Three weeks of problematic red grapes from Chile with quality issues, has led to a weak market in Canada, but Robert Chiraz from Canadian Importer/Exporter Chenail reported that the market is starting to shift.
"The switch to the Red Crimson variety is leading to a recovery in prices due to the grapes coming out of a different region in Chile, with better quality. Prices had been selling for $10-25 (CAD) per case, but prices are expected to return to the $40 (CAD) range." said Robert.
Most of the grapes come by boat to Philadelphia from Chile and are loaded in Philadelphia to be sent on to the market in Quebec. The Chilean season starts with Flames, ending with Crimsons for red grapes. The Thompson variety and Sugarone continues throughout the Chilean season for green grapes.
"There have been some quality issues, which affects which customers you can sell to. Sometimes you have to pick and choose your lots which makes things more difficult. You have to do what you can to move your product before it breaks down and gets in worse condition."
Although bad weather has definitely been an issue, the Chilean season is winding down, and will end around May, so it is not unusual that the grape quality is not at its peak. Lesser grape quality is usual during the switch from one growing region to the next.
Green grapes have also started to have the same issues as the reds did three weeks ago. The market for green grapes is fairly week at the moment because of quality issues, but Robert reported that it is not as drastic as the red varieties.
"This year has been exceptional, grapes finished very high out of California last season, with prices staying high with the Chilean supply through to mid-Feb. We were paying $40 (USD) for grapes out of Philadelphia which means that we had to sell for $75 (CAD). Once you divide that by 18lbs, the initial cost is so expensive, along with taking the exchange rate into consideration, that you have to sell the grapes for $5.99 (CAD) per lb to get any type of profit. Customers in the supermarkets were going to the scales and seeing prices around $14 (CAD). The average family, with a $30-$50 budget for fruit and veg is not going to pay those prices for grapes, they will just pick out something else to buy." said Robert.
"It's been a tough season on all lines, for grapes, but also for most vegetables. It was insane, retail can adjust, but the restaurants who had a menu to maintain were really struggling."
Many prices have eased down and the merchandise has become more affordable, but the retail sector is taking its time to reduce prices. Robert reports that they were paying higher prices at one point, but now that the prices have decreased on the wholesale level, this is not being seen immediately at the retail level.
"What we have seen is that when the prices go up, retailers adjust their prices immediately, but when the prices come down they take their time to lower prices, cashing in at the customer's expense. This is really unfair to the consumer." concludes Robert.
