CATZINFO – DRIED FRUITS & WALNUTS

The activities slowed down somewhat now holidays have started all over Europe. We fear this year most of you had to abstain from exotic trips or flights to sunny beaches.
Unfortunately the COVID-pandemic is far from beaten; on the contrary in some parts of the world it is worse than ever.
For sure it will also touch he agricultural business of which we are part. In what way and how serious are still unchartered waters.
The harvesting of the new crops on the Northern Hemisphere is in full progress. First careful predictions can be made indicating which way we will be heading.
The Euro gained some strength against the US-dollar, which made some calculations somewhat more ‘friendly’.


Dried Fruits

Apples
We are in between the last shipments and waiting for the new crop for Chinese dried apples.
So far the first indications for the new crop (Sep/Oct 2020) are a continuation of the levels of last season.
The weather however may spoil this or demand from the ‘fresh’ markets (for better and for worse).
For spot material there is some lack of good material and for certain varieties a premium has to be paid for short term deliveries.

Apricots
The apricot market can be called rather firm at the moment.
The crop is not as good as thought initially by both the industry as by the Ministry of Agriculture.  On average fruits are bigger, so small fruits, being scarce, will not discount too much.
On top the government has decided to support the farmers and has instructed to set a minimum price for the farmers.
This is done by TMO, which is rather comfortable for the farmers, who can ‘sit’ on their stocks and keep supply to the market tight.
As a result the market firmed considerably by over 20%.
The good news is the weaker Turkish Lira against the US-dollar and certainly against the Euro, which softens somewhat the increase of the price in Euro..

Banana chips
In the South of the Philippines the lockdowns are more relaxed than in the Manilla metropole, which has been placed under a more strict lockdown since August 4th.
Nevertheless all over the logistic infrastructure has been disrupted both for workers to travel to the factories as the shipping schedules, which are less frequent touching Philippine ports.
There is still a backlog in production and with traditional demand picking up in autumn and winter, we do not foresee a downside in this market.
On the contrary: certainly for spot material we may see some hick-ups in the remainder of this year 2020 and first part of 2021.
Broken banana chips and organic are even more difficult to find.

Currants
With still at least a month to go before the first new crop consignments will arrive at the processors: so far so good.
There has been some minor damage in the Greek orchards due to some rains. The Greek Gulf-currants have suffered the most, with close to 20% damage, but all others are okay.
Also the coming weeks the damaged trees bearing less fruits, may get bigger fruits on the remaining branches and make up for a higher total.
We expect prices in the coming weeks.

Pineapple/Papaya/Mango
Until now the number of infections in Thailand is remarkably low with only 58 deadly victims reported in a population close to 70 million people.
Most canned pineapple factories have been closed for their yearly maintenance. As the result, the quantity of raw materials is less than 50%, compared to the previous months.
The new (winter) crop is expected to be harvested end Oct./ early Nov and some improvement is expected compared to last winter crop.
This is due to good rainfall in this current rainy season and the increase in plantation resulted from mid of last year due to the higher prices.
We expect a slight improvement in supply gradually during this winter. However this will take at least till Q2/21 till we may get back to quantities to fill the pipeline again.
For papaya we are now entering into the off-season. There is some shortage for unripe papaya for consumption reported
This means the supply is expected to be less also for the natural ripe papaya in this winter crop.
Due to less pineapple available a significant number of farmers has quitted cultivation of papaya and there might be a big drop in supply in this coming winter for papaya.
Due to the earlier harvesting period of mango in the last summer crop, it is expected harvesting of mango in this winter may come also earlier.
We expect that the fresh supply would be available around Sep onwards this year.

Prunes
The Chilean prune exporters do not have to push for sales, except for the real big sizes.
Of course they are confronted with the lockdowns and disruption of their production and the shipments.
Also the documentation is frequently arriving later than the ship, as the Health Authorities in Chile (SAG) are rather bureaucratic and due to COVID severely understaffed.
Prices are gradually firming as more and more small fruits are sold and 60/70 are getting ‘the new smalls’. Small e-pitted prunes are obviously as well completely sold in Chile.

Raisins
In Turkey the harvest is about to start and first arrivals (of full developed grapes!) at the Boursa are expected end of August.
The estimations we do receive from our various sources are between 290K and 320K (the last being same as last year).
With an expected carry out of 30K there will be sufficient sultanas. Offers are so far scarce, also because of the recent religious holidays till Monday Aug 3rd.
The Turkish exporters will have to compete with the Thompson raisins, mainly from South-Africa and California.
Though a different type of raisin, there is always a natural distance between both varieties, as to a certain extent these can be substituted by each other.
South-Arica had to move still some oversupply of the crop 2019, but with an aggressive pricing they meanwhile moved this quantity and are even getting well sold in the ’20-crop.
California was and still is the most expensive seller for Thompsons, but with good sales on their domestic market, they now are lifting their prices.
Same as we see from SA, where exporters are getting somewhat more optimistic they can move this year’s crop of Thompsons.
The prices for South-African goldens are stable, except for the jumbo sizes which are virtually sold.
Chilean raisins are well available, but also here except for the golden jumbo, which are getting tight in supply.


Nuts

Walnuts
After the positive June shipment figures (+15%), the Californian walnut industry had hoped for a lower first estimation by the CASS, but with the announcement of +11% (723K short tons) compared to the crop 2019 this was in vain.
Actually it was expected the new crop would be better since we passed bloom and hence prices came down since that time. At the moment we are at low levels, which we have not seen for over 10(!) years.
We do have some other arguments to think about some covering:

  • The carry out will be less than last year’s (60K vs 80K);
  • The dollar is weak against the euro, which makes prices for walnuts attractive, so according to economic laws consumption should increase
  • Buyers have waited since prices came down since this spring, so we expect some additional demand in the coming weeks to bridge the gap to the arrival of the new crop in Europe in November (4 months to go).
  • Though a gut-feeling: Californians have been able more than once to turn record crops into increasing prices……

There for we expect prices may rebound in the coming weeks and a partial covering might be justified as downward space on pricing will be minimal at current levels (which is at par with cost price!).
The Chilean crop of about 130K tons is said to be sold for more than 50%. This is slightly less than usual at this stage, but some attractive pricing for the machine cracked and lower end qualities is helping sales.
The top qualities, like hand cracked extra light 90% halves did actually hardly give in on pricing, as demand is stable so no reason to discount on these.
The crops in Eastern Europe (of which Ukraine and Moldova are the biggest, but have hardly any impact on the world market) will be again somewhat smaller this year.