China’s demand could attract more Chilean grapes

See updated coverage: Chilean fruit exporters are assessing the effects of a Nov. 12 storm in many fruit growing regions of the country.

Chilean table grape exports to the U.S. could decline slightly in 2018-19 as more attractive prices in China may pull some volume away from North America.

In its annual report on Chilean deciduous fruit, the U.S. Department of Agriculture’s Foreign Agricultural Service said table grape exports to the U.S. decreased by 5% while exports to China increased by 21% in the 2017-18 season.

Even so, the U.S. is the top market for Chilean table grapes, accounting for 344,180 metric tons, or about 47% of total Chilean table grape exports in 2016-17. 

The USDA said exports to the Netherlands and South Korea during 2017-18 decreased by 4% and 6%, respectively.

For 2018-19, the USDA said Chilean table grape exports will continue the trend toward diversification, with more grape shipments going to China in to gain higher prices.

Overall, the USDA estimates that Chilean grape exports will total 720,000 metric tons in 2018-19, a 1.5% decline from 2017-18. That projection assumes regular yields and a decrease in planted area, according to the USDA.

With harvest from November to April, grapes are the No. 1 planted fruit crop in Chile. 

Grape vineyards stretch from the Copiapo Valley in the northern part of the country to the Maule region in the southern part of the country, according to the USDA report.

The Copiapo Valley produces the earliest table grapes from Chile in late November, concluding harvest in mid-February, according to the USDA.

Harvest of table grapes in central and southern Chile begins in mid-January and lasts until late March, according to the USDA.

The USDA said growers in the Copiapo Valley are putting a priority on renewal of orchards with modern varieties. 

“Producers have been renewing their orchards for the last seven years at a 20% renewal rate. Most of the producers in the Copiapo Valley are large companies that have vast experience in the export markets and the capacity to make necessary investments,” the USDA report said, noting that the Copiapo region sends about 75% of its grapes to the U.S.

The USDA said export volume from the Copiapo Valley typically ranges from 82,000 metric tons to 100,000 metric tons every season, with 70% of export volume destined for the U.S. China takes red globe variety grapes grown in Copiapo.

This year, the USDA said grape suppliers in Copiapo expect their exports could reach about 90,200 metric tons.

Karen Brux, managing director of the San Carlos, Calif.-based Chilean Fresh Fruit Association, said the great news with grape exports out of Chile is the shifting volume of varieties. Brux said exporters are shipping more of the varieties that the trade wants (varieties like Timco, Sweet Celebration, etc.) and less of the varieties that have fallen out of favor, such as flame seedless.

2017-18 exports of flame seedless to the U.S. were 35% down from just three years ago, which is a significant shift. 

“The North American market is of huge importance to the Chilean fresh fruit industry, and exporters/growers are moving quickly to supply what this market wants,” she said.

Grape supplies from Peru are becoming more and more important and are somewhat overshadowing grapes from Chile, said Craig Padover, account and category manager for Jac Vandenberg Inc., Yonkers, N.Y.

“There are some structural changes in (the) Southern Hemisphere related to California extending its season and Peru, which has some strategic advantages to the northern Chile grapes, such as a season that starts earlier and proprietary varieties, which hold their shape better during shipping and have great flavor profiles,” Padover said. 

“The cost of producing those early northern Chile grapes is very high. Unless you can get a good price, it doesn’t pay.”

While new varieties such as sweet globe seedless from Peru present challenges to traditional Chilean varieties, Padover said Chilean crimson grapes have great shape and flavor.

However, flame seedless out of Chile may have an especially challenging time, because in January and February it will be competing with these new varieties.

Grapes from Chile’s northern regions — the earliest production areas that traditionally hit the December and January U.S. marketing window — have faced strong competition from Peru in recent years, said Eric Coty, executive director of South American imports for The Oppenheimer Group, Vancouver, British Columbia.

While U.S. imports of Chilean grapes have remained stable at near $800 million per year in the past five years, U.S. imports of Peruvian grapes have grown from about $80 million in 2013 to more than $361 million in 2017-18.

“With the expansion of Peru, which harvests seedless grapes for arrival to the U.S. November through March, the early Chilean regions are realizing a decline in demand,” Coty said. 

“In the years to come, we are likely to see fewer Chilean grapes in December and January than we have historically.”

Another factor for early season grapes from Chile, Coty said, is the development of late-harvested varieties in California.

“California’s ability to harvest, pack and market grapes later in the year places provides retailers with another option in November and December. The potential for later grapes also means that the ‘pipeline’ is rarely empty,” Coty said.

This year, Coty said that California’s crop appears to be large in volume and fairly stable in shelf-life. 

“Both Peru and Chile will still bring grapes to North America, though the California crop will be a challenge for both Peru and Chile in December,” he said. 

The good news, Coty said, is that all three countries should have good volume of high-quality, promotable table grapes going into the end of the year and into next year. 

Meanwhile, producers in the central and southern regions are also renewing their orchards with new varieties, at a less rapid rate, the USDA said. 

Northeast editor Amy Sowder contributed to this article.