This week, we look at the outlook of the global grape market. Grapes remain a popular fruit among families in many countries, with over 62% of families purchasing them in Italy and Australia.
Despite their popularity, however, this market has been facing issues in logistics, as many others have too, as well as suffering the effects of the COVID-19 pandemic.
These issues have affected both prices and demand, with prices increasing in the Netherlands, Germany, and France, but dropping in Spain. In Australia the pandemic caused grape exports to decline by 26 percent in value.
Global grape market outlook
Netherlands: Tight supply of grapes, high prices, and many quality issues
The enormous delays in shipments have led to tight supplies of grapes in recent weeks. A Dutch importer expects the availability to improve in the coming weeks, as the supply from both South Africa and India will increase.
It is expected that this will also put some pressure on prices. The prices have been very good up to now. For a 4.5 kilograms box of white grapes, the market currently pays between 13.50 and 15 euros.
A side note of the current market situation is that due to the rain in South Africa, a lot of grapes with quality issues are coming in across the board.
Germany: Still high demand for grapes from South Africa
South African products have dominated the market, with new additions including Sugraone and Black Gem. Peruvian Crimson Seedless and Red Globe were also on the market but lost relevance overall. Imports from Namibia played a rather minor role.
The interest was not particularly strong and was satisfied without any problems. Batches with weakening conditions were affected by reductions in Hamburg. In Cologne, Peruvian batches became cheaper.
While a few weeks ago there were supply bottlenecks for grapes from South Africa, an importer from North Rhine-Westphalia can now look back on more positive development.
The demand for grapes from South Africa is currently very high, due to the fact that there are no other grapes available for purchase at the moment, at least in his area. The quantities are also satisfactory. He had to increase his prices by 7-10%.
France: Up to 30% higher prices for grapes in France
The Peru season is about to end and the French market is now in the middle of South Africa season. Due to logistical issues, grapes are arriving in France with between 10 and 18 days of delay, which could be a problem for the quality of the product.
The prices of packaging and other costs put the price of grapes up to 30% higher than usual. The consumption is impacted by this. Except for new varieties, for which prices are very high and demand is excellent.
Spain: Low prices for grapes on Spanish market despite high demand
The demand for table grapes remains high in Spain, especially white seedless grapes, as well as in France and other Mediterranean countries.
However, the availability of white seedless grapes has been limited in recent weeks due to the delays of South African exports as well as the influence of heavy rains in two of the major growing areas of the country.
India has contributed to completing the supply in those European markets that accept its grapes. Meanwhile, the Peruvian season is ending and the Chilean grapes will arrive soon, also in smaller quantities, as the US market is paying well for them.
As for black seedless varieties, they are showing a very unequal quality upon arrival, both the last grapes from Peru and the first from South Africa, with rotten batches and small sizes.
There was also a shortage of red seedless grapes at the end of December and beginning of January, due to the delays from South Africa, which has been already solved and there is now full availability.
“The global logistic problems with shipping companies have gotten worse in the last two weeks, making it more complicated to supply enough grapes, which are already scarce in the case of white seedless grapes,” says a Spanish importer.
“Despite the limited supply, prices are low. The production and packing costs are higher and prices at origin remain high, but supermarkets are not willing to pay much more at the moment.”
Italy: First signs of normalization in the grapes market category
According to statistics, table grapes were purchased in the last year ending in December 2021 by approximately 16.5 million Italian families, corresponding to 63.2% of all families.
As with other types of fruit and vegetables, in the last two years, there has been an increase in the levels of penetration, linked to the pandemic scenario and the general increase in purchases for domestic consumption. Two years ago (pre-Covid) grape penetration levels were 60.1%
However, we are witnessing the first signs of normalization of the category, with a frequency of purchase (absolutely high for grapes) equal to 6.7 average acts for families over the year, down by 4.6% compared to the 2020 but with a level that remains slightly higher than 2019 (+ 3.4%), the last pre-Covid year.
The organic trend, on the other hand, is rather stable: there are just over 2 million families who have bought organic, with no changes in the last 3 years.
South Africa: Good estimates for South African grape crops
The Berg River and Hex River growing regions will enter their peak next week and prospects for the grape crop in these two areas, also South Africa’s largest, are very favourable, according to the South African Table Grape Industry.
Fruit is flowing well and cold store capacity is looking good, but there is a lag between intakes and exports because of shipping and port delays but the fruit is flowing well at the moment.
Heavy rain in the Northern regions (Limpopo) and a heatwave in the Olifants River growing region have necessitated a downwards adjustment of the crop estimate for these two regions, while the crop estimate for the Orange River region has been increased, despite the rain the area received.
The lower threshold of the initial estimate has been increased to 72,8 million 4.5kg cartons while the upper threshold remains the same at 77,7 million 4.5kg cartons.
