South African grape deal gets off to very late start
South African grape deal gets off to very late start
GLOUCESTER CITY, NJ " Belatedly, the 2005 South African grape deal was scheduled to begin in the United States on Feb. 24.
Meeting with The Produce News Feb. 23 in a new location for Fisher Capespan in a historic old port white stucco office building, here, company President Marc Solomon said that a variety of factors postponed the South African grape exports to the United States.
Mr. Solomon said that the South African grape crop was down in volume by about 20 percent this year. The short supply, combined with a more desirable exchange rate in Europe, prompted South African shippers to route their white seedless grapes to Europe and the United Kingdom instead of the United States. On Feb. 23, one U.S. dollar was trading for 5.80 rand; a year earlier the dollar had been worth 7 rand.
The strong rand atop the short grape supply has put "severe economic pressure on the growers, so they need to send the fruit where they can receive a relatively better return, which is the euro-based markets," he said.
While Europe and the United Kingdom are historically the primary receivers of South African fruit, Mr. Solomon stressed that choices in distributing fruit this year had been based strictly on economics. South Africa traditionally exports to Europe to meet pre-Christmas demand. With volumes down, South African grapes were transported by air in December in an effort to meet holiday demand. Even at that, volumes were insufficient for demand.
He added that South African growers "will weather the storm and be back next year."
Mr. Solomon said that Fisher Capespan is the largest receiver of South African grapes. He said his firm may not be the only receiver of the commodity, but he was sure that no South African grapes were received by the United States this year before his scheduled Feb. 24 shipment arrival.
South African grapes were also late to be shipped to Canada this season, but the first arrivals into Canada were a few weeks before the fruit for the United States was received. Fisher Capespan?s Montreal office markets fruit in Canada.
?It is a very high-quality season," Mr. Solomon said of South Africa?s 2004-05 shipping season. "The grapes are exceptionally good."
With the Sunred seedless deal beginning out of South Africa, "very small volumes? of fruit were initially shipped to the United States. Mr. Solomon expected his first such fruit of the season to arrive in Gloucester City from Port Elizabeth, NJ, on Feb. 24. Port Elizabeth receives containerloads of product, which are used for transporting relatively small fruit volumes instead of breakbulk refrigerated ships, which offer more cube and more freight space. Breakbulk ships are received at a handful of port facilities along the Delaware River.
The Sunred crop volume was also down about 20 percent this season, and those shipments were also predominantly driven by markets trading the euro. Sunred is South Africa?s preferred grape variety, according to Mr. Solomon. The Sunreds will be sold "to key customers who appreciate their quality and value." Black seeded South African grapes will arrive in North America in March and April this year.
Fisher Capespan is a global fruit trader, so the firm wasn?t strictly reliant on the South African grape deal this winter.
?We?ve had a very busy Chilean season, which is going very well." Mr. Solomon added that, until about Feb. 10, the Chilean grape volume was also lighter than anticipated, "but now we?re in a catch-up mode and volumes are strong." After high early prices, price levels had settled "to normal levels for this time of year."
Mr. Solomon said that the South African grape industry until this year had been in a "significant expansion mode," with a focus on growing more white seedless and Crimson grapes. "Now I expect less expansion until the economic conditions improve for the fruit industry. The exchange rates are what are wrong. If the dollar went up tomorrow, the industry would flourish again. The South African economy is in good shape."
He added, "This is not a crisis? for the South African fruit industry because "they have the other markets. Chile and New Zealand have similar problems over appreciating currency."
South African tree fruit growers export to Europe and the Middle East. The United States is not a practical market because USDA phytosanitary requirements of 22 days of cold treatment kill the fruit before it arrives in the United States.
Mr. Solomon said that the Middle East " particularly Saudi Arabia, Dubai and the United Arab Emirates " is a "huge? market for South African citrus and is a developing market for South African deciduous fruit. Mr. Solomon said that his company will begin receiving South Africa clementines this June. "The crop looks like it's excellent quality, with similar volumes to last year," he said. Early clementines will run through July, with later South African clementine varieties being on the market in North America in August and September. South African Navels will begin in July and run into October, with Midknights then arriving until the California Navel volume begins.
From South Africa, the North American industry will be importing about 1.5 million boxes of Navels and 3.5 million boxes of clementines this summer. Fisher Capespan will import 30-40 percent of that volume. Fisher Capespan continues to expand its involvement in the Chilean fruit deal, and the firm will be importing a small volume of Chilean clementines this summer. Mark Greenberg, Fisher Capespan?s Montreal-based senior vice president of procurement, said that industry estimates for total imports of Chilean clementines in 2005 range widely. Some industry guesses are that as few as 600,000 boxes will come to the United States. Others expect that there will be 2 million boxes. "We will know for sure when the fruit is on the water," Mr. Greenberg added. The wild card is that this is the first season for shipping a product under the strict control of USDA phytosanitary administrators.
