CatZinfo dried fruits and walnuts
With a disruption due to the holiday period, we are back to inform you as usual in our bi-weekly CatZinfo about the headlines in our field of business. It cannot be denied the tensions all over the world, make part of the traders nervous to engage long term contracts. Currencies are rather volatile with actually one exception: the US$ against the Euro, though gradually the green back is gaining some strength and reaching its strongest point since the last two years. This obviously makes for European buyers, final prices in Euros anyhow somewhat higher, independently from market movements. The dried fruit crops on the Northern Hemisphere are almost done, though some drying still takes place. In California the nut crops have begun or are about to begin. As such the general crop sizes are known, though there are some discrepancies between the various sources (farmers, shippers and authorities sometimes may differ in their assessments).
If we do some very rough mathematics: crop 2019 is (estimated) 100K and exports last year also 100K. So if same export demand there will be a shortage, if we also deduct from the crop bad qualities and domestic consumption. No need to tell traders what this will normally do to the prices….. The quality of he crop is very good with on average sizes mainly between 1 and 4. Natural and organic will be the headache this year as for various reasons are less available. Meanwhile prices have firmed since the opening prices came on the market and we may see a steady upward trend in the months to come.
The Chinese shippers have started to offer. Though as always difficult to assess the size of the crop as there are no “official” figures, based on the ‘gut feelings’ of the various shippers, we have the idea it is at least looking better than last year. For the first shipments they offer the Gala variety, which is usually less bright and not as uniform in colour as the later varieties like Qinguan and Fuji. First indications are a little lower than the last prices, but these were extremely firm due to the fact the market was running empty. This will take at least another 2 to 3 months before the first arrivals of the new crop will reach Europe. For spot material a premium shall still have to be paid. Banana chips
Prices for the Philippine bananachips remain firm. Problem remains especially the fully booked factories for the whole bananachips, with lead-times of more than three months, before shipment can take place. On top nowadays a transit time of 6 instead of 4 weeks does not help to fill the pipeline. Spot material is in high demand but hard to find Currants
Greece is heading for a bigger crop, which is estimated at 23K tons (against 15K last season). The market is empty and knowing South Africa will not be on the market earlier than spring 2020, and knowing currants are a “Christmas product”, it is not to be expected the Greek shippers will drop their prices for the first shipments, which will take place end of September. Covering till the end of the year may pay off, also from a logistic point of view to have product on the shelfs in December. South Africa is expecting again a ‘normal’ crop after last season’s disaster, but still half a year to go.
Pineapple and papaya on the spot are difficult to find. Since the season ended in May, shipments were very slow and stocks in Europe are close to exhausted, certainly for the most popular dices 8/10mm. For both products the season will start again in October, meaning first shipment will only arrive in December in Europe. For time being spot material is expensive, if at all obtainable. Prices for pineapple may remain more expensive for a longer period, as canning factories are also longing for the fresh pineapple to start production. Papaya may become somewhat faster at a lower price level, but this will be eventually only effected after early 2020 when the pipeline is filled again.
In spite of the summer period we notice a strong demand for the prunes. Chilean shippers are well sold and depending on the supplier may be sold either on the smaller sizes or bigger sizes already. Prices have a firm undertone, but with some quantities old levels still can be achieved. It looks however the Chileans will succeed to move this year’s crop without any problems.
The prices of natural Thompson both in California and South-Africa are tumbling down. In an attempt to move some volume, discounts are available. Buyers in a usual reflex are sitting back and waiting. As in both origins the farmers have negotiated at the beginning already their prices, this year the farmers are laughing, whereas the shippers are selling well below cost price at the moment. Though they try to convince the buyers this is not possible and cannot take much longer, the old saying is there: the market is always right. Supply of golden raisins will be the problem of the near future. In Europe Californian goldens are not accepted due to the high sulpher level and South Africa produced considerably less this season, due to the fact farmers opted for the well paid and less risky natural Thompsons at the beginning of the season. With next (earlier) Ramadan, for which the first intakes must come still out of this crop, we will certainly see a shortage in the coming half year. (New crop SA will at best be on the market in April/May!!). Turkish sultanas are somewhat stable. There is a good crop, though due to weather circumstances, smaller than expected. As also the Turkish Lira firmed somewhat – though last days very volatile – we saw prices slightly firm. Chile is well sold and for once indeed the Chilean stories about less availability of jumbo sizes came true.
The Californian walnut harvest is about to start and expected to be slightly more (+3%) than last season’s crop. Stocks in California are mainly lower quality shelled material, whereas the light high half counts are in short supply. Whereas usually at this time speculative offers are all over the market, most Californian shippers are holding back. Those offers around are slightly above recent levels for the crop 2018. However the market is dull both for current as new crop. We think both sides are anxious to see how the trade negotiations of Mr. Trump will end. China, India and Turkey are important buyers and if new tariffs will be imposed, European buyers may take advantage of this oversupply for Europe. If however “free trade” will be the outcome, the Californian shippers may be the lucky one, with renewed demand from these countries, so firmer prices will be the result. To bet on Mr. Trumps strategy seems however not to be advisable……. Chile is more or less sold with its light and extra light material, but here and there an odd load still can be found.