Raisin Situation in Selected Countries
|The 1998/99 raisin/sultana pack in the major commercial producing countries of the Northern Hemisphere is forecast at 564,000 tons (packed-weight basis), off 16 percent from 1997/98. Significant pack increases in Turkey, Greece, and Mexico will likely be offset by a 35-percent decrease in U.S. raisin output from last seasons record crop. Northern Hemisphere exports are forecast to decrease by less than 1 percent in 1998/99 based on lower exports from the United States. Exports are expected to increase from all selected Northern Hemisphere countries except the United States. U.S. raisin exports in 1997/98 increased by 2 percent. Major U.S. markets include the United Kingdom, Japan, Canada, Germany and growing markets like Brazil and the Philippines. U.S. raisin exports in 1998/99 are forecast to decrease 17 percent, based on smaller exportable supplies.|
Northern Hemisphere Countries
Record production expected in 1998/99
The 1998/99 sultana pack in Turkey is forecast at 250,000 tons, up 4 percent from 1997/98, due to favorable weather and increases in planted area. The quality of the crop is considered excellent and continuing to improve, due to better irrigation and other agricultural practices. The production area has been increasing in recent years, due to strong international demand for raisins and domestic demand for fresh seedless grapes. These grapes account for one third of all grapes and are located in the provinces of Izmir, Manisa, and Denizli.
Record exports expected for the second straight year in 1998/99
In 1998/99 Turkish sultana exports are forecast to rise by 4 percent to a record 200,000 tons, due to the larger harvest and excellent quality of the crop. The EU remains the most important market for Turkish sultanas (especially the United Kingdom, Germany, the Netherlands, Italy and France). Turkish sultana
exports will likely benefit from the elimination of the EU minimum import price (MIP) system in 1998. The industry plans to increases shipments of consumer-packaged raisins , which currently has a duty charged at a higher rate than bulk shipments. Outside of the European Union, Australia and Brazil are important export markets for Turkish sultanas.
Turkish domestic consumption in 1998/99 is forecast to increase 8 percent to 40,000 tons due to the larger available supply. In recent years reduced procurement of sultanas obtained by TEKEL, the state liquor monopoly, for distillation has occurred due to the high export demand for raisins in overseas markets. TEKEL is expected to purchase approximately 20,000 tons of sultanas in 1998/99. About half of this purchase will be from farmers and the rest from TARIS' stocks. In addition, it is estimated that approximately 5,000 tons of lower-priced sultanas have entered Turkey from Iran through unofficial border trade.
Phylloxera problem is nearly resolved and production could rise to more normal levels in 1998/99
The 1998/99 sultana pack is forecast at 42,000 tons, 47 percent above last year's revised output of 28,500 tons. Crop quality is considered satisfactory. The Phylloxera Recovery Program is replacing vineyards with Phylloxera-resistant root stock. By the year 2000, the government projects that 85 to 90 percent of the vines on Crete (the main production area) will be replaced with new plants. Production is expected to stabilize near 55,000 to 60,000 tons over the next few years.
Minimum import prices will be eliminated in the sultana trade in 1998 by the EU, with a complete phase out planned by the year 2000. Local cooperatives will set the minimum prices as they relate to market conditions. In general the Greek industry has noted that the previous system of minimum prices has tended to decrease prices by favoring EU imports of lower priced Turkish sultanas.
The EU is now providing direct income support to farmers based on their average production levels. The level in 1998 was 1,110,000 Drs/Ha ($3,791) for farms with a minimum yield of 2,800 Kg/Ha. In 1998 the minimum grower price was set by the Cooperative Unions at 170 Drs/kg (for grade No. 4). ($1.00 US = 298.7 Drs) In addition, the EU is providing a program designed to improve quality and sales of Greek sultanas. This season the program included the provision of 100,000 plastic containers to be used to pack the product instead of sacks. The program began in 1996 and had an initial funding level of $1.6 million and is operated by KSOS, the Cooperative organization in Crete.
Greek exports to rebound in 1998/99
About 90 percent of Greek sultana production is exported. Greek exports of sultanas in 1998/99 are expected to increase 37 percent to 37,000 tons. Major markets for Greek sultanas include, Germany, the United Kingdom, and France. When the supply of Greek sultanas increases, the industry hopes to expand sales to former and new markets. The Greek Government can promote sultanas through the Export Promotion Organization (OPE). Competition from Turkey and Iran however, is expected to be strong and there are already concerns about oversupply due to large crops this year in both those two countries.
Raisin production in 1998/99 is forecast to increase 22 percent to 22,000 tons, due to favorable weather during the growing season. Some lower quality fresh grapes were also diverted to raisin production. Crop quality overall is expected to be lower in 1998/99 because of heavy rains during the drying season. Production mainly occurs in Sonora, and to a lesser extent in Baja California. Thompson grapes make up 90 per cent of production.
In 1998/99, exports are expected to rise by 25 percent to 10,000 tons, based on increased supplies. The majority of export quality raisins are exported to the United States, with a smaller amount shipped to Canada. Mexican processors then import lower quality raisins (mostly from Chile) to meet internal demand needs. Export prices are reported as good in 1998/99 and approximate U.S.$0.60 per pound.
Mexico is expected to reduce its imports of raisins in 1998/99, due to the larger harvest. The United States and Chile compete to export raisins to Mexico, although Chilean product has a significantly lower price range. Mexico, which has limited storage space, usually begins importing Chilean raisins in February, when supplies are low. Over the next few years, Mexico is likely to import more Chilean raisins under the Mexico-Chile Free Trade Agreement.