Mr. Greenberg said that there is a possibility that Chilean clementine shippers might take the easy transportation route and serve the U.S. West Coast, while South African clementines will be distributed on the U.S. East Coast after a transatlantic voyage.
Fisher Capespan has years of experience marketing Chilean and South African clementines in Canada. Mr. Greenberg said that the South African peak clementine sizes are 24- and 28-counts, while the Chilean fruit tends to peak at slightly smaller sizes: 28s and 32s.
Mr. Solomon suggested that the Chilean clementine growers have been pleasing the Canadian and European markets with preferred fruit sizes. It is conceivable that Chilean clementine growers could alter their production practices to offer larger sizes to the United States. Mr. Greenberg agreed during a conference call with Mr. Solomon that this could happen, adding, "When the Chileans decide they want to do a good job on something, they do it."
Fisher Capespan is also importing "excellent? grapes from Peru and Brazil. The company also imports Mexican Perlette and Flame grapes for the Memorial Day holiday. Mexican Sugraones, Red Globes and black seedless are also handled by the company before the California deal begins.
About Feb. 10, the company began its seasonal imports of Argentine Bartlett pears, which will run until the end of March. Then Argentine Packam pears will be received until May or June.
In March, Fisher Capespan is to receive Royal Gala apples from Chile, followed by Granny Smith and Braeburn apples. "We?re looking forward to a good apple season on the production side. But large supplies of domestic apples need to be cleared out. Imported apples face a large domestic crop and SmartFresh has extended the marketing window and quality? of the domestic storage deal. The life extension of apples by the chemical produced by Rohm & Haas changed the face of the apple business within a couple of years.
Mr. Greenberg said that the application of SmartFresh has the impact of keeping U.S. storage apples in better condition than before. The good news, Mr. Greenberg noted, is that apple consumption has been good in North America since October. Furthermore, despite the availability of good U.S. storage apples, "We expect the chains will take the opportunity to buy fresh-pack apples."
Mr. Greenberg said that Fisher Capespan will import New Zealand apples this year, but "it is increasingly difficult to convince New Zealand growers to ship to the United States. New Zealand growers have been hurt in North America because Chilean apples have improved and because of the weak U.S. dollar.
Meeting with The Produce News Feb. 23 in a new location for Fisher Capespan in a historic old port white stucco office building, here, company President Marc Solomon said that a variety of factors postponed the South African grape exports to the United States.
Mr. Solomon said that the South African grape crop was down in volume by about 20 percent this year. The short supply, combined with a more desirable exchange rate in Europe, prompted South African shippers to route their white seedless grapes to Europe and the United Kingdom instead of the United States. On Feb. 23, one U.S. dollar was trading for 5.80 rand; a year earlier the dollar had been worth 7 rand.
The strong rand atop the short grape supply has put "severe economic pressure on the growers, so they need to send the fruit where they can receive a relatively better return, which is the euro-based markets," he said.
While Europe and the United Kingdom are historically the primary receivers of South African fruit, Mr. Solomon stressed that choices in distributing fruit this year had been based strictly on economics. South Africa traditionally exports to Europe to meet pre-Christmas demand. With volumes down, South African grapes were transported by air in December in an effort to meet holiday demand. Even at that, volumes were insufficient for demand.
He added that South African growers "will weather the storm and be back next year."
Mr. Solomon said that Fisher Capespan is the largest receiver of South African grapes. He said his firm may not be the only receiver of the commodity, but he was sure that no South African grapes were received by the United States this year before his scheduled Feb. 24 shipment arrival.
South African grapes were also late to be shipped to Canada this season, but the first arrivals into Canada were a few weeks before the fruit for the United States was received. Fisher Capespan?s Montreal office markets fruit in Canada.
?It is a very high-quality season," Mr. Solomon said of South Africa?s 2004-05 shipping season. "The grapes are exceptionally good."
With the Sunred seedless deal beginning out of South Africa, "very small volumes? of fruit were initially shipped to the United States. Mr. Solomon expected his first such fruit of the season to arrive in Gloucester City from Port Elizabeth, NJ, on Feb. 24. Port Elizabeth receives containerloads of product, which are used for transporting relatively small fruit volumes instead of breakbulk refrigerated ships, which offer more cube and more freight space. Breakbulk ships are received at a handful of port facilities along the Delaware River.
