Chilean grape sector may face looming market saturation, growers claim

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Chilean grape sector may face looming market saturation, growers claim

While Chilean table grape growers are enthusiastic about the high prices currently seen in the U.S., they may need to brace themselves for the effects of greater volumes drawn to the market.

Subsole commercial manager Juan Colombo said the U.S. ended its Californian fruit season with very high consumption and an optimal price-to-volume ratio, resulting in a very active market.

"The North American market represents almost 50% of Chile's shipments, and this is characteristically very flexible," he said.

"Prices in the United States are good but reacting to a market because of its strong prices always ends badly," added Cristían Ureta, commercial manager for the U.S. and Europe at Exser.

"If everyone in the market starts to go to the U.S., the market will probably crash," Ureta warned.

Colombo said Chilean fruit shipments had moved slowly but consignments of considerable size were expected to arrive this week.

"Chilean fruit from the Copiapó Valley was very slow to arrive, and afterwards there was the debacle with the central valleys. Because of these factors, the fruit will finally be reaching the North American market this week – 2.5 to 3 million boxes – in which case one could say that the market was undersupplied."

Meanwhile, Ureta said the high prices in California would fall sooner than expected, though due to the shortage of stock prices had remained strong for the time being.

"Aside from the fact that California ended its season earlier than expected and left more space to enter the market, volume from Chile is currently much lower than last year. The country will start to pick up its volume in the North American market this week," Ureta said.

 

"A flood of Chilean grapes [in the U.S.] is relative… an oversupply depends heavily on demand. If today you have one million boxes consumed at the unit price, and 2.6-3 million boxes arrive, supply is high and there is no need to send more boxes," Colombo added.

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