Galvan says the majority of the grower-broker’s exports are “destined for the Far East and South Asian markets followed closely by Latin America.” To maintain year-round supply, Fruit Royale imports from Peru, Chile, Egypt, and Mexico, with the latter accounting for the lion’s share of its incoming shipments. Peru, however, is promising higher volume as new plantings come into production.
Uncertainty in the Future
Vallis, whose EG Enterprises has a healthy export business to Japan, Southeast Asia, and Canada, is uncertain about the future. “It depends what happens with U.S. trade policy,” he says, admitting, “we’re on edge about it.”
With a North American Free Trade Agreement (NAFTA) renegotiation looming in the future, many in the industry with strong international ties are uneasy about possible trade policy changes. “The jury is still out as to how, but no doubt it will have an impact on our business,” says Galvan.
Giumarra Vineyards relies heavily on international relationships, particularly with Mexico where the company grows product. Imports surpass exports as the larger part of the supplier’s business. “It all depends on the terms that are negotiated,” explains Corsaro-Dorsey.
Vallis emphasizes that it’s not just NAFTA affecting trade relationships, but other factors as well—including the strength of the dollar. “A stronger dollar [makes it] harder for Mexico and Canada to buy product,” he says, and finds the idea of “raising tariffs from countries that tend be our biggest import partners” unnerving.
The result, Vallis fears, would be bad for both sides. “We export to countries that want our grapes and those countries export products to us—if we start raising trade barriers, what else can they do to retaliate but buy less?”
Competition Among Vineyards
Because no other region actively ships during the California season—with the exception of an overlap of the Coachella Valley and Mexico growing regions— the import market is relatively free of competition. For exports, it’s a different story.
Many of the big players like China, Korea, and Japan grow domestically and can undercut pricing. “So when we export,” comments Corsaro-Dorsey, “those markets have a cheaper option.”
An example is the Red Globe variety; she says China is “growing them better and better,” so California growers are switching to other cultivars “because they can’t compete with the lower prices.” Fortunately, new proprietary varieties still give U.S. growers and shippers an edge in the highly competitive export circuit.
