Hierbij het laatste nieuws van Catz International. Een van de pijlers van Acomo:
It seems the hectic period has started. Last minute demand for the Christmas period putting more pressure on the scarce stocks in general.
There are a few reasons why stocks are rather low for a couple of items:
Decreasing prices made buyers hesitant to step in and first clear their own higher priced stocks; f.e. walnuts and some types of raisins;
Smaller crops already earlier this year like apricots, bananachips, pears, and pineapple resulted in non-to-zero stocks nowadays in Europe;
Logistic problems especially from the Asian continent, where there is a shortage of container equipment and shipping space, causing substantial delay caused by rolling over cargo to the next vessel.
This last issue brings another problem: freight rates from Asia are exploding as it is quite simple: you pay more or your load is rolled over. Meanwhile tripled(!) freight rates are not an exception.
As most conditions holding a paragraph increased freight rates may be charged to the buyer if not known at time of the contract, this will bring certainly some discussions, as the increase sometimes overshadows the margin.
Of course we can also not neglect the consequences of COVID-19: some sectors doing rather well (retail) and for others it is rather problematic (food service).
At the moment the situation in Europe is still difficult and we are afraid in most countries even with Christmas there will be many (partial) lockdowns still.
The dollar weakened in the last days against the euro, which made some prices result in a somewhat more attractive level in euros.
The Turkish Lira remains very volatile with changes of more than 2% daily, which makes calculations for the Turkish shippers rather ‘adventurous’.
Dried Fruits
Apples
With some considerable delay, the first shipments of Chinese apples are on the water. Whilst afloat it means stocks are going down and we notice some bottlenecks in a few of the apple products.
Pricewise there are not much alternatives, as other origins are way more expensive and not at all competitive.
For time being supply from China is normal but is shipments continue in this pace, we will see a tight spot market over the coming months.
Apricots
Of course daily pricing of the Turkish apricots largely depends on the rate of the Turkish Lira against the dollar.
In the last week the spread was between 7,54 and 8,04 (roughly 6% difference in 7 days).
Shipments to date were down by almost 15%, so this may bring some stress at the end of the season as the crop was down by about 30%.
Most sizes still available, but we expect certainly a somewhat firmer market in the coming months.
Of course all theory can be put overboard if the Turkish Lira collapses further again. However the new head of the Turkish bank may succeed in a more steady course.
Banana chips
The prices for bananachips continue to rise. Supply of the fresh bananas is down and prices are the highest since more than 20 years.
The Philippines are anyhow in bad shape, as not only COVID-19 has hit the country more than average, also the last 2 typhoons have severely damaged the logistic infrastructure.
Another reason of the higher price setting is the substantial firming of the coconut prices, a.o. also for coconut oil, an important component of the cost price of the chips.
For time being most shippers have withdrawn from the market due to the uncertainty of getting the raw material and have announced to be booked till Feb/Mar already.
So adding the transit time to Europe, arrival not before 2nd half April and most probably still limited quantities.
On the spot quantities are obviously restricted as well as on top the retail is booming on cereals, in which bananachips play an important role.
Pineapple/Papaya/Mango
The prices for the pineapple and papaya are easing somewhat. As shipment still have to come stronger it means on spot there is still a tight situation, especially for pineapple.
We mention especially a product like ginger, which is short due to a short crop in China and for which prices have increased considerably.
Pears/Peaches
Since China has devaluated to a minor role at the time a few years ago, when sugar added product was not allowed to have more than 100ppm sulphur, South-Africa took over its place.
As the pears crop this year was a disaster in SA this year, it means simply there are no pears for sale anymore. It will be only out of the new crop pears next year in Jan/Feb when new shipment may bring some relied.
To a lesser extent the same applies for the peaches.
Prunes
With Chile sold almost completely, the market has to cope with what is still available till arrival April/May next year.
Prices are firming as especially small prunes are sold completely, which puts more pressure on the bigger sizes and consequently firming in price as well.
Raisins
The oversupply of natural Thompsons last season (2019) resulted in lower prices. It took some time into the 2020 season till this was sold at lower prices to move it.
The smaller supply of this season has now also come to an end as far as availability is concerned and we notice prices both for Californian and South-African product rising.
Though South Africa in origin is sold completely, we therefor speak about the second hand market. California just harvested and shipping since a couple of weeks the new crop.
Also we notice an increased demand for goldens: not only for Christmas demand, but also for the coming Ramadan-period, which must be served from this year’s crop,
as the crop on the Southern Hemisphere will be too late to reach the market in time for the yearly advancing Ramadan period.
Turkey has shipped about 20% less compared to same period last year. However prices remain stable as TMO is buying steadily and keeps prices at this level.
Meanwhile they have sold a substantial quantity which for time being is out of the market. Question will be. How long can they hold this huge stock (60/70K tons) and finance this?
One day or the other this quantity must come on the market, as in view of the bad shape of the Turkish economy and the high interest rate, we cannot imagine it will all end op in the “Raki” at a fraction of TMO’s buying price..
Nuts
Walnuts
With the first shipment arriving in Europe with Californian crop 2020 walnuts, buyers are still on hold.
Though stocks are low, the decreased prices made buyers very hesitant to step in and as we see at the moment demand for spot material is getting more serious,
We cannot but come to the conclusion the strategy of most is buying ‘hand-to-mouth’.
Meanwhile the Californians report the lower prices have triggered especially the Asian markets.
In some Asian countries the Corona cases are getting rare and in this new optimism demand for more luxury food is increasing.
This of course is used by the Californian walnut stakeholders to ‘warn’ the market is bottoming out and we may see some firmer levels in the coming period.
This obvious theory however is also supported by the fact, that prices of the walnuts in combination with the current low dollar are close to half the price they used to be.
As there still is a economic theory about price elasticity, we may expect that after the higher priced walnuts have been sold at consumer levels and the lower prices will emerge in the shelfs,
demand must pick up considerably and will help to move this bumper crop.
At current levels we do not see much of a downside anymore and a decent long position can pay out next year.