Expanding Peruvian grape exports to the U.S. are denting prices for Chilean grapes. That's the conclusion of this U.S. Department of Agriculture Foreign Agricultural Service report.
From the report:
Peru’s developing table grape industry is quickly becoming a serious competitor for Chile in the U.S. market. Peru already has exported 93,000 tons of grapes this season, accounting for more than its total exports of the whole 2010-2011 season.
As a result of the increase of Peruvian exports during these first few weeks of 2012, the price of Sugraone grapes has decreased by 15 percent in the east coast of the U.S., according to Chilean fresh fruit quality Certification Company, Decofrut. The U.S. market amounts for 50 percent of all Chilean exports of table grapes and it is also the main destination for Peru’s table grape exports.
Industry insiders report to Post that the falling price of Chilean grapes is due to the increase in exports of the Peruvian grapes. Peruvian exports have increased because the harvest season in Peru begins in October, while the Chilean harvest season begins in mid November. The later start specifically affects the grape harvest in Chile’s northern region, Atacama. As a result, Peru’s grapes are available at an earlier date in the U.S., allowing the country to take advantage of the high prices available at the beginning of the season.
Another advantage is that Peru has a much cheaper workforce,” Chilean Federation of Fruit Producers President Antonio Walker added that this is especially significant in the Ica and Piura valleys, where most Peruvian table grapes are harvested. The Chilean grape industry has revealed figures which claim that the Peruvian workforce earns 80 percent less than in Chile. Water availability and usage are also determining factors in favor of the Peruvian industry.
In Peru, only 10,594 cubic feet of water are needed to produce a ton of grapes while in Chile, 17,657 cubic feet of water are needed, as was indicated by the Chilean Fruit Export Association (Asoex). “There are serious water availability issues in Chile due to the increasing demand for the resource by the mining companies,” as was indicated by the Asoex President Ronald Bown, mainly in the Atacama region.
TK: The USDA's latest shipment numbers show that through Feb. 11, Peru has exported 74.29 million pounds of grapes to the U.S. this season, up from 49.6 million pounds the same time a year ago. Meanwhile, Chile's grape shipments to the U.S. so far this season rate 264 million pounds, down from 286 million pounds through Feb. 11 a year ago.
USDA trade numbers show that U.S. imports of Chilean grapes last year totaled 400,000 metric tons, down from 408,000 metric tons in 2010 and 458,000 metric tons in 2009. U.S. imports of Peruvian grapes totaled about 30,000 metric tons in 2011, up from 17,000 metric tons in 2010 and 13,000 metric tons in 2009.
The value of Chilean grape imports to the U.S. totaled $631 million in 2011, down from $740 million in 2010 and $702 million in 2009. Meanwhile, value of U.S. imports of Peruvian grapes has surged from $31 million in 2009 to $49 million in 2010 and $84 million in 2011.
Coverage in The Packer has also noted Peru's emergence, though cost factors have not mentioned. From the Dec. 26 issue and reporting by Jim Offner:
"The strength of our deal here is Peru," said Dan Carpella Jr., director of sales and marketing with Pittsgrove, N.J.-based Nathel International.
Carpella was asked how Peru's total production compared to Chile's.
"Right now, I'd say it's a good complement and that's all it is to Chile," he said. "That could change in the next five-plus years, though. Peru's table grapes are a much smaller crop than Chile's. They're available at times when Chile tends to be short, so it fits well. But there could be some competition down the road."
Peru has the potential to be a major competitor to Chile, said Mike Bowe, vice president of Dave's Specialty Imports Inc., Coral Springs, Fla.
"Peru can grow just about anything, but it's only now being organized," he said. "Argentina has difficulties with some of the organizational aspects of the business. They don't have the logistics that Chile does. Peru, the same kind of thing. They need the lanes. Again, it's a wait-and-see at this point."
TK: The trend is with Peruvian grapes, and the reported lower input costs in Peru make it likely the market share growth in the U.S. market compared with Chile will continue for a few years. Check out the USDA grape imports stats by month here.
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