CATZINFO – DRIED FRUITS & WALNUTS
With the first shipments of apricots within short, the 2021 fruit crops in Europe will start to come into the market.
In general we notice most markets are firm in pricing as supplies are delayed for obvious reasons related to COVID-19 and some crops were disappointing, whereas demand even sometimes increased.
Where in Europe the situation with regard to Corona has improved – though with some regional hick-ups – in Asia and some other origins the situation has become dramatic again. As a consequence it is hard to find workers for the harvest and in the factories, which is not a promising sign for the supply chain in the coming year.
Where we had hoped the ridiculous freight would be softened in the second half of this year, it seems to have been in vain, as on the contrary even higher rates for ‘popular’ Asian ports have been announced. Next to this there is hardly any origin where shipments are not rolled over and in combination of extended routing of the vessels, delays of several weeks are becoming the new ‘normal’.
We think the coming period a general price increase of most products is unavoidable for reasons as mentioned.
It is in our opinion advisable rather to be covered than go short, where the choice for a reliable contract-partner is evident.
The dollar weakened somewhat yesterday, which is usually good news for imported products.
Due to the disrupted arrivals from China, the spot positions are getting scarce. The new crop from China is expected to arrive earliest in October.
The fresh crop is looking good. There is however the paradox, that prices have dropped somewhat on an FOB basis as the extraordinary freight costs are
blocking the export, but these same cost have increased the CIF prices at destination.
The first lots of dried apricots have reached the market in Malatya. With an expected(!) crop of around 100.000 mtons we may call it a normal year.
Though not abundant, the would be a quantity to match supply and demand, certainly when prices are higher and restrict a bigger demand according to economic laws.
Prices may stay firm for a couple of reasons: farmers have had higher prices at the end of the season and had a reasonable year.
In such a condition they do not have the need to bring too much apricots on the market and create a kind of shortage. As certainly demand for the first shipments and the Christmas season is bigger, this may push up the market prices. Also the logistic and COVID-19 problems do not ‘forget’ Turkey and may cause some disruptions in supply.
An additional element is the failure crops in the surrounding countries like Uzbekistan, Tajikistan etc., which will bring additional demand from Russia in Turkey.
For time being prices increasing daily and we cannot but advise to take at least some covering.
We see domestic pricing soften somewhat as exports to mainly the USA are slowed down due to the lower capacity of ocean transport – lack of containers – as well as fresh fruit traders who were not aggressively purchasing since the 2nd second strictest lockdown in Davao City. When they will return to the market volatilities will again prevail. Prices in Europe remain high as freight rates keep increasing and becoming a substantial part of the cost price. Despite, these little softened prices, we do not foresee improvement till the end of the year. The tropical storm season is about to start as well, which increases the chance of damage (plantations and infrastructure). We strongly advise to have a look at your needs until at March/April.
In general the situation in Thailand is ruled by the logistic issues. Lack of workers combined with delays in the ports due to limited space on the ships is causing a
slowdown of the supply towards Europe. On top, the increasing freight costs – the highest bidder gets the container on board of a ship – result in firm pricing.
The pineapple crop is in and seems to be normal. For papaya there is certainly some shortage and this will certainly cause some higher pricing till next crop next year.
Ginger faces a small crop and is getting scarce again.
With the exception of some peaches, South Africa is sold on tree fruits. For pears the crop is completely committed.
Shipments are rolled over and over and on top there is a disruption in the SA ports due to an ICT sabotage which has even forced port authorities to involve force majeure for the delays to get ships loaded.
The situation is known: the Chilean crop is a disaster with half the quantity as expected. Not only delays but many breach of contracts make the situation difficult.
Meanwhile first containers are at least shipped, but at substantially increased price levels.
These prices make Californian alternatives meanwhile interesting. Though still higher priced – certainly in view of the 9,6% import duty for the EU – it is in some cases
the choice between having no prunes or accept the higher prices from California.
The Turkish crop is developing well. It is expected TMO will raise their prices they buy from the farmers early August in order to lift market prices.
At the moment the prices are very attractive and off course the strategy will be to attract farmers to sell to them and create an artificial shortage.
The rate of the Turkish Lira will be an important player, but is unpredictable.
SA stocks are limited and prices steadily increasing.
Californian prices remain firm and the last available quantities from SA might be a good bargain.
Chilean prices for jumbo goldens remain firm due to limited availability. Flames and Thompsons still well available.
The subjective estimate announced a decrease of -8% (723K short tons vs 784K of the actual 2020 crop). In combination with a record June shipment (+11% vs June ’20) and +16% YTD the Californian industry is raising their prices. Certainly taking in consideration 93% of the crop is committed, there is no need to have mercy with the buyers.
To end with another bullish factor: the European market for Chandler 80% halves is completely empty, interest for the first shipments is huge and almost fully booked.
As it is an expectation and the results of the drought and sunburn might have a further negative impact, we may get a further update on August 24th when the objective estimate is known. For sure the first shipments will be priced even higher than the so far speculative business done and we may well advise to look at your needs for the first period.
Next to all this, it will become a struggle also from California to get the first containers on board due to the reduced vessel and container availability.
The somewhat disappointing Chilean crop (-10%) prevented prices to soften as expected in view of the difference with the prevailing lower Californian prices earlier this year.
On the contrary, with over 80% sold, prices are firming for Chilean walnuts as well.
Eastern European crops are still a question mark and the expected yields will be more clear during next months. The fact they are sold out with the crop 2020 as well, does not help to expect lower prices from these origins as well.