Monday, April 7, 2008

Central American papaya shipments poised to rise

Online article in The Packer By Doug Ohlemeier

After years of smaller Central American volumes, papaya importers are preparing for larger shipments.The return of papaya shipments should mean an end to the deal’s higher-than-normal prices, shippers said. Volumes are forecast to increase significantly from Central American production regions as groves rebound from Hurricane Dean’s devastation last fall.

Brooks Tropicals Inc., Homestead, Fla., one of North America’s largest papaya growers and importers, plans to return to full production in July after being out of production the first three months of this year.

“We’re all real excited to be back in business,” said Bill Brindle, vice president of sales management. “August was our last period of normalcy. We have a number of key retail partners that tried to switch over to a maradol papaya while we were out of business, but it just didn’t work for them.” Brindle said many retailers told them they hadn’t been able to find quality papayas since the hurricane.Papaya shipments generally remain consistent throughout the year.

Though some months may see lower production, volumes normally increase in May and June, said Zevy Mashav, manager of Miami-based tropical broker and importer Caribbean Gold Inc.“Right now, everyone wants papayas, but not too many people have them,” he said. “The demand is always good, but supply isn’t always good.”

Brooks’ papaya production was 5% to 12% of normal volumes in January and February, and the company expects to hit about 73% of normal in May before exceeding 100% in July.For the 12-month period beginning in July, Brooks expects to ship 2.2 million 32-pound cartons, Brindle said.

The U.S. Department of Agriculture April 1 reported 30- to 35-pound cartons from Belize and Guatemala selling for $16-18 for 7s and 11s, $17-18 for 8-10s, and $14-16 for 12s. The USDA in 2007 didn’t report Belize spring papaya prices. For Mexican product, 35- to 40-pound boxes of 10-count maradols crossing in Texas in early April sold for $16-18.35, according to the USDA. That compares to last year when the same packs sold for $12-13 in late March and in late April.

The smaller Brazilian papayas in 7.7- to 10-pound cartons normally sell for $9-10, said Andres Ocampo, director of operations for HLB Tropical Food USA Inc., Plantation, Fla. A severe drought has harmed Brazilian production and buyers shouldn’t expect strong movement until May, he said.“Come June and July, expect increases in volume so there will be opportunities to do promotions with decent volumes from those months,” Ocampo said. “The third quarter of the year will be good for us, in terms of volumes, to develop programs for retail promotions.”Ocampo said he expects volume to increase by 20% to 25% this summer.

More papayas have been arriving from Central America, Mashav said, because Brazilian growers have been sending their product via more costly airfreight. The growers chose air, he said, because the product’s shelf life can’t withstand the three weeks required from packing, loading, shipment and unloading via boat. The air shipments, Mashav said, have made for fewer quantities and higher prices.

The biggest problem Brazilian growers are facing, Ocampo said, involves the weakened U.S. dollar. Growers, he said, need more money to cover their production costs. The weak dollar has depreciated against the Brazilian real from an exchange rate of about 3.13 real per dollar in June 2004 to 1.70 real per dollar today, Ocampo said. HLB represents Caliman Agricola SA, Brazil's biggest papaya producer. Brazilian papayas shipped to the U.S. originate in the Espirito Santo and Bahia and Rio Grande do Norte regions.