Peruvian grapes have been one of the rising stars on China’s fruit import market over recent years, spurred on by their favourable timing ahead of Chinese New Year and their advances in quality. Last season’s campaign was particularly successful, prompting predictions of big future growth. But as the new season dawns and the opening prices are quoted, some buyers are asking whether suppliers’ expectations have been overinflated.
“The Peruvian price expectations on the early harvest this year are unrealistically high,” said Jason Bosch of Shanghai-based importer Origin Direct Asia. “Prices `in mid-October` are being quoted in a range of US$24-35 per carton for Red Globe – they’re around 20 per cent higher than those for US grapes that are already in the market. If they’re not careful, they’ll price themselves out of the market and possibly create increased commitments from buyers on the US fruit, reducing their market share.”
The temptation to ask such high prices is always strong given Peru’s window of exclusivity as the first supplier of new-season grapes from the Southern Hemisphere, with Red Globes that are available in advance of Chinese New Year (CNY). Changing the complexion somewhat this year, however, is the fact that the California grape season is running later than usual while Chinese New Year falls on 23 January, earlier than last year. That means California should be vying for the CNY market with Peru.
“There’ll be a lot of late US fruit available during December and January,” said Bosch. “Our major US supplier only began loading significant volumes in mid-October and they’ll load their last fruit in week 52, so the volume should flow until the end of January. The Californians are definitely pushing their season out to take advantage of this year’s earlier CNY.”
Fresh, new-season fruit is preferred over stored product and therefore usually commands a premium, but Bosch pointed out the US fruit is so late to be picked this year that it will be pretty fresh. “Peru’s got good fruit but California has too so if their prices are significantly cheaper, the buyers will go with the US,” he said. “Right now, the US pricing is similar to last year – fresh, good-looking fruit is selling for only US$22 per carton whereas the Peruvian product is costing around US$30.”
Matthew Tang of Hong Kong-based importer Linkage Holdings said it’s always a challenge for grower-packers from Peru to understand the window they’re working with in China and figure out the right price. “It’s easy for them to get high prices for a couple of containers at the start because buyers will be prepared to pay high prices before CNY, but what about the rest of the season, the rest of their crop?” he noted. “If they make the prices more affordable the buyer might take the whole crop. After the big demand for the festival period, then the disaster comes as the market gets really tough.”
Tang suggested Peru should also look at different packaging formats to make its higher priced fruit more palatable for the gifting market. “All the fruit is currently coming in 8.2kg `styrofoam` boxes but it might be good to trial a smaller 5kg `cardboard` carton before Chinese New Year as it’s better for gifting,” he commented. “When the prices are high, smaller packaging tends to sell better and it appeals to smaller retailers who can’t afford to buy a big box. South Africa is currently the only one to offer a 4.5kg carton for grapes, especially for Chinese New Year, but we think there’ll be this trend towards more quality-conscious packaging.”
