CATZINFO – DRIED FRUIT & WALNUTS
In this edition we report some important developments which may have influence on the products in our portfolio.
The more or less unexpected change of the president of the Turkish Central Bank resulted in a sharp decrease of the Turkish Lira against the Dollar this week by over 10%.
No need to explain, this had consequences for the export pricing of Turkish agricultural products.
To remain in Turkey: the weather forecast for Malatya for the coming weekend is mentioning 3 to 4 nights with night frost and temperatures may reach -5 Celsius.
The bloom has started early May in some areas and is in flowering status, so extremely vulnerable.
On top of all logistic misery, especially from Asia, the giant containership mv “Ever Given” has blocked the Suez Canal, the main gateway from Asia to Europe.
It is not known yet how long it will take, but worst case it may take weeks as per the latest information we have, but at least till next Monday when it will be high tide again.
This may result in further delays in the supply chain and some products may come in short stock positions.
There are also some (unconfirmed yet) rumours freight rates from Asia may rise further, certainly if the routing must be via Cape of Good Hope (SA).
The euro is weakening against the US-dollar, which does not help to soften the prices in Europe in general.
Basically no changes to report. The higher freight rates and certainly the delays in shipments do not make life easier for these products.
The ‘positive’ result for the export prices caused by the weaker Turkish Lira is at the moment completely off-set by the expected night frost in the coming weekend in the Malatya area.
Temperatures as low as -5 to -6 degrees Celsius may damage the crop severely in this stage of development.
As most of you may recall in 2014 a night frost in this stage swept away about 90% of the crop.
Of course it might be this frost is lighter or perhaps snow may soften the damage, but no shipper is offering at the moment except a few ‘brave’ ones.
If the frost will be minimal and not hit the orchards, we may even see a ‘normal’ crop. We will stay away from further speculations and will advise you in our next report the actual status of the market.
We suppose our readers may draw their own conclusions as well for each scenario.
Fact is that until this week prices were firm anyhow in view of the limited stocks of the current crop.
Due to increasing local demand for bananas, now the Philippine economy is improving after further relaxing the lockdowns, prices remain stable to firm.
With freight tariffs still sky high and no sign of weakness, on the short term we see not much improvement.
For the European buyers the question is not ‘at what price’ but ‘when available’.
Shipment bookings are rolled over and over and if finally shipped the vessels take a routing with numerous stops, resulting in further delays.
At the moment a transit time to European main ports of 10 to 12 weeks is not an exception (this was before the Suez Canal was blocked!)
Of course the Thai product has same problems as all Asian origins. Freight costs exploded and transit times extended.
The pineapple crop is about to be finished and prices on a FOB-basis somewhat softer in origin, but stocks in Europa are limited and no discount yet in view of demand for spot.
Papaya prices moving sideways but finally higher because of the logistic costs.
Ginger is becoming more and more a problem and as the crop will only be harvested in autumn, we may anticipate some serious shortages in the coming months.
The new crop pears – as expected – has been sold pretty quickly in South-Africa. The quantities were very disappointing and allocated in a couple of days at rapidly increasing prices.
As stocks in Europe are non-existing, the first shipments hopefully we leave in April, though also in SA booking container equipment might become problematic, so we hear from our partners.
For sure we have a difficult pear-season ahead again.
The crop of peaches is late by 2 or 3 weeks and largely sold as well in South-Africa.
The majority of the Chilean shippers is still withdrawn until they are sure what they have in their sheds.
The rains have had a serious impact on the outcome of the crop 2021.
The assessment of the damage is ranging from 30 to 50% and one need not to explain which effect this will have on the prices.
Some offer a limited number of containers at higher levels than we saw in the previous season.
With the current euro/dollar rate Chilean prunes will not be cheap!
California might be an alternative, but still substantially higher priced. The news from Chile will certainly not be an incentive for the Californians to lower the prices.
The situation in Turkey with regard to sultanas is despite of the weaker Turkish Lira still stable.
Though the weaker Lira allows lower export prices in dollars, the Turkish industry is not bringing too much product on the market in anticipation of a more stable currency.
Prices remain consequently in the same range as in the previous weeks.
South-Africa will be finished drying in the coming days and it is pretty much sure the crop will be at least 20% less than the initial 85K mton forecasted.
Golden raisins will be only half the quantity of last season (12,5 vs 25 mton) and sultanas will have a bigger share.
The Chilean jumbo goldens will be short as well this year and first prices are rather high. For the genuine flame prices are also firmer than the first speculative offers.
As always we must be a little sceptic, as these are the traditional tactics from the Chilean exporters in the beginning of the season.
For sure the rains earlier this year certainly will have had some impact.
The Californian crop was off 26% and total supply (crop + carry in) was down 17%. So no reason to expect easier prices from this origin and prices already have firmed since
the last months of 2020 actually.
The unexpected shortage of higher end qualities – especially light Chandler – has caused a rather serious increase in pricing for Californian walnuts.
Offers for Chandler 80% are hard to find; for the lower half counts somewhat easier. Packers are well sold on Chandlers and this has pulled up all prices for light material.
Total shipments are 54,7% of the total supply (vs 57,5% last season through February). Reason mainly the slow shipments due to shipping delays.
In conclusion: Californian shippers are rather confident – certainly when shipment will be back to normal – to move the bigger part of this bumper crop and arrive at the next crop with a manageable carry-out.
However they also have a close look at Chile: the crop over there is going to be about 150K mtons and is each year a more serious competitor.
For the top products (extra light and hand-cracked) the difference in price is still huge, but Chile is not aiming in this segment to compete.
However as labour is becoming expensive in Chile and processors more and more producing machine cracked, this will become a serious opponent for the Californian industry.
First prices for the Chilean walnuts are around and are more or less a continuation of last year’s levels.