Date With Destiny : Agribusiness: California growers hope to seize the moment and take some of the market from Iraq, the world’s largest producer, while the embargo ties up its exports.
As the tension in the Middle East stretches on with little hope of a quick fix, California date growers are finding opportunity in the international embargo on products from Iraq, the world’s leading date exporter.
Since the Aug. 2 invasion of Kuwait--and the subsequent embargo on Iraqi products--Iraq is sitting on tons of dates, a desert staple that has flourished in the Middle East since 50,000 BC.
Companies in nations honoring the embargo are beginning to worry that the future could be sticky for their baked goods, granolas and quick-bread mixes, in which dates are a key ingredient. And the U.S. date industry--which is just entering its three-month harvest season--has found expanded opportunities to pick up the slack.
“We’ve received inquiries from people originally buying dates from Iraq,” said Greg Hill, marketing director for California Redi-Date in Thermal. “We look to sell more to Asia. For example, Moslems in Singapore love dates. With the embargo, they’ll have a hard time getting them.”
California Redi-Date has seen its exports double in 1990, Hill said, in part because of the dollar’s weakness against many European currencies. Other factors include “the cutoff of supply from Iraq and the reluctance of many carriers to go into the Middle East at all,” he said.
California produces 99% of America’s dates, a specialty crop with a wholesale value of $60.3 million in 1989, said Frank Limacher, agricultural economist for the California Department of Food and Agriculture. About 86% come from Riverside County, the rest from Imperial County.
In 1987, the most recent year for which statistics were available, Iraq had the lion’s share of world exports, shipping 80,000 metric tons, or 41% of the market. California shipped 4,110 metric tons that year, a scant 2%.
Hill said California growers stand to pick up orders from countries such as England, France and Australia--all large date users and nations that are honoring the international embargo on Iraq. Large exporters such as Pakistan could also benefit.
Danger in the Middle East, said Anne Ezell, manager of the California Date Administrative Committee in Indio, is giving date growers here something akin to an economic safety net in a time of economic downturn.
“In our case, since Iraq was a big date exporter, the recent conflicts over there create opportunities for us,” Ezell said. “We’re beginning to see manufacturers make inquiries into our dates. . . . But we have a promotion program geared toward consumers . . . and we’re not going to drop our efforts in the consumer markets.”
In addition to assuaging the rumbles of recession, a brisker date market could help make up for some of the Kuwaiti business lost to American agriculture. Although the loss is there, it’s hard to quantify, said Frank Limacher, agricultural economist for the California Department of Food and Agriculture.
“We’re losing a market for a lot of our miscellaneous products in Kuwait,” Limacher said. “It’s like losing San Jose. They buy a little bit of everything, and it’s all air-freighted. It was about $14 million a year in orders like $25,000 to $35,000 worth of, say, sweet cherries or nectarines.”
Les Vaccarello of Desert Valley Date in Coachella said his company began to see an increase in inquiries from food processors around the middle of August, because it took several weeks for the supply of dates in the world pipeline to shrink.
“Any disruption in a supply channel should create an increase in demand in other producing countries,” Vaccarello said. “We’re starting to see that. . . . There’s an awful lot of activity. You’ve got people with major commitments out there, and a continuous source of supply is very important to them. If they see a disruption, they’ll react.”
John Keck, president of Alamo Ranch Co. in Indio, believes that it is still too early to tell what effect the embargo will have on California date growers. He points out that the eight-year Iran-Iraq war dramatically curtailed date shipments from the region, “but it did not have a great deal of effect on the world market.”
At that time, Keck said, Pakistan picked up most of the slack. But there is a chance that California could cash in this time.
“We are noticing more inquiries from abroad,” Keck said. “We get three to four inquiries a week from countries in Europe and the Pacific Rim. . . . It seems like there are many more inquiries than normal. We’re not sure whether it will materialize. It’s still in the inquiries stage.”
