CatZinfo – Dried Fruits & Walnuts
Finally some markets started to move. For apricots the actual yield of the crop is rather disappointing; for walnuts the objective estimate was lower than expected; for Californian raisins the crop will be way much less than usual. We expect the coming weeks certainly more activity. First because buyers were holding back as crop forecasts were initially positive, so waiting seemed to be the best option. Secondly simply in view of the time as being in mid-September, the Christmas bells still being noiseless will soon start to ring.
Another element playing a role is the weaker dollar (or firmer euro). Also the Turkish Lira is changing rapidly and increased by about 5% against the dollar.
It becomes more and more clear the crop is seriously damaged. The figure of 150.000 tons is still correct, but almost 30.000 mtons seems to be lost and not dried because too much damaged fruits or for the juice production. The figure of 60% is mostly heard as the percentage of the fruit being blemished, spotted or speckled. Taking into account a 25% used for unsulphered and organic, this leaves about 90.000 tons for sulphered, of which 60% damaged, so you can make the math’s. Now the religious holidays are over the market started to firm once everybody is realizing the 150.000 tons estimated as crop is a figure with a story. We will see a widespread pricing, which all has to do with sizing and quality. Sizes are on average small, so not the #4 will be the average but the #6, with several hundred dollars of difference between the sizes. On top real good quality will have to be paid for. More than ever it will be important to buy from reliable sellers which take their responsibility for the quality as well, as for sure the ‘cowboys’ see chances this year. Cheap buying may this time not be the most clever option…..
Apples Prices for the Chinese new crop are stable. Shippers base themselves on the fresh fruits and do not yet have to store or buy from the cold stores. First shipments are expected in October.
The supply situation for Philippine bananachips remains difficult. Both in origin the processors cannot find enough green bananas to have a production on full capacity. This is becoming more and more clear also in our market as stock are limited. Prices in euro’s more or less stable but only reason is the weaker dollar against the euro. Broken bananachips are only offered on limited scale and finding a full load is impossible,
In spite of all kind of ‘artificial’ marketing operations by limiting supply, there is not yet seen an upward trend in this market. Oversupply is still structural and it may take another year before we really see something changing. However it will be a matter of time as too many stakeholder are losing money at current market levels, which cannot last forever,
As expected opening prices from Greece are substantially higher than last year’s prices. The crop seems to be okay, but shippers know the market is rather empty with the heavy consumption in the coming months ahead. South Africa is completely sold apart from some second hand offers.
The new crops in Thailand of papaya and pineapple are around the corner and will bring perhaps somewhat more product on the market. Factories have fought against production deadlines as not enough product available to run the factories on an economic speed. Mango and coconut are getting scarce.
Supply is drying up, though most Chilean shippers do have some ‘last’ containers, which is the usual marketing strategy in Chile. Reality however is, some of the popular sizes like 40/50 and 60/70 are running scarce. California is still heading for a good crop, but we doubt they will play an important factor on the European market. They are ‘spoiled’ with the high prices of the last years and will certainly on the short term not be prepared to discount to regain the European market.
Raisins The prices for Californian Thompson raisins have firmed all over the place and on average firmed on average by a 20%. Buyers understand the smaller crop in California will lead to higher levels and starting to buy.
As a consequence the South African shippers – at least those who still have some – have raised their prices as well, but still being more competitive. On goldens prices remain stable. Though there is not an ‘official’ Turkish estimation this year, common figure is 300.000 mtons and drying conditions are favourable. The quality will be good (so far) and after the holidays the market opened a little lower. Question will be in what way the firmer Thompson prices will push the sultana prices up as well. As Iran is also offering new crop at the Turkish levels we may see for time being the sultana market on a substantial lower level than the Thompsons.
The Californian objective estimation was taking most people by surprise. 5% down against last year’s crop and 7% lower than the subjective estimation. No one has to teach the Californian exporters how to ‘explain’ these figures. First reaction of most shippers was to withdraw from the market and see after this weekend how the market would react. Fact is most buyers have waited as the ‘subjective’ was higher than last year’s crop, which would mean a ‘growing’ supply. (No one has to teach buyers how such figure has to be interpreted.)
With an empty pipeline the buyers will have to step in and can – in view of time – not wait too long. As most shippers are already booked for the October and partly November shipments, this will certainly firm the market.
Another uncertain factor will be the real outcome of the nuts. Harvest is about to start and if a bigger percentage of the walnuts has been damaged by sunburn, no need to explain what will happen with prices for light material.
Last but not least demand from Europe will remain good as the weak dollar compensates somewhat the higher prices instead of diminishing demand and bringing the market in balance.
Chile is virtually sold on hand cracked material and last quantities changing hands. With still 9 to 10 months to go till the crop 2018 will enter the European market, we foresee here as well a bullish scenario.