August 2015 position report << Click here for full position report…
Shipments are down 126 Million vs 141 Million last year.
See above attached report.
August 2015 position report << Click here for full position report…
Shipments are down 126 Million vs 141 Million last year.
See above attached report.
USDA to stop referring to small raisins as ‘midgets’ <<Click Here for full Report
As you know since more than a week season started. I had already informed you about the crop size expectations in different regions.
Although it is proven that the crop is significantly short, the prices are decreasing. On this report I will try to interpret the reason of the decrease.
This year before end of April, when the most serious frost incident happened, the prices were too low. Exporters were offering down to 1500 USD/ton levels. These were historically low levels and such low prices were unnecessarily cheap.
So the importers have used this opportunity and made huge amounts of contracts also for later terms of shipments. When the March period passed, most exporters thought the probability of frost was so low and made more contracts and didn’t cover the reason was the decreasing prices.
Then at a very late time, at end of April we had frost. Historically from what we could find, only once , 30 years ago it frosted on May, it was regional. However it’s damage on those areas was huge but frosts after march were so rare.
Some part of these contracts were for shipment terms even after the start new season. Some of the exporters covered these contracts but most of them uncovered.
So when the season started, the importers weren’t accepting new prices easily. They were trying to collect previously made contracts as fast as they could. Until the finishing of these contracts they aren’t really interested at new prices.
Similarly, the exporters, while most of them having short positions, seeing the low new demand from the importers and increasing prices, they weren’t rushing to buy raw material, which later on (since last Thursday) returned the trend of raw material prices to decrease.
Growers, when they saw the prices turned to a decreasing trend, they panicked, remembered their memories of 2 years ago when the raw material prices increasing to 5,2 liras and then decreasing down to 3 liras. So with this panic they increased their supply in the market and which this helped prices further decrease.
But for 2 years ago, one point we should keep in mind is that California had a huge crop and a carry over. They were trying to decrease their stocks and were a lot cheaper then Turkey. They were asking around 2200 USD while Turkey came upto 2800-2900 usd / ton. (the lira price of raw material was 5,2 liras but the currency (USD/TRY) on those days were around 2,0 but today the lira price of raw material is 5,7 lira/kg but the currency (USD/lira) is around 3,00.
From another point, As I explained on my previous reports, this year the damage on the vineyards in the region where is supplying for vine industry is huge. So these companies changed their demand to Alaşehir and Sarıgöl regions. Normally beginning of the harvest, Raki industry was buying huge amounts in this region. But this year as Vine industry is also there, Raki industry is not in a hurry. Because Raki industry can use both fresh grapes and dried, however Vine industry can only use fresh. Therefore as a natural fact Vine industry was in any case going to be more aggressive so the Raki industry avoided competition. Stocks of Raki is completely empty they buy as much as enough for their needs.
Vine industry is not buying as much as Raki does, Raki will probably be buying most of it from dried sultanas, but for the moment as their demand is also missing in the market this fact is also helping decrease in prices. So we see more drying in those regions. However as Raki is buying less in Fresh they will buy more in dried.
All in all, there is a huge demand to come, but it is not coming yet. This panicked the growers and made them sell faster.
However we now see they are less selling and starting a resistance. Nothing can decrease or increase forever. This decrease will have a turning point and all buyers are looking to catch the bottom level. This is not possible unless by chance, when the trend returns, we expect a panic this time from the buyers and at that time the supply of raw material will be very scarce as the harvest will have finished.
As Özgür, we buy in any market, we don’t have the attitude to refuse our growers when they want to sell. .But we believe the scenario will be the complete opposite then the demand returns back.
Strong numbers particularly as the crop was late and virtually nothing was shipped in the first week of August. We expect September to be higher.
The harvest is complete. Quality deteriorated as the harvest progressed, with most lots now arriving without farmers having carried out any size grading or defect selection. The majority of the crop is large fruits due to the reduced yields following the frosts in April. There is virtually no difference in price between size 2 3 4 and 5.
Prices for sulphured apricots has remained steady at Tl 10/Kg for the past 5 weeks, with any variation in export prices coming from the exchange rate. The Lira is volatile due to political uncertainty ahead of the re run of the general election scheduled for 1st November.
Organic prices have been increasing as supply is clearly tighter than expected, the premium for organic is now approaching 60%
The walnut crop estimate for 2015.
A bit of a surprise, the crop is estimated at 575.000 short tons (inshell). This would be 5.000 short tons over last year’s crop and hence represents only a 1% projected increase in production.
Why is this a bit of a surprise? Most industry members in California seemed to expect a crop of 600.000 short tons or more. Some spoke of large bunches of walnuts on trees. There was concern also over the actual size of the nuts. Well, this is what the estimate tells us:
Nuts are projected to be longer, wider, fatter and heavier (better yields?). Only the percentage of sound kernels is marginally less than last season.
The average nut set per tree is down approx. 7,3%
The overall supply situation will therefore not change dramatically. While last season 2014/15, total supply was approx. 609.000 short tons (crop of 570.000 short tons + carry in of approx. 39.000 short tons), this year’s total supply will be around 40.000 to 50.000 tons larger. Will this increase in total supply weaken the market above and beyond of today’s market prices? The answer is that we shall see, but….. There could be a bit of a psychological impact, as this crop estimate is a surprise and smaller than expected and it might stabilize the market. But in the end, supply and demand will dictate the market prices. There is hope that emerging markets such as India will buy more walnuts this season, on the other hand, there is concern that China may not buy as much. The lower prices may also encourage a better initial demand in all markets and generally raise the demand in all markets across the globe. Also, the carry-out inventory contains significant quantities of less desirable darker kernel qualities. Hence, this gives some reason to expect light kernel grades to remain steady in price.
Two aspects that could be beneficial: Overall, all the inshell size measurements are larger than last season, which implies nut caliber is larger. Nuts will be longer, wider, broader. This gives hope that the percentage of large sized inshell nuts will be better than last season. Secondly, nuts seem 7% heavier when compared to the previous year, which gives hopes that also the kernel yields could be improved. This is good for yield recovery and also good for inshell buyers who look to crack inshell walnuts in their import markets.
What strikes me as interesting is the nut set per tree. We have been hearing that there is a great Howard crop out there and the estimate indicates a nut size per tree that is 12,5% below last season. The other varieties such as Chandler also show a diminished nut set by approx. 5,6% and Tulare are almost identical to last season.
For the traditional inshell buyers, the Hartley are showing improved size over last season, superior nut weight but less sound kernels and a nut set that is down approx. 4,8%. The Vina is also larger and heavier and the percentage of sound nuts is quite similar to last season, only that the nut set is 19% below last season.
All in all, this is an intriguing estimate. The market was soft in recent weeks. This estimate could stabilize prices in the short term. We all now hope for a good harvest with no rain and many good quality walnuts and a market that will encourage seller to sell and buyers to buy with confidence.
We look forward to supporting you this season and wish you a successful 2015/16 walnut season.
The total quantity of 2015 crop was announced by Izmir Commodity Exchange as 74.505 kg, against 69.731 kg of last year’s estimates.
We believe that the crop is much bigger, around 90.000 tons, which means all times record.
It is deliberately under estimated by the Authorities to prevent the price dropping too much. But soon or later, we expect a significant decrease in the current price levels.
Comparing to terrible quality of 2014 crop, we can say that the quality is excellent this year. The fruits have lighter color and high sugar content. The only problem seems the high percentage of split figs in early harvest, but the quantity of sound fruits is more than enough for the market’s demand.
The official first export date was announced as October 2nd. If we consider 7-10 days late harvest due to weather conditions, it