Is the UK grape market heading from feast to famine?

Neil Denny of fruit importer Richard Hochfeld said in February that there were an “estimated 11mn boxes of grapes from South Africa currently to hit Europe in the next few weeks” following hold-ups to shipments. This “tsunami of grapes”, he warned, would create a “feast to famine situation” on the UK market.

Green seedless grapes will likely be the first to go short, he expounds to FPJ in mid-March. “South African fruit is clearing quickly,” he says. “This is usually followed by Indian fruit. However, volumes from India remain lower than previous seasons. Whilst we still see reasonable volumes available to be packed, and quality looks good, prices in the market in India are very high and this will translate to values higher than previous seasons, particularly in Europe.”

The strength of the grape market in the US also has an impact, he says. “A lot of Chilean fruit is heading there as a result of this strength, despite the uncertainty around tariffs,” he explains. “This means shipments of Chilean fruit to the UK and EU are not heavy.”

Due to the impact of rains in Brazil, there will be a breathless wait for the start of the Egyptian season, reveals Denny. Meanwhile, the conflict in the Gulf will lead to the continued rerouting of Indian fruit around the Cape of Good Hope. “This will mean 35 days minimum in transit for those volumes, adding time, cost and condition risk,” he adds.

Red seedless will be the next to go short, according to Denny. “South African supplies will probably clear in the second half of April,” he explains. “Some retailers in Europe have switched from planned promotions of green seedless to red seedless in order to manage potential green seedless shortages, and to clear the higher levels of red arriving quickly. This will leave the market reliant mostly on Chilean volumes.”

Although more Chilean fruit is programmed for supply to European markets, Denny says forecasted rain in Chile may “dampen enthusiasm for more distant markets”. “This could result in fruit heading instead for the US,” he suggests, “as the market there appears to be strengthening for late red varieties.”

Meanwhile, black seedless will be “pretty much non-existent”, laments Denny, as the May-June window is traditionally supplied by shipments from Brazil. “These are under threat due to the weather,” he says, “and there are no real alternatives in May.”

The Gulf crisis has added to the season’s challenges through its impact on freight rates. “With volatility in oil prices, most shipping lines have increased bunker charges, adding a few hundred dollars to freight rates,” reveals Denny. “Whilst oil prices continue to rise and fall at unprecedented pace, the shipping lines have priced in that volatility. It doesn’t seem a huge rise on each box, but to suppliers selling on a CIF [Cost, Insurance, Freight] basis, or buyers buying on an FOB [Free on Board] basis, the accumulation of £250 extra on each container will add up.”