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Brazil is strengthening trade with new grape varieties

by Tad Thompson | November 09, 2010
PITTSGROVE, NJ - Brazilian grape grower-exporter Luiz Carlos Romano of VDS Export Ltda., Petrolina, Brazil, and Omar Abu Ghazaleh, import manager of Pacific Trellis Fruit, based in Reedley, CA, sat in the offices of Bifulco's Four Seasons Cold Storage Inc., in Pittsgrove, NJ, on Nov. 8 to discuss Brazil's grape industry with The Produce News.

VDS ships grapes in sea containers to Philadelphia's Packer Avenue Terminal. Bifulco then provides cold treatment and refrigerated warehousing for the fruit.

Mr. Romano's family entered the grape business in 1994 in Petrolina, located in Brazil's arid San Francisco River Valley. Today the Romano family grows 500 acres of table grapes and exports for growers of an additional 750 acres of vineyards.

VDS exports equal volumes of Festival and Thompson seedless white grapes, and also exports Crimsons, mostly for the European market. For the first time this year, VDS is exporting Black Seedless grapes, which are being harvested from year-old vines. The growing conditions are so strong that the vines mature very quickly, he noted.

"We try new varieties to reduce production costs," Mr. Romano said. Mr. Abu Ghazaleh said that Brazil's grape grower-exporters are facing more competition from late-season grapes from California, so the Brazilians "have got to lower their cost and have something different. So, there are new varieties they are working on."

One of these under trial is the Luisco, a white seedless grape that is harvested late when grown in California, according to Mr. Abu Ghazaleh, who expects that the variety will be planted more in Brazil next year.

Mr. Romano said, "It is a grower-friendly variety."

"It is market-friendly, too," Mr. Abu Ghazaleh added. "It has size and flavor" as well as a strong shelf life.

He noted that the North American market was once primarily focused in large-sized grapes. But flavor is now a bigger part of the demand equation. Thus, Luisco has a bright future.

"There are a few other trials, too" for Brazilian vineyards, Mr. Abu Ghazaleh noted.

All of the firm's grape varieties enjoy a strong domestic market.

"The economy is Brazil is running well," Mr. Romano said. The country of 200 million people has an economy that is growing by 6 percent a year. The strong domestic market "is good for the growers," Mr. Romano said, because it's a profitable market.

San Francisco River Valley weather is so steady that growers can cultivate grapes to coincide with selected harvest seasons, Mr. Romano said. Petrolina's latitude is eight degrees north of the equator. Growers there in northeastern Brazil use the seaports of Salvador, which is 300 miles away, or the port of Pecem, which is less than 600 miles from Petrolina. There is no refrigerated breakbulk service available, so all Brazilian grapes are exported in sea containers.

Cargo ships leaving Brazil have a 12-day transit time to either the United States or the United Kingdom.

The U.S. Department of Agriculture's phytosanitary rules require that Brazilian grapes be held in cold treatment for 15 days. Ocean transit time may be applied to that cold-treatment period, but often the treatment is done once the fruit arrives at cold storages in the United States. This is for several reasons, Mr. Romano explained. First, Brazil has experienced some problems meeting USDA quarantine treatments on the water. Second, seasonal rains can begin in Petrolina about Oct. 10, so it reduces the risk of fruit damage if growers harvest before then and store the fruit in the United States. Finally, fruit is often held in United States storages longer than 15 days for marketing reasons.

Brazil's grape exports have declined since a very difficult marketing year in 2008, when Brazilian grape prices were hurt by a combination of the global economic crisis and a very late California crop, Mr. Abu Ghazaleh said. Since that time, total exports have declined in 2010 to 3,200 containers from 5,500 containers. The difference is that the domestic market has increased grape consumption and some grape growers have moved to other crops.

Mr. Romano said that his production costs are high in part because the Brazilian government mandates a 10 percent to 15 percent increase in worker salaries every year. Fifty-five percent of his production cost is labor.

Furthermore, because grapevines are manipulated to match marketing seasons, they are always stressed and yields tend to be low. This ultimately increases production costs, as well.