Indian Grape Prices in Europe Fall due to Increased Supply

India’s Fresh Grape Price Fluctuations and Market Dynamics

The European market for Indian grapes has witnessed a notable price decline, attributed mainly to a confluence of factors affecting supply and demand dynamics. The primary driver behind this downturn has been an oversupply of Indian grapes in Europe, stemming from an exceptional grape season in India, despite weather disruptions caused by untimely rains and hailstorms. This oversupply situation was further compounded by the prolonged South African grape season and irregular vessel arrivals, which collectively led to an oversupply situation in the European market.

Figure 1: Tridge Price Index and Forecast for Fresh Grapes in India

Source: Tridge

Prices for Indian white seedless grapes, typically packaged in 5 kilogram (kg) punnets, plummeted from EUR 13 to EUR 9 within H1 of Mar-24, reflecting the severity of the oversupply issue. Similarly, prices for 4.5 kg boxes of grapes dropped from EUR 11 to EUR 8 over the same period. The oversupply problem was exacerbated by the irregular arrival of vessels, creating a bottleneck in the market's ability to absorb the influx of grapes. According to Tridge's forecast, the price of fresh grapes in India will continue its downward trend, albeit at a slower pace compared to the previous period.

Another significant factor influencing the market dynamics has been the Red Sea crisis, which has significantly disrupted European exports and posed challenges such as increased costs and delays. The extended transit time to Rotterdam, approximately 40 days, has notably impacted the quality of delivered fruits, raising concerns among exporters. Despite these challenges, Indian exporters have proactively implemented measures to mitigate quality issues from prolonged transit times by purchasing high-quality fruits and making adjustments to post-harvest procedures.

Furthermore, grape prices in India have demonstrated a volatile pattern throughout the season. Initially, a shortage of high-quality grapes led to higher prices. However, prices declined as the season progressed and more grapes became available. With the season approaching its conclusion, prices are beginning to rise again, highlighting the cyclical nature of grape pricing dynamics.

India’s Fresh Table Grape Production and Export Trends

On a global scale, fresh table grape production is projected to increase, with India's table grape production expected to rise slightly to 3 million metric tons (mmt), despite the effects of adverse weather like rising temperatures and untimely rains The harvest began earlier than usual and is expected to end two weeks ahead of schedule. According to United States Department of Agriculture, Foreign Agricultural (USDA FAS) Fresh Apples, Grapes, and Pears: World Markets and Trade report, exports from India are anticipated to increase by 13,000 mt to 295,000 mt, focusing on expanding exports to the European Union (EU), India's largest overseas market. While Europe and Russia remain the principal export destinations for Indian grapes, the European market is approaching saturation, restricting future development potential for Indian grape exports.

The fall in prices of Indian grapes in Europe can be attributed to increased supply from India, the challenges posed by the Red Sea crisis, fluctuating prices throughout the season, and a global increase in grape production, leading to market saturation in Europe. Tridge's recommendation for Indian traders would be diversification of export markets to ensure the long-term sustainability of the Indian grape industry. It seems that the European market gets easily saturated, causing prices to go down and narrowing the profit margin for traders and producers from India.