Shippers looking to favorable grapefruit export deal - The Packer

Shippers looking to favorable grapefruit export deal

11/10/2010 10:15:15 AM
Doug Ohlemeier

VERO BEACH, Fla. — Stoked by smaller-than-normal grapefruit volumes shipping to their largest customer, Florida grapefruit exporters began their fall season with a strong export market.

Inventories in Japan — the largest overall buyer of Florida-grown grapefruit — this year are smaller, around 60,000 cartons in mid- and late October compared to 600,000 cartons last year at the same time, said Paul Genke, director of sales and marketing for The Packers of Indian River Ltd., Fort Pierce.

“By the time Florida started, there was no grapefruit left in Japan,” he said in late October. “The yen is going up in Japan, which should help us somewhat. But on the other hand, the dollar is stronger against the euro, which should hurt us. Northern Hemisphere grapefruit production in Florida and Texas hasn’t increased a lot, so we should be in good shape.”

Because of smaller supplies, Genke said demand should remain strong in the U.S., Japan and Europe.

Florida’s later fall start and other factors make Japan a challenge for exporters this season, said Dan Richey, chief executive officer of Riverfront Groves LLC.

Recently returning from a two-week visit to Japan, Richey said the large importer experienced an abnormally hot and dry summer and saw major crop failures of their domestic crops, which should make them more reliant on imports.

While that may sound positive, Richey said there are some downsides to the situation.

“It’s a double-edged sword for us,” he said. “The Japanese economy is predicated on exports to the U.S. They’re not exporting as much because of their strong currency. We are happy to have a weak dollar from an exporter standpoint, but when the country you export fruit to relies on their export business to drive their economy, it causes their consumers to have less disposable income when their economy is in trouble.”

Richey in late October said Japan’s yen was at 88 compared to a more favorable 100 level.

To make up the supply shortage, Japan has been sourcing California and Texas fruit.

Once Florida volume begins in earnest, however, the country switches to Florida, said Jimmy Johnson, Far East sales manager for Premier Citrus Packers LLC.

In late October, dry Florida weather was preventing large shipments of fruit possessing proper maturity levels.

Johnson said maturities were improving and expected to begin bigger shipments by mid-November.

“We have had some fruit passing (in maturity) now, but not all of it and not a lot of it,” he said in late October. “I think the Japanese market will stay strong. Hopefully, we won’t have any weather events, so we can ship late. They like to receive fruit for their springtime. Hopefully, Florida can ship late and increase volumes. We are looking forward to a good season.”

Exports account for about 70% of Greene River Marketing Inc.’s sales, said Pat Rodgers, president.

Greene River began shipping to Japan and Europe in mid-October.

Rodgers said the European deal went well last year and said he thinks it should go well again this year.

“The European market is also seeing a good gap, so prices are going up there as well,” he said. “There is a lot of pent-up demand in the export markets this year. As long as Florida is the premier product over there as in Japan, there are other sources of fruit, but they will take second fiddle as we start shipping fruit over there.”

European demand remains high following smaller shipments of South African fruit and Florida’s later start, said Bill Jarvis, Premier’s director of sales and marketing and European sales manager.

“There’s not a lot of volume that usually is there this time of the year going through it,” Jarvis said in late October. “That’s a market that’s a little on the void side on grapefruit. I don’t think they will ever catch up with what their needs are and because of the canker restrictions they have.”

Korea and Taiwan remain other important markets for Florida-grown grapefruit.

Korea used to be a larger market and at one time imported as much as 600,000 boxes from the U.S., Richey said.

That market, however, sometimes swings to other commodities. One year the South Korean market went crazy for bananas, dampening citrus demand, he said.

This year may be different.

“Korea is growing,” Richey said. “We are anticipating a little more volume being sent there. The largest percentage of gains we anticipate this year will be in Korea. They are a bright spot on the horizon. Taiwan is growing as well.”

Richey said Taiwan’s consumers have been putting more bags of grapefruit in their shopping carts.



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