CatZinfo Dried Fruits & Nuts
In spite of the fact more and more people away from the office for their yearly summer break, we cannot but conclude there are still a lot of activities going on. Especially demand on the spot to bridge the arrivals of the new crops from the Northern Hemisphere. However there comes the disappointment as the left-overs from the current crops are less than expected. Apricots, raisins, sultanas and walnuts are typically short in supply on the spot and sold at higher than anticipated levels (certainly in expectation of good coming crops). The dollar is slowly losing some ground against the euro and has touched the 1,16 even for the euro this week.
The crop continues to develop well, with actually three elements which could disturb a ‘party’ with historic low prices:
– the carry out of the current crop is less than expected. Total exports at the end of July are expected to be 85K, against 69K last season. Prices for current crop are firming the market and farmers and traders in Turkey do not yet want to sell too cheap in view of this. They believe first shipments will be in demand, so they can make better prices,
– a big crop means on average smaller fruits, so no.1 and 2 will be relatively scarce and will have a bigger price gap with smaller sizes.
– rain- and hail damage will be at least 20%. So we may see some discrepancy in prices from serious shippers and those who cannot stand the seduction of ‘mixing’. Also we may not forget the currency developments, with still a weak Turkish Lira, which is not yet strong enough to go below the US$/YTL threshold of 3,50 at the moment. For sure the lower prices in general for new crop at the moment will enable the Turkish industry to move a bigger quantity than last year. Question will be how desperate the farmers will be to sell out early in anticipation of even lower prices with this big crop, or can they hold product off the market to drive up prices?
Apples China almost sold out and shortage on the European market is obvious. Spot material is doing a premium as new crop will only be expected in October. It is too early to predict price levels, but as usual the Chinese will start to tell there will be a shortage.
The unexpected change in the prices for bananachips has put most buyers on the wrong foot. Down going prices up to 2 months ago made buyers to take a ‘wait-and-see’ attitude and buying just hand-to-mouth. The sudden increase in price and slow shipments from the Philippines have caused a serious shortage on the markets with limited quantities on offer. Already now higher prices are quoted for shipments after the summer and for ‘brokens’ it is almost impossible to find a seller in origin. We foresee a firm market at least till end of the year.
South-Africa is definitely sold now last quantities have been booked easily at prices below current levels from Greece. Greece itself I sold as well with the exception of an odd load, so whatever the outcome of the new crop will be, it will arrive in an empty market.
Prices for most tropical products are steady. Main problem is the slow fulfillment of the contract, leaving the spot market in Europe at rather low stock levels. Supply problems on mango, ginger and coconut with firmer prices for these items.
Continuing firming of prices, certainly for the bigger sizes, now Chile is gradually selling out. The market realizes next crop will be only available in April 2018, which means still 7 or 8 months to go. We expect towards the end of the year some shortages and obviously firmer prices. There is not much to say about the new crop in Chile/Argentina. The acreage most probably will be larger, but if due to weather circumstances the crop will be disappointing and markets in overseas areas for sure will be empty, no need to ‘paint’ the situation.
Raisins Last containers from South-Africa are available, which is quite early in the season. Certainly with again an earlier Ramadan, where first and fast shipment of the crop 2018 may be just in time, will put exactly some pressure on these first sailings at premium prices. Of course also seasonal demand for Christmas and buyers in markets with higher demand for Ramadam will also cover still some 2017 product to be on the safe side.
California is expecting a firmer pricing now the result of pulling out almost 1/3rd of the vineyards in favour of re plantings with nuts is noticeable. With a steady 300K sales the new crop with 200K and carryout less than 100K, will not match demand. For the year after – in view of lower acreage – for sure supply cannot match demand. All in all we foresee a structural firming of prices (like we have seen with Californian prunes when tree pulling started in favour of nut orchards).
In Turkey stocks are in the hands of strong parties and prices gradually increasing. The new crop estimation is about 300K tons, which is less than last year. Shipments YTD are 60K tons more compared with last year, so the Turkish industry is getting more confident they can move coming crop and not necessarily at discounted prices.
Chile unchanged: jumbo goldens sold, all other varieties still available.
Walnuts California has shipped less in June but overall this year was 16% up. Current inventories are low and firm un pricing, if anything left. The new crop is looking good sofar. However actual high temperatures may cause higher percentage of sunburn. Also the crop will be one or two weeks later, so there will be substantial demand for the first shipments. Moreover: same as some other crops: the new crop will arrive in an empty market!
Chile has sold well and first lots have arrived in Europe. Handcracked light material is little scarce, but other grades are still well available. With the firming prices in California, the Chilean exporters see no need to lower their prices.