CatzInfo – Dried Fruits & Walnuts
It is safe to say most of our readers visited – if not exhibiting at – Paris last week as we met many of them at SIAL. Though most meetings were short, all together it gave some indications about markets and their developments as well as some impressions on trends in the world of food. In the meantime the crops on the Northern Hemisphere are in and we expect in the next weeks certainly more activities as most buyers have been cautious in view of many external factors as well. The continuous aggressive behavior of Mr. Trump, imposing all kind of tariffs, which challenges also import tariffs from the importing countries is raising questions like: what will happen with the substantial quantities of Californian almonds and walnuts China (Asia) was buying? Were these emerging economies not the trigger which allowed prices to rise continuously along with increasing crops? How will the relation between Turkey (a big walnut buyer) and USA develop? Also some good crops made buyers wait before stepping in, but time flies and Christmas is there in 10 weeks. So some action is required. In spite of all the political turmoil, the dollar and euro stayed in a pretty narrow margin in the last weeks.
The market for Turkish apricot is still difficult to describe. Good material is becoming less available and therefore we see some discrepancies in pricing between the various exporters. In addition the Turkish Lira gained some ground against the dollar, so in general prices firmed somewhat. Quantity wise we do not foresee a shortage this season. At current price levels the Turkish industry will be able to move this crop before the end of the season with a manageable carry-over. In that case for sure towards the end prices will be lifted if exporters are in a comfortable cash flow position. If however the Turkish Lira will strengthen and export prices will increase, demand may go down and we may see some discounted prices at the end.
The Chinese apple products will become a headache this season. As reported before, the crop is almost halved and many factories are not allowed to produce in an attempt of the Chinese government to slow down pollution. Meanwhile prices have increase already considerably and actually we see daily increasing prices due to the limited supply. On top there is a delay in shipments. Not only first shipments will leave only in November also further shipments will be in delay as the limited factories which are allowed to produce are fully booked. We certainly will also see some ‘renegotiations’ with Chinese shippers, which is unfortunately still a common practice in some areas when markets firm too fast. Having a reliable contract partner will this year be more important than buying cheap.
Supply of green bananas for the bananachips is getting tighter. This is partly caused by the fact food is becoming expensive in the Philippines and bananas are relatively cheap, so part of the population is eating more fresh bananas. We expect prices to firm in the coming months, also in view of the traditional festivals on the Asian continent.
The harvest is a little later than usual, so not yet completed. There are some uncertainties about the crop in Massachusetts and Wisconsin and also possible tariffs (a.o. about the suspension in Europe). The crop will again not be as abundant like a few years ago, so prices will be structurally firmer and cranberries for time being will not be a relatively ‘cheap’ product.
The crop of the Greek currants is rather disappointing. Also at SIAL we spoke many suppliers, but most of them are not willing to offer as either they are sold already or first wish to see what really will come out of the production. Prices obviously have risen, where we also may remark the Greek industry is fully aware the currants are popular in the coming months. So to keep the market tight is a well-known strategy. If the situation is as worse as we should believe, prices will remain firm. In addition an alternative like small/midget Thompsons are also not for sale at the moment!
The crops for pineapple and papaya are well and we may see some softening of the prices. However this will be for shipments later on and for product needed before the end of the year on the spot in Europe the market will remain tight. Shipments from the new crop simply will not arrive in Europe in time.
In Chile the medium size are still available, but especially the larger sizes are getting scarce and more and more premium has to be paid. The risk of frost is over and so far the development of the new crop 2019 is good. California is heading for a good crop as well, however pricing will not be competitive for Europe (and on top 9,6% import duty).
Partly because of the stronger Lira and partly because of a somewhat smaller crop than expected, prices of Turkish sultanas have firmed. We may see a further increase as if we project export in the previous years on this crop of 260K tons, the maths will end at 0 carry out. So some price increase is needed to have a smooth transition into the 2019 season. Also the fact somewhat more Thompsons have been produced – so less sultanas – is an element to expect some higher prices. This in turn is also facilitated by the higher prices for Thompsons from California at this moment. Though too early to be exact on the South African crop, so far so good and a larger crop is expected. However in view of price levels in California, nevertheless they will most probably open higher for their Thompsons. Another issue is the choice farmers will make to produce the less risky Thompsons, now they get a good price or still go for the goldens, though premium for this type will obviously be less. Iran has more or less lost it market share at least in Europe due to the ban on trading in dollars and shipping companies not willing to take Iranian cargo on board, being afraid of American sanctions. Chile is selling out their ‘last’ containers of the jumbo varieties.
The weakening of the prices for Californian walnuts has come to a standstill. Meanwhile we see even somewhat firmer pricing, now demand is picking up at the current attractive pricing. In shell Hartleys are becoming scarce already and prices have firmed. The industry is anxious to see how the Chinese and Turkish buyers will behave. They usually buy a lot of inshell to crack for domestic consumption and re-export. The current tariffs may be a threshold to abstain from buying in California and these quantities must hence then be sold elsewhere .However at the moment the Californian industry is confident to move this season’s crop anyhow. Chile is almost sold with their higher end products like handcracked and extra light varieties. Though they had to follow the worldwide down going trend triggered by the Californian prices, in view of the time to go till new crop and the Ramadan demand to be supplied from this crop as well, we may still see some firming early 2019.