CatZinfo – Dried Fruits & Walnuts

Demand for spot material or at least arriving soon is making the markets in general very active. A number of markets were supposed to go down, but disappointing crops, delayed crops and currency issues changed this scenario. Now economies are strengthening again, there is optimism demand will be strong. Consequently goods are needed certainly for the seasonal sales in Europe and Northern America at the end of the year, as well as for the festival period in Asia early next year.

The dollar seemed to gain some strength against the euro last week, but in the last days lost some ground again (between 1,175 and 1,18), which for European import was good news. The Turkish Lira continues to weaken against the dollar, which is favourable for the dried fruit buyers as it compensates the firmer prices on the local markets.

 

Dried Fruits

Apricots
The story is known: though there was a massive crop in Turkey, there are a lot of ‘ifs’ and ‘buts’. The big crop is consisting mainly of smaller fruits, a natural ‘law’ we see with most tree crops. On top weather circumstances caused a lot of blemished and spotted fruits. There for we see prices firming with premiums for bigger sizes and good qualities, which is partly offset by the weaker Turkish Lira. For the rest of the season we may see some triggers for a firmer market: the expectation of a good crop made farmers sulpher heavily in anticipation of lower prices. In this way the shelf life of the apricot can be extended and farmers can ‘play’ with the quantities when to bring them on the market. So certainly for the European market finding suitable material (max 2000ppm SO²) will become a challenge. Also for the Ramadan buying still has to take place and will have an upward influence on pricing. Though very speculative and just a thought: after a big crop usually a smaller crop follows….(but also here we have seen exceptions to break the rule).

Apples
The Chinese new crop is on its way. We may however see some disruption in the shipments as the Chinese government is closing down numerous industries in their battle against the environmental pollution. Especially drying facilities have a lot of gas emissions and are either closed or have to take costly precautions to stay with the allowed emission levels. Another element is the inactivity of the apple juice market, which gives less confidence to the farmers to enlarge their apple orchard; on the contrary they are pulling out trees in favour of crops with better opportunities (they hope). Chilean apples are becoming more and more an exclusive product on the European markets. High priced they could not compete with the cheaper Chinese supply. This may change again in the coming years and we may see a revival of Chilean product on the European market within the coming years.

Banana chips
Prices for bananachips remain firm with still delays in the shipments. Shippers are reluctantly offering and we do not foresee an improvement in the coming 6 months. One of the reasons is the festival period ahead in Asia and supply remains restricted due to natural elements such as the numerous typhoons we have seen this year in the Philippines.

Cranberries
Both the American and Canadian crop are down by about 20% on average. This will certainly mean a reverse direction for the prices, which are firming already somewhat. On top there is still the discussion of the Marketing Order with the USDA, which may cause an additional restriction of the quantity brought on the market by another 10 to 15%. These 2 elements together may certainly firm the market, though there is still some oversupply to be moved. Nevertheless we think it can do no harm to abolish the ‘hand-to-mouth’ buying and replace for covering for the coming months. Simply the returns for growers below cost price will take care less fruit is anyhow coming on the market in the coming years. Added to the enacting of the Marketing Order we will see a fundamental change in this market.

Currants
In spite of the higher prices in Greece, sales are exceeding the supply and shippers see no need to need to reduce prices. On the contrary, we only see firmer levels on offer.
Relief from South-Africa will only be on the market April/May 2018.

Pineapple/Papaya
Unchanged situation for the various tropical fruits from Thailand. Bottleneck still the shipments running behind schedule and consequently stocks in Europe at low levels as well.

Prunes
The prune market is in an ‘in-between stadium’: the Chilean are selling out their last loads and everybody is waiting for the outlooks of the 2018 crop, starting in the first months of the next year. Prices remain practically unchanged.

California is having a bigger crop, but still cannot compete on the European market with the Chilean price levels (and on top an almost 10% import duty for the Californian product.

Raisins
The market for the Thompson raisins is certainly on the move. After the news was digested the Californian crop was rather disappointing with an output we have not seen that low since the last 10 years, prices exploded and most packers drawn back with offers. Indicated prices were up to 50% over the previous level still paid this summer.

South-African farmers also reading the newspaper, increased their prices, but still being more competitive in pricing were sold overnight. For the coming crop it is looking good and a crop of 60/70K is expected – but much can happen till the crop is safely in. Also quantity wise the SA crop is 20% of a normal Californian crop. One thing to bear in mind is the fact current high prices for natural Thompsons may let the SA farmers opt for less goldens, as this is more risky and the premium is relatively low in this setting.

 

Nuts

Walnuts
The crop harvested and brought in per Nov 1st in California was about 570K tons, which according to the common opinion may end in total to 600/620K at the max. After the initial expectations of even 700K this is rather disappointing and we have seen prices jump after this went to reality. Shipments were down, but this is easily explained by the fact the crop was late, so shipments in October simply could not be strong. The lower crop certainly will make the market firm. However there are also here some elements which may soften the increase. China is having a good crop and is buying half of what it used to do. Same applies for another important market: Turkey. They buy as well considerably less and in view of their week currency we doubt they will catch up later this year.

The quality is very good this year: meaning enough light material. The other side is cheaper (but darker) material is getting scarce and we will see price levels between the dark and light product to become narrow, i.e. relatively expensive prices for dark material.

Chile is well sold on hand cracked light and extra light material. With at least half a year to go till new crop, we may see some scarcity in the coming months for this high end material.