The Sunred crop volume was also down about 20 percent this season, and those shipments were also predominantly driven by markets trading the euro. Sunred is South Africa?s preferred grape variety, according to Mr. Solomon. The Sunreds will be sold "to key customers who appreciate their quality and value." Black seeded South African grapes will arrive in North America in March and April this year.
Fisher Capespan is a global fruit trader, so the firm wasn?t strictly reliant on the South African grape deal this winter.
?We?ve had a very busy Chilean season, which is going very well." Mr. Solomon added that, until about Feb. 10, the Chilean grape volume was also lighter than anticipated, "but now we?re in a catch-up mode and volumes are strong." After high early prices, price levels had settled "to normal levels for this time of year."
Mr. Solomon said that the South African grape industry until this year had been in a "significant expansion mode," with a focus on growing more white seedless and Crimson grapes. "Now I expect less expansion until the economic conditions improve for the fruit industry. The exchange rates are what are wrong. If the dollar went up tomorrow, the industry would flourish again. The South African economy is in good shape."
He added, "This is not a crisis? for the South African fruit industry because "they have the other markets. Chile and New Zealand have similar problems over appreciating currency."
South African tree fruit growers export to Europe and the Middle East. The United States is not a practical market because USDA phytosanitary requirements of 22 days of cold treatment kill the fruit before it arrives in the United States.
Mr. Solomon said that the Middle East " particularly Saudi Arabia, Dubai and the United Arab Emirates " is a "huge? market for South African citrus and is a developing market for South African deciduous fruit. Mr. Solomon said that his company will begin receiving South Africa clementines this June. "The crop looks like it's excellent quality, with similar volumes to last year," he said. Early clementines will run through July, with later South African clementine varieties being on the market in North America in August and September. South African Navels will begin in July and run into October, with Midknights then arriving until the California Navel volume begins.
From South Africa, the North American industry will be importing about 1.5 million boxes of Navels and 3.5 million boxes of clementines this summer. Fisher Capespan will import 30-40 percent of that volume. Fisher Capespan continues to expand its involvement in the Chilean fruit deal, and the firm will be importing a small volume of Chilean clementines this summer. Mark Greenberg, Fisher Capespan?s Montreal-based senior vice president of procurement, said that industry estimates for total imports of Chilean clementines in 2005 range widely. Some industry guesses are that as few as 600,000 boxes will come to the United States. Others expect that there will be 2 million boxes. "We will know for sure when the fruit is on the water," Mr. Greenberg added. The wild card is that this is the first season for shipping a product under the strict control of USDA phytosanitary administrators.
Mr. Greenberg said that there is a possibility that Chilean clementine shippers might take the easy transportation route and serve the U.S. West Coast, while South African clementines will be distributed on the U.S. East Coast after a transatlantic voyage.
Fisher Capespan has years of experience marketing Chilean and South African clementines in Canada. Mr. Greenberg said that the South African peak clementine sizes are 24- and 28-counts, while the Chilean fruit tends to peak at slightly smaller sizes: 28s and 32s.
Mr. Solomon suggested that the Chilean clementine growers have been pleasing the Canadian and European markets with preferred fruit sizes. It is conceivable that Chilean clementine growers could alter their production practices to offer larger sizes to the United States. Mr. Greenberg agreed during a conference call with Mr. Solomon that this could happen, adding, "When the Chileans decide they want to do a good job on something, they do it."
Fisher Capespan is also importing "excellent? grapes from Peru and Brazil. The company also imports Mexican Perlette and Flame grapes for the Memorial Day holiday. Mexican Sugraones, Red Globes and black seedless are also handled by the company before the California deal begins.
About Feb. 10, the company began its seasonal imports of Argentine Bartlett pears, which will run until the end of March. Then Argentine Packam pears will be received until May or June.
In March, Fisher Capespan is to receive Royal Gala apples from Chile, followed by Granny Smith and Braeburn apples. "We?re looking forward to a good apple season on the production side. But large supplies of domestic apples need to be cleared out. Imported apples face a large domestic crop and SmartFresh has extended the marketing window and quality? of the domestic storage deal. The life extension of apples by the chemical produced by Rohm & Haas changed the face of the apple business within a couple of years.
Mr. Greenberg said that the application of SmartFresh has the impact of keeping U.S. storage apples in better condition than before. The good news, Mr. Greenberg noted, is that apple consumption has been good in North America since October. Furthermore, despite the availability of good U.S. storage apples, "We expect the chains will take the opportunity to buy fresh-pack apples."
Mr. Greenberg said that Fisher Capespan will import New Zealand apples this year, but "it is increasingly difficult to convince New Zealand growers to ship to the United States. New Zealand growers have been hurt in North America because Chilean apples have improved and because of the weak U.S. dollar.
