Business is getting back to normal and is already rather active.
We see a substantial demand for spot deliveries and of course there are some developments with regard to the new crops from the Southern Hemisphere. There are hardly product lines which are bearish at the moment.
The reason is mainly strong demand for most products, which cannot be compensated by larger crops in general.
Also external factors are driving the markets: the Trump administration is still aggressively defending the national interests, but as a consequence their export markets have imposed tariffs as well.
More tangible effects are caused by the shutdown, meanwhile lasting over 4 weeks and causing problems at border exit controls.
On the long run investments in agricultural projects backed by governmental loans, cannot bereleased at the moment and may bring farmers in trouble, which may have consequences for the next crops.
Another issue is the Brexit. Nobody knows how this will end, but no doubt it will change some buying patterns and exchange rates of some currencies.
With the rate of the Turkish Lira still rather volatile, pricing of the apricots is also rather ‘flexible’ at the moment.
For sure we have left the lower levels we saw at the beginning of the season. Good quality fruit and big sizes are scarce.
We saw a more than usual gap between medium sizes and large sizes, which is now narrowed by increasing prices for the smaller sizes due to an active demand.
Farmers are reluctant to bring too much material on the market as the expect better prices later on.
Quantity wise it may become tight for the available quantities to satisfy demand in this pace.
We think it is a safe policy to have a look at your needs till the summer period as we see only indication for some higher prices.
Meanwhile prices have firmed further. Late shipments have caused an empty market in Europe with lack of all types of apple products.
As delayed shipments due to the small crop and governmental restrictions for the factories are still actual, we do not expect any improvement during the rest of this season.
It may well be that a more expensive origin like Chile may find its place back in a market, which they lost in the last years.
A smaller supply of green bananas in combination with a vivid demand has caused a rising tendency for the prices of the Philippine bananachips. Shipments are still slow as most factories are fully booked.
The market has structurally reached a higher level.
This has been reached partly by some artificial measurements like holding back quantities from the market.
If indeed next crop the crop will be reduced again, the higher prices might be sustainable and give some ‘air’ to the industries, which had to cope with loss causing prices for some years.
The smaller Greek crop has obviously brought the prices at a higher level.
Some shippers have not offered at all for export and at the moment offers are hard to find.
The crop from South Africa will be more or less same as last year’s, though the berry count will be somewhat lower after last year’s average well over 1000 per 100g.
However with just over 3000 tons this will not fundamentally change the currant market.
It may be expected the opening prices for South-African currants will follow the higher levels from Greece.
Some problems already with the papaya, which is in short supply and shipment for pending orders are delayed. Prices firming.
For pineapple the situation is unchanged.
The crop in Chile is looking good.
The first indications point at a continuation of last year’s levels, so for time being we do not expect too many surprises. An element which may cause some firming, is the growing demand from China for fresh plums.
However this is mainly for the bigger sizes, so this will not influence much the medium sizes.
The Turkish exporters have shipped meanwhile a decent amount of sultanas (120K).
It made them confident to maintain the higher price levels, which are at least a 20/25% above the opening prices in summer.
If shipments continue in the same way, it is expected we will have some tight transition period in July and August.
Perhaps at these higher levels there will be some competition from other origins, but if we look at Iran, usually the main competitor for sultanas, this country is tied by all kind of bans and is hardly capable to ship to Western markets.
From the Southern Hemisphere basically the news about the crops is good.
Chile will have a good crop, but somewhat less jumbo sizes and consequently prices firmed somewhat compared to the opening prices.
South Africa will have also a somewhat bigger crop. An increase will be especially in the natural Thompsons and a decrease in the goldens.
Reason being the high price levels worldwide for Thompsons, which made farmers to decide to go more for Thompsons, rather than for the more risky and labour intensive goldens. Interesting will be what distance the South Africans will keep towards the Californian prices.
California is selling slowly but steady and prices remain high.
After a remarkable calm period in the last 2 months of 2018, in which shipments however for Californian walnuts were strong, the market resumed at higher levels since the start of the new year.
Shippers have sold well and are already indicating to be sold in certain grades.
Especially in shell walnuts were in demand and prices increased by over 10% meanwhile.
A similar development we see at the moment for the higher end qualities shelled material (Chandler 80% light halves and the light pieces f.e.) which are getting less available.
On the other hand with shipments being similar to last year (YTD), we must not forget Asian markets are down considerably due to the tariffs for American product. If Mr. Trump in all his wisdom decides to remove the tariffs on Asian (read Chinese) product, in turn lifting duties on Californian agricultural products may bring back China as an important buyer. No need to explain in that case the reaction of the Californian industry…… Nevertheless the fact remains: prices are firming and it will not be the first time the Californian marketing machine is very efficient and capable to raise the prices without having a shortage.
Chile has sold out and only some left overs are available. It is too early to speak about prices for the new season, however we do expect they will have to come down to meet the Californian levels and most and for all to move another record crop.