by Tim Linden, The Produce News
Mango shipments from Mexico lagged behind normal volume in the February, March and April time period leading to a demand exceeds supply situation and high prices during the first part of the 2016 Mexican mango season.
That is no longer the case. “Hopefully, we have hit the bottom,” said Chief Operating Officer Gary Clevenger of Freska Produce International, LLC, based in Oxnard, CA, on May 16.
He said the supply situation has gotten “back to normal” and f.o.b prices reflect that. On that day, the market was $3.25 to $3.50 on fruit sizes of 10 or smaller (per carton). “The 6s, 7s and 8s are still scarce and bringing a good price.”
Small fruit, Clevenger said, was definitely in an oversupply situation.
Sergio Palala, general manager of Splendid by Porvenir, in Burlingame, CA, agreed. “Overall the crop is tremendously abundant, and for a long time, it wasn’t sizing up. Now we are just beginning to see a few more 8s and 9s.”
But looking for the silver lining, Palala said the small fruit “is ideal for promotions.”
Clevenger agreed stating that aggressive retailers can promote multiples at 99 cents. It has always been conventional wisdom that mangos are very price sensitive, especially in the ethnic neighborhoods comprised of Hispanic and Asian consumers who grew up eating the fruit from neighborhood trees.
Promotional pricing tends to have mangos flying off the shelves as easily and quickly as they used to fly off those neighborhood trees.
It was the lack of volume early that led to the high pricing and the abundance of fruit today. Clevenger called it a “fairly normal” situation for this time of the year. The downside, he said, is that growers get hooked on the early season higher pricing and it is difficult to get them to a lower level as the fruit multiplies on the trees.
The lack of promotional prices during the run-up to the Cinco de Mayo holiday clearly impacted retail promotions. The National Mango Board website tracks advertising promotions in the United States by date. The website shows that for the Cinco de Mayo holiday in 2015, there were 9,000 stores that had mangos on ad. This year the number of retailers promoting mangos on ad dropped to 5,100 stores. That obviously impacted movement in a negative way.
But both Palala and Clevenger reiterated that the situation is in the rear view mirror. Michoacan and Oaxaca in southern Mexico have been the major sources of mango supplies through these spring months. As we near summer, the harvest is moving north. The states of Jalisco, Nayarit and Sinaloa are all moving into production or will be soon.
A look at trends, as compiled by the Mango Board, shows that June is typically the heaviest volume month for Mexican mangos followed closely by July and then May, with April coming in fourth place and August coming in fifth, with about half of July’s volume.
This year there may be a shuffling of that order. June and July will most certainly take the top two spots. May most likely will come in third but it got off to a slow start and if supplies linger into August that month could move into fourth place eclipsing April.
Source: The Produce News