information and data – the level of information at the fingertips of producers, exporters, supply chain and consumer is amazing. Each of the pilot partners and other contributors to the pilot has shown such unwavering commitment to enhancing the table grape industry's traceability practices, and we're grateful for that."
Australian table grape exports have grown by a 300% over the last 10 years, from $80M to $623M in 2019/20, predominantly to Asia.
Next week: Global Market Overview Lemons!