High Production and Low Prices for Californian Blueberries, Demand for Spanish Watermelons Slowly Recovering

Despite a good harvest, Californian blueberries are having trouble dealing with the influx of Mexican berries as well as decreased demand from COVID-19. China's follow up on the Phase 1 deal is expected to alleviate some of the difficulties. Spanish watermelons have been met with hardships in production as well as demand, for which the latter has been recovering since May.

Blueberry - United States

Californian Blueberries in Season

The blueberry harvest season in the United States runs from March to October, with the harvests for California, Georgia, and Florida currently undergoing. May is the start of the harvest season for certain varieties of blueberries in California and North Carolina.

Harvest / Price Estimates for 2020

The blueberry harvest season has commenced in California, and production is estimated to hit a record volume of 77 million pounds with the peak harvest during the last week of May and first week of June. There have, however, been low prices in the market even before the peak harvest period as US consumption has not increased along with the supply. According to Tridge data, US blueberry prices have fallen by 23.3% in the last quarter.

Export Outlook for 2020

The price drop is troubling for US growers who are also witnessing increases in US import volumes from other regions such as Mexico. In addition, reduced demand from customers in retail stores and restaurants from COVID-19 has posed another challenge, especially as approximately 20% of California’s blueberries are sold to the hospitality industry. Selling the products to processors to produce juice or dried products is also not easy, as the coronavirus has increased production costs by 20 to 25%.

US suppliers are expected to increase focus on sales to the international market. Recently, the Philippines has officially opened up to US blueberries, making the US the only North American source to have official access to the Philippine market. According to the USDA, annual sales were at an average of USD 150K over the last 5 years, which could potentially reach USD 500K this season.

Furthermore, China following up on the Phase 1 deal will allow more blueberry exports for the United States as part of the decision to increase agricultural imports by an additional USD 32 billion in the next two years. With phytosanitary protocols still to be finalized, however, sales may not be made until the very end of the Californian harvest season, nevertheless allowing suppliers of other states such as Oregon and Washington to be able to take advantage of the deal in time.

Watermelon - Spain

Spanish Watermelons in Season

The harvest of Spanish watermelons runs approximately from April to October and is currently undergoing in the Andalusia, Valencia, and Murcia regions, the main growing areas. Of the regions, the harvest for the city of Almeria in Andalusia runs from May to June, producing and exporting over 50% of Spanish watermelons.

Harvest Estimates for 2020

There has been limited supply in Almeria this season from excess rainfall and lower temperatures in the spring as watermelons are best cultivated in warmer weather. The acreage of watermelon plantation has been reduced by 10%. There has been the most acreage decrease in the Castile La Mancha region, where the most temporary workers are needed. Production for this season is expected to be at 1.21 million MT.

Export / Price Outlook for 2020

Spain is the world’s largest watermelon exporter at an annual export value of USD 473.9 million in 2019, accounting for 30.5% of the world’s export share. However, according to Tridge data, Spanish wholesale prices had been decreasing from late March as shoppers turned to food items they could store for a longer period of time. Since then, demand has been slowly recovering and prices have started to rise back from May.

The Graph Indicates Export Volumes for HS Code 080710:Melons (including Watermelons), fresh

Sources

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