How does it make sense that eg grapes from India get imported to Denmark and then get sold here for 2€? How does that economically pay off? For all the different stakeholders involved?

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How does it make sense that eg grapes from India get imported to Denmark and then get sold here for 2€? How does that economically pay off? For all the different stakeholders involved?

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4 Answers

Anonymous 0 Comments

Every produce has their own structure.

Grape vines, in particular, are very long lived (some live up to 100 years) and produce for a long time (30+ years). So a lot of the costs on the farm are already fixed (land, vines, etc). The biggest variable costs will be fertilizer and labor. Typically farm labor costs are low and are likely to be particularly low in India (very likely less than 10 Euro per DAY)

Barring bad weather, grape vines will just continue to produce, therefore supply can be inelastic and the farmer just sells it for what they can.

Freight costs are the next biggest thing, then the retailer markups. Neither are very high when negotiated over longer terms. Air flown will be much more expensive but on ships, the rates are probably a few hundred Euro per ton which works out to fractions of a Euro per kg.

Anonymous 0 Comments

Because global shipping has been made extremely effective over the last 200 years. It’s very cheap to send a ship from India to Denmark, and the effective cost gets lower the more goods you load onto the boat. Ships don’t transport grapes one at a time, they transport them in groups of tens of thousands of tons.

Anonymous 0 Comments

Transportation is incredibly cheap now. People have no idea of the masses of stuff being moved. I highly recommend spending a few hours watching ships go through the Panama canal locks to really drive this home. It’s literal mountains of freight containers going by, one after another after another…

Anonymous 0 Comments

Grapes are very labor intensive to grow. They’re one of the more labor The cost of shipping is low compared to the cumulative labor cost of growing them. They require careful pruning, and generally need to be picked by hand. Different clusters ripen at different times so need to be picked several different times during harvest. Table grapes also need to be handled carefully. (You don’t care that much if wine grapes are bruised or split.) Denmark also doesn’t have a good climate for growing grapes which like sunny and hot weather and basic, well drained soil. They prefer to grow on hillsides and slopes.

One advantage of grapes is their skins contain tannins, polyphenolic compounds, stilbines, and flavanoids. These cause grapes to be relatively resistant to fungi and bacteria that cause rot. (Also causes them you be bitter and astringent.) This is the case with most fruits, though. They are typically shipped in refrigerated containers. When refrigerated they can stay fresh for up to a month or more. Shipping items by containers is very cheap and is energy efficient.