CATZINFO – DRIED FRUITS & WALNUTS
We can obviously not deny the COVID-19 problems on the Northern Hemisphere. New and stringent measurements have been taken, which are coming close to a lockdown in some countries.
For sure this will have a serious impact (again) on certain branches like the out-of-home markets, cultural events, airliners and tourism.
In what way this will affect the food sector and in particular the dried fruits and nuts markets is difficult to predict.
Anyhow people need food and our products deliver everything from basic food to luxury snacks, so (opportunistic as we are) we are in this sense optimistic.
Immediately we must admit never have experienced a pandemic, so we may encounter some surprises as well.
Also from a point of logistics we see a lot of delays and therefor it is important to work with parties being able to carry some buffer stocks to fulfill contracts.
For time being the trade is actually still very active, with ‘business as usual’ in the approach of the end-of-the-year season.
In spite of all events (pandemic, president’s election in the US, Brexit etc.) the rate of the Euro/US$ remains rather stable.
This cannot be said of the Turkish Lira, which is losing ground almost every day and almost touching the US$/TRY 8,– threshold.
The spot market is becoming rather difficult in terms of availability of dried apples.
The new crop from China will be shipped during this month, but also here we are faced with some logistic delays as shipment schedules are rather irregular these days.
The new crop seems to have some problems with fruit dropping from the trees.
Prices are stable to firm, but usually after the crop, when apples must be stored the prices will increase.
With the crop 25/30% less than last year, it needs no explanation prices have firmed.
However this is on the local market in Turkish Lira. This currency weakened since the beginning of the season in August by roughly 15% and partly compensated this rise.
Another factor is the buying of the TMO with prices above market level, giving the farmers the choice to wait, as they know they can sell any moment to TMO.
For time being there is a firm but stable market, but with a substantial smaller crop, prices may be inclined to rise in the second part of the season when supply cannot meet demand.
With highest prices since long time, the situation is still difficult. The higher prices have not yet adjusted the demand size, simply because the markets in USA and Europe are empty and every offer is taken up by the market. Lead time for new orders are at least 90 days, whereas multiple shippers are out of the market for time being.
Now also Asia is taking up quantities for the festival periods early 2021 and also the Ramadan period in April., we do not see an improvement – if at all – before Q3 2021.
Not only in pricing but most and for all to have product in your warehouse.
On top the Philippines still have serious lockdown measurement for time being, restricting workers to travel and disturb also the logistic systems.
Spot material is hard to get and prices have increased. We are afraid with the Seasonal Holidays upfront, we have not seen the end yet.
Now crops of papaya and pineapple are on their way, the Thai shippers are again willing to offer.
Prices slightly lower for forward shipment, but with the backlog in production still, we will not see much lower prices before the end of the year.
It will take at least a couple of months before the pipeline is filled again.
With again a smaller crop in California, there is not much chance for competition for Chile. Here most shippers are sold comfortably, with only some bigger sizes available.
Small prunes are becoming really a bottleneck as origin completely sold and spot material getting tight for anything smaller than 40/50.
For the next season worldwide the quantity of prunes will be shorter, so we may well see some firmer prices in the near future.
The sceptic comments after the 271K sultana crop estimation by the Turkish Ministry of Agriculture has vanished somewhat.
Thought to be a ‘commercial’ figure to support higher prices, meanwhile the earlier estimate of 330K as suggested by the Turkish industry has proven to be on the high side.
Prices meanwhile have firmed and similar to the apricot market, buying by TMO has helped to firm prices. Again the weaker Turkish Lira has compensated these rises with sultana prices at relatively low and attractive levels.
Of course the Turkish industry is watching what is happening in other countries and they notice some firmer trends.
California is having a smaller crop. With structural less and less bearing acres – farmers opting for better yielding nuts or other crops – the Californian industry is losing ground.
However for time being still an important market factor and due to the smaller crop obviously we see firmer prices.
In South Africa we see a growing supply of raisins and first indications for the crop 2021 are 85K+.
The aggressive pricing on natural Thompsons to move the heavy carry out of the 2019 crop has worked. Apart from an odd container not taken up by the initial buyer, South Africa is sold on Thompsons.
Last loads change hands at higher prices already, so a firmer level may be anticipated for Thompsons till Mar/Apr ’21 when the new crop 2021 may bring some relief.
More availability in goldens and flames which are offered at attractive prices from South Africa.
The lower Californian prices have attracted quite a number of buyers. Sales have been brisk if we may believe the shippers and first shipments are fully booked.
Prices have stabilized at the moment. We won’t be surprised if a massive generic promotion of the Walnut Board may be capable of raising prices and ship more quantity at the same time.
It will not be the first time they will be successful with such an economic paradox. However the consequences of pandemic is anybody’s guess.
Of course also the empty market in Europe has triggered demand. On the spot shelled walnuts are getting scarce.
The harvest has started with already an overwhelming growth of intake in September compared with last year (over 80% +).
Next month we will know how close the objective estimation of 780K will be compared to the actual crop.
The new crop in Eastern Europe will be quite limited this year (-30%) and more expensive in the beginning of the season, because many farmers didn’t start cracking yet due to the late rain period. From another side, farmers still have in their mind the price level from the previous season, which was significantly higher.
Organic walnuts from Eastern Europe still attractive and on a lower level compared to last year.