(Aug. 26, 6:07 p.m.) The dollar’s depreciation, the Brazilian real’s appreciation and high shipping costs mean Brazil’s mango exporters may cut back sharply on volumes to the U.S.
“It’s the $64,000 question if Brazil is going to even ship this year,” said John-Campbell Barmmer, director of marketing for Chestnut Hill Farms, Miami. “I think Brazil wants to be a good trade partner with the United States … (but) it’s a question of economics.”
Greg Golden, sales manager at Amazon Produce Network, Glassboro, N.J., said several factors are cause for concern affecting the whole industry.
“Prices are driving it up to a point of real concern where we just don’t want it to be pushed into that specialty fruit category,” he said. “That will slow down the movement.”
Golden said with a saturated domestic market in Brazil, growers will try to ship to Europe, where there is a dual appeal of a strong currency and no requirement for hot-water treatment. Meanwhile, the inhibitors to U.S. trade stack up.
“The biggest concern is the exchange rate is down about 15% from last year, meaning the growers get back less and the freight costs are up dramatically,” Golden said, explaining freight costs have risen $1,500-2,000 per container.
Sam Skogstad, manager of purchased fruit for Brooks Tropicals, Homestead, Fla., agreed much Brazilian product may be diverted to Europe.
“There’s going to be a big crop again out of Brazil, (but) I imagine they’ll try to send as much as they can to Europe with the strong euro and the weak dollar,” he said.
William Watson, executive director of the Winter Park, Fla.-based National Mango Board, said the board’s projections estimate the same volume for Brazilian imports as last year.
“However, several economic and environmental factors can affect these numbers during the season,” he said.
Importers also say the organized network of Brazilian growers will again limit volume to meet a profitable price point.
“Brazil is the only country where the mango growers cooperate with each other,” said Jim Burnette, mango category manager for J&C Enterprises, Miami. “They agree they’re only going to ship a certain number of containers per week and that’s why they get the good prices.”
Burnette said in the past the magic number has been 120 containers.
Golden said he thinks with costs higher than they’ve ever been the number of containers may be as low as 80-90.
Golden said in the past 120 containers resulted in a $6-6.50 price range per box, but even that won’t be enough for growers to recoup costs this year.