California table grape exporters have optimistic outlook

07/02/2012 09:51:00 AM
Vicky Boyd

FRESNO, Calif. — Exports continue to be a boon for the California table grape industry, and the end to the Mexican trucking dispute, coupled with continued low exchange rates, should bode well for this season.

About 40% of the California table grape crop was exported during the 2011-12 season — the second-largest volume on record, said Susan Day, vice president of international marketing for the California Table Grape Commission.

“I can’t see any reason why that kind of volume won’t continue,” she said.

For the 2011-12 season, California’s grower-packer-shippers exported 39.3 million 19-box equivalents to more than 60 countries, according to commission data.

The five largest recipients were Canada, Mexico, China, Indonesia and the Philippines.

Coming midway through the 2011-12 season was the settlement of the U.S.-Mexico trucking dispute.

When Congress eliminated funding for a pilot program to allow Mexican truck drivers into the U.S. in 2009, Mexico retaliated in March of that year by placing tariffs on 89 products. Grapes carried the highest tariff — 45%.

As a result, California table grape shipments to Mexico dropped to 1.7 million boxes in 2009 from 5.8 million boxes in 2008, according to a news release from the table grape commission.

Before the dispute, Mexico had been the largest export market for California table grapes.

Mexico reduced the tariffs to 20% in August 2010, but shipments didn’t rebound to their former levels that season.

Eventually, the U.S. and Mexico worked out a deal in late 2010, and the remaining tariffs on all products, including table grapes, were dropped in 2011 midway through the San Joaquin Valley season.

“The Mexican tariff went to zero last August, so we shipped the majority of our season last year with a zero tariff,” Day said.

For Delano-based Columbine Vineyards, which does the bulk of its export business in North America, the settlement came as good news, said Chris Caratan, vice president.

“Mexico is a big market for us, and anything to smooth out the trade benefits not just us as a company but the entire industry,” he said.

In many countries, the U.S. dollar remains weak against the national currency, giving U.S. products a price advantage.

In Mexico, the exchange rate is starting to go the other way, which could make U.S. products a bit more expensive, said John Pandol, special projects manager for Pandol Bros. Inc., Delano.

What he’s noticed in Mexico about the past five years is an evolution toward modern supermarkets and away from the mom-and-pop produce stands.

That’s good news for table grapes, since the modern facilities have coolers and refrigerated trucks and can take much more volume, he said.

WTO ruling on COOL

At least one trade hurdle remains on the horizon — the possible fallout from country-of-origin-labeling requirements, Pandol said.

In response to complaints filed by Canada and Mexico, the World Trade Organization ruled in November 2011 that the U.S. violated global trade law and harmed agricultural commerce with COOL.

The ruling also could affect as many as 70 other countries that have similar labeling requirements.

U.S. Trade Representative Ron Kirk said in March that the U.S. planned to appeal the decision.

“I just hope that doesn’t blow up in our faces,” Pandol said.



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