Exchange rates play a role in the U.S. mango market, although not everybody in the mango business agrees how big a role it is.
Exchange rates are of keen interest to mango shippers, who import an overwhelming majority, if not all, of their product.
The Brazilian real has drawn most of the attention of mango dealers. The real, which Brazil launched as its currency in 1994, has a history of volatility, according to financial observers.
In March 2009, the real was trading at 2.43 to the dollar; by November, it had fallen to 1.74, before rallying slowly to its most recent peak of 1.88 on Feb. 5.
That kind of volatility has jangled the nerves of more than a few mango shippers who deal Brazilian mangoes.
“Last year, we were severely affected by the exchange rates,” said Flavio Muranaka, owner of Amexport, Petrolina, Brazil. “As we receive dollars and have to pay our costs in our currency, we had an increase of our costs in more than 35% in dollars than past years. It means that we were less competitive against other countries that have a breaking-even point that is lower that ours.”
Muranaka said that means fewer Brazilian mangoes make their way to the U.S.
“With this situation, there was no way to increase the export volume of mangoes from Brazil,” he said.
But the fruit has to go somewhere — and it does, said Michael Warren, president of Central American Produce Pompano Beach, Fla.
“It makes the European market look a little more attractive,” Warren said. “They’ll push a little more volume that way. The U.S. is still necessary, and they still have to send product here.”
Other countries’ currencies have been more stable, though, and that’s a kind of salve, shippers note.
“There aren’t any exchange-rate issues now, really,” said Tony Godinez, owner of Godinez International LLC and Fresh Ripe LLC of Hidalgo, Texas.
He noted the Mexican peso had stayed more or less even with the dollar, which is a comfort, considering the large volume of Mexican product that will flow across the border in the next several months.
“The peso has been fairly stable these past few months,” he said. “I think the same is true with the South American countries.”
Chris Ciruli, a partner with Nogales, Ariz.-based Ciruli Bros. LLC, said the U.S. dollar is in a stronger position than last year.
“The peso has strengthened at the same rate, so you don’t see a lot of difference there,” Ciruli said. “It’s 12 to 1, as opposed to 14 to 1 last year.”
Peru and Ecuador are traded in U.S. dollars, which helps calm the trade scenario, said Gary Clevenger, managing member of Freska Produce International LLC, Oxnard, Calif.
“I think in all the regions that harvest mangoes, Brazil has the most exchange issues from year to year,” he said. “I think two years ago that, coupled with increased freight charges and things like that, created a little less profit back in Brazil.”