Domestic consumption in Mexico in 1998/99 is expected to approximate last year's level. Limited consumer purchasing power has contributed to stable consumption trends. Bakeries and food processors continue to be the largest users of Mexican raisins. Christmas and Easter are the most important seasons for raisins. Imported raisins (except from the United States and Chile, which both have a zero tariff rate) are assessed an import tariff of 20 percent (0806.20.01).
Production to decrease sharply in 1998/99
Raisin output in 1998/99 is projected to be off 35 percent to 250,000 tons, packed weight basis. El Nino influenced weather problems that delayed the season are expected to contribute to the decrease. The first official estimate of the 1998/99 raisin pack in the United States will be released by the USDA's National Agricultural Statistics Service in January 1998.
Raisin exports to decrease in 1998/99 and the United Kingdom overtakes Japan as the largest importer
U.S. raisin exports are forecast to decrease to 100,000 tons in 1998/99 due to an expected smaller harvest. U.S. raisin exports in 1997/98 totaled 120,614 tons, 2 percent above 1996/97 volume and were valued at over $204 million. The United Kingdom, Japan, Canada, and Germany were the largest four markets, respectively.
The United Kingdom became the California industry's largest export market in 1997/98. U.S. raisin exports in 1997/98 to the United Kingdom rose to 26,270 tons, 6 percent above the 1996/97 volume, and valued at over $45 million. The U.S. industry has been able to make the United Kingdom its top market by focusing on new and varied uses for raisins and by focusing on new users.
The economic recession in Japan contributed to a 12 percent decrease in Japanese imports in 1997/98. Shipments to Japan were valued at $37.8 million. Despite these problems, U.S. raisins have maintained a high market share in Japan in recent years. The U.S. industry uses a three prong approach to promotion in the Japanese market, aiming its program at institutions (hotels, schools), manufacturers, and consumers. This strategy has enabled U.S. raisin exports to remain strong despite a slow economy, currency fluctuations, and increased competition. The U.S. industry's goal is to increase knowledge of U.S. raisins through consumer activities and educational materials. Future goals of this industry will likely include increasing domestic and international awareness and consumption of raisins/sultanas in traditional and new markets.
This includes educating the global consumer about the role raisins play in a healthy diet, especially for children and about the numerous and varied uses of raisins in all of the food sectors.
Activities to increase the awareness of raisins include: development of new products, offering educational seminars, technical seminars to expand the use of raisins by the baking industry, product development contests, trade ads, consumer advertising, and in-store promotions. These activities are designed to ultimately provide a high-quality product to consumers.
Despite Asian crisis, other markets signal export opportunities
Other markets showed promising growth in 1997/98. Canada increased imports 4 percent to nearly 12,000 tons with a value of almost $23 million. Germany, a market which had been slowing, increased imports 21 percent to 7,191 tons. Brazil, an interesting new market has expanded imports by 171 percent in 1997/98. In addition, most Scandinavian countries either maintained or expanded imports in 1997/98. Problems in Asia also did not deter the Philippines from increasing U.S. raisin imports by 48 percent.
U.S. consumption of raisins increased 11 percent in 1997/98 to 219,678 tons. Increased supplies and lower prices contributed to the increase. Consumption in 1998/99 is forecast to remain at last season's level due to tighter supplies supplemented by the likely drawing down of stocks to meet demand.
Southern Hemisphere Countries
The 1998/99 forecast for the total Southern Hemisphere sultana pack (harvested in early 1998) will be released in July 1999. The Southern Hemisphere 1997/98 pack estimate has been revised downward, from 87,750 tons to 86,472 tons based on smaller than expected harvests in Chile and South Africa. Selected country Southern Hemisphere exports in 1997/98 have been reduced from 57,800 to 57,654 tons based on the lower supplies.
The 1997/98 sultana pack was revised upwards to 38,500 tons, due to improved yields. This represents and increase of 55 percent above the previous year. This season, more sultana vines were replaced with premium wine varieties because of continued export demand for Australian wines. Wine exports are expected to grow over the next several years and may lead to a reduction in winery demand for multi-purpose grapes. Those grapes would likely be available for dried fruit production.
Australian raisin exports stable in 1997/98
Exports in 1997/98 approximated year's level at 15,500 tons. The larger harvest contributed to exports as stocks were at relatively low levels compared to the previous year. Primary Australian export markets include: Germany, New Zealand, Canada and the United Kingdom.
The 1997/98 raisin/sultana pack is estimated at 23,472 tons, down 38 percent from the previous year. Unfavorable weather conditions during the drying season, contributed to the decrease as much of the crop did not dry properly.
South Africa's raisin/sultana exports in 1997/98 are estimated at 19,154 tons, 34 percent below the previous year's shipments due to reduced supplies. Usually more than 70 percent of production is exported. South Africa's primary export markets are the United Kingdom, Germany, France, Japan and the Netherlands.
Policy changes are affecting South African agriculture this year. In Europe, the Minimum Import Price (MIP) system is being eliminated which will benefit South Africa because of the current value of the rand against the European currencies. The value of the rand against the stronger U.S. dollar benefits South African export sales.
The New Agricultural Marketing Act, Act 46 of 1996 has entirely liberalized the South African Agricultural Marketing System to make it a free (versus controlled) market system. The Dried Fruit Board was phased out in December of 1997. The South African Dried Fruit Cooperative has been converted into a private company and may to some extent fill the role the board previously had. The result is that dried fruit producers now market their products without the dried fruit board. This act is expected to facilitate the entrance of new traders in the South African export/import market.
(For further information on production, supply, distribution, and trade, contact Stephanie Riddick at 202-720-9792. For information on U.S. export marketing opportunities contact Kelly Kirby Strzelecki at 202-720-1341.)