Thanks to the increased number of reefer vessels (conventional vessels) loading grapes in Cape Town, the flow of grapes is good. “Delays in the Port of Cape Town is still a challenge and of major concern,” the grape industry recently noted.
North America: Supplies of Chilean grapes are steady and getting stronger by the day
According to the Chilean Fresh Fruit Association, Chile has exported 74,820 tons globally, a decrease of 15.8 percent from the 88,836 tons exported through the same week last season.
Of the total volume exported season to date, 59,555 tons (79.6 percent) or 7, 262, 786 boxes, have been shipped to North America.
The anticipated higher volume of exports is driven primarily by the increase in new varieties by more than 73.5 percent in relation to the 2019-2020 season and by more than 49.1 percent when compared to the shipments of the 2020-21 season.
As of Week 5, table grape harvests continued as per usual focusing on varieties such as Timco, Allison, and Autumn Royal from the Atacama to Coquimbo regions, with nearly 20 percent of the volume still pending to be harvested in this area.
In the Valparaíso and O’Higgins regions, the harvest is already in full swing, with the main harvested varieties being Sugraone, Sable Seedless/Sugrasixteen and Queen Rose, yielding good volumes of optimal quality.
Over the next few weeks, volumes will continue to ramp up significantly. The association anticipates a peak in white seedless grape shipments around Week 8 and red and black seedless around Week 12.
North America is still by far the biggest target market for Chilean grapes. During the 2020-21 season, Chile exported 51.4 percent of grapes to North America with 25.9 percent to East Asia, and 13 percent to Europe.
To help feed that demand, Chile continues its research and development of new grape varieties.
“During the 2021-22 season, shipments of new varieties are expected to reach 35 million boxes, followed by traditional varieties with 32 million boxes, and Red Globe with a little more than 17 million boxes,” says a supplier.
Ten years ago, Chile exported more than 27 million boxes of Red Globe grapes.
Meanwhile, the USDA’s Animal and Plant Health Inspection Service (APHIS) has recently published a pest risk assessment of a long-awaited systems approach for Chilean table grape imports, a decision that would greatly improve Chile’s market access.
As it waits on public comments on this proposal (with a March 29 deadline), approval would mean that Chilean table grape exporters would no longer be required to use methyl bromide fumigation on fruit sent to the U.S.
And in Mexico, there is also a shift towards newer varieties of grapes.
The Northern Mexican grape season generally begins in early May and goes until the first or second week in July, though the varietal switch may make for tricky timing between the switch from the Chilean grape season to the Mexican one.
“This year if everything goes well in Chile there still could be a gap because of the newer late-producing varieties,” says one grower-shipper. He notes that Chile could go with supplies until May 15-20 while Mexico won’t see significant volumes at least until May 20th.
May-June of course is also when early California grapes will start production as well.
All of this comes following strong demand over the winter for grapes. “But in the winter, the majority of grapes go from Chile or Peru to the East Coast ports. So January was difficult, mostly because of logistics–not a lack of grapes,” the grower-shipper says.
“And there was very little fruit coming to the West Coast because the California ports had difficulties too.”
As for prices, the winter season has seen higher pricing on grapes. “The whole month of January, prices were mid-$30s. Right now they’re still in the low to mid $30s. We’ll see how long that keeps that high,” he says.
Australia: Australian grape exports negatively impacted by COVID-19 pandemic
Australian table grapes were the highest valued export fruit crop in the financial year ending June 2021, worth $460.7million, according to the latest statistics.
For the year ending June 2021, a total of 198,389 tonnes of table grapes were produced in Australia (down 8% from the previous year) and valued at $632million (down 16 percent).
In a year impacted by the COVID-19 pandemic, exports took a big hit, with volumes down by 21 percent to 120,725 tonnes, and value down by 26 percent to $460.7 million.
China (35%) was the highest individual market destination, even though it took a massive drop from 62,930 tonnes to 43,013 tonnes from the previous year.
It came as the statistics showed that 62 percent of Australian households purchased table grapes.
Menindee and Thompson, are the two most common green varieties in Australia, accounting for 38 percent of production, followed by Crimson, Flame, and Globe, the main red varieties in Australia, making up 30 percent of a fresh production.
China: Imported grape prices drop, Logistics remains the main challenge
On the Chinese market, imported grapes are one of the most important imported fruit items. Grapes are mainly from Peru, Chile, and Australia. At this stage, the market supply is dominated by Peruvian grapes.
Compared with before the Spring Festival, the overall price and demand for imported grapes after the festival have dropped significantly.
At the same time, as with many other fruit items, logistics remains a major challenge. Currently, most grapes are from Peru.
Peruvian grapes are generally available from December to the end of February of the following year, after which Chilean grapes take over the market from March until June.
Logistics are still a major challenge for merchants. It is understood that due to the epidemic, there are a lot of backlogs of containers in the customs this year, and the release speed is slow.
A container will be delayed for about 14 days, while in the past it was generally only delayed for 2-3 days