The SUMMER is always a challenging time in the UK for fruit outside the soft-fruit market, as retailers look to boost berry campaigns, sometimes leaving other perceived “luxuries”, such as grapes, sitting on the shelves.
But the category has performed well in the last three months, with the problems created by oversupply in Chile and poor volumes from South Africa and India forgotten due to the onset of the Egyptian, Moroccan and Israeli seasons.
Egypt has proved the real winner, with high quality and retail prices. The country also airfreighted some product at the beginning of the season, due to a shortage of red grape from Chile, creating a strong market.
One importer tells FPJ: “Retail prices have been the highest I have known for an Egyptian season. At the start of the season, there was a lot of airfreight on red, as it was short from Chile, but obviously that takes some volume away from seafreight later on, so the job has been relatively short and kept prices strong.
“There has been noticeably less volume coming from Israel [which has announced a 21 per cent fall in turnover from agricultural exports for the first quarter] this season, so there was a bit of airfreight on white grape. Extremely hot weather in Morocco has meant sugars have been slow to develop there, so Egypt has been the most attractive [source].
“In terms of airfreight, it is always cheaper to import from Egypt as a lot of the growers there also export products like mangetout with longstanding airfreight links and have struck deals with the airlines, so it is comparatively cheaper.”
Another insider says: “Last year some people tried to ship from Egypt too early but the customers weren’t coming back as the quality wasn’t there. If you get too greedy and ship too early it makes repeat custom difficult, so you need to be strict on things like minimum brix levels.
“We started seven to 10 days later on Egyptian seafreight this year, on June 16 rather than June 6, and did around 100 tonnes of airfreight as the prices were so good.
“Last year, we had cheaper Israeli product and overhang from Chile and India kept the market supplied. This year, Chile finished earlier as the weather was very hot and they just had to pick and pack straightaway. In a normal year, Mexico would have a larger part to play but no one will touch it because of swine flu. It is a sad reality as there is no evidence it is affecting grapes, but people are wary of seeing Mexico on products at the moment.”
Egyptian grape will doubtlessly continue strongly throughout the month, with product available to be imported to the EU duty-free until July 14, at 10.6 per cent from July 15-20, and 21 per cent thereafter. It is now garnering £8-9 for a 4.5kg box, with retailing abnormally high at more than £3 per kg, and red grape making as much as £4.99 per kg. “Normally prices are £2.49 at best at this point,” says one insider. “Last week, most retailers were still offering £3.99 per kg - when the price is that high it does not move off the shelves quickly, but that is not too terrible as no one wants to see empty shelves.”
The EU’s duty increase on grape imports reflects the onset of the European season, with Spain, Italy and Greece set to play major roles to the UK market with France, and even Turkey, offering further options. The Spanish season, which is traditionally slow starting, is set to be late in entering the market with any serious volume this year, with reports that quality is poor due to early picking. “On white seedless, Spain is very late. There are bits and pieces available but they aren’t right and entering them on to a market that is full of top-quality Egyptian grape is the worst thing they can do,” says one insider. “Red grape will continue to be really tight for a while I think; Flame may start next week but the quality really isn’t great and I don’t think we will see any let up until Crimson hits in August.”
The Spanish are acutely aware that the UK is waiting for product and, coupled with Italian production, are relied upon to ease white seedless supplies later this month.
Italian growers are said to have turned a lot of their attention to the Scandinavian market, with high prices attracting producers away from the comparatively less lucrative UK market in July and August. As such, Greek supplies in the UK will be key and some importers may look to supplies from Crete to kick the supply off early.
Turkey is beginning to offer an increasingly viable option as importers look to back up supplies with further producer countries. One importer says: “We are seriously looking at Turkey to grow the market. Traditionally, they have always been smaller, yellowish sultana grapes and not really of supermarket quality. But we had some Thompson from Turkey last year and it did the job - they produce cheaper than the Greeks but the main thing is just to be there in case it becomes big in years to come. It does get extremely hot in Turkey, hotter even than Greece, and those kind of temperatures can obviously cause problems.”
Looking forward, the Brazilian season, which could reach the UK in October depending on stores of Greek product, could present some real challenges.
Up to 20 per cent of growers are reported to have turned their back on production after problems finding US buyers for product last year created a disastrous season. Moreover, considerable amounts of rain are said to have lowered the potential quality and increased the likelihood of disease for the upcoming season. This, as well as fewer plants per hectare in production, comprise a set of circumstances with considerable foreboding. However, the success of import brands, such as Capespan Gold, and the recent fall in Brazilian growers’ price demands, will hearten the industry in the UK.
One insider concludes: “They always struggle to get the balance between the UK and the US, overloading on the market and leaving the other short, then switching this round the following year. It will be interesting to see how it fares against stored Greek fruit with the euro beginning to creep back to us, but the fresh quality may give fresh Brazil the edge.”
EGYPT TRIUMPHS IN EARLY SUMMER
Egypt has once again demonstrated itself as a reliable supplier to the UK and the EU, writes Husam El-Din Awad, managing director of Fruitex. The 2009 grape season has brought about a confidence that Egypt can produce consistently good quality, year after year, within a defined period and market window. Traditionally, countries that try to produce earlier and/or later to compete with Egypt achieve inconsistent quantities and quality.
Fruitex has concluded a very successful season, witnessing a 20 per cent increase in volume on last season’s production, receiving a relatively stable price throughout the season. The start of the season experienced a 20 per cent increase in price on 2008. Fruitex has also begun its first exports from our new development in the south of Egypt; first volumes arrived in the UK on May 15 with our Early Sweet variety, and later this was followed by Sugraone.
Our company has been working for the past couple of years on extending the historically one-month season through to July - we are now able to supply from May 15 through until July 15. Our future goals will be to supply fresh grapes from May 1 until the end of July.
Another level of expansion that we are working on is the production of different varieties and looking at different markets. In the future we will be diversifying our markets and will start supplying retailers in Europe and the US, rather than concentrating on our historical market of the UK.
The US market is a very large market that is often under-supplied during the start of the Egyptian season and our company is able to supply Early Sweet from the first weeks of May, while the only supply during that time is Perlette from Mexico.
As Fruitex, and Egypt as a whole, increases its production, opportunities arise in different parts of the world and we are in a good position to take advantage of these. We have been approached by several retailers in these new markets to supply consistent quality and quantity of grapes.
Egypt has invested heavily in its industry over the past few years, including planting large acreages and building packhouses and coldstorage facilities to give us the edge over Morocco and Israel. This investment is very difficult to match from both Israeli and Moroccan farmers. Egyptian companies are also very dynamic and are able to adapt to the changing market very quickly, due to the larger companies leading the industry.
Israel has serious issues with water prices and availability. It is a very fragmented industry with small growers and large export firms, which makes it very slow in responding to market demands. Morocco has small acreages of production, and has also had serious issues with unstable weather and water availability. Rains often come at a time that is very risky for grape production.
Fruitex has planted new varieties, doubled its planted acreage in the past three years and is very active in pursuing new technology for production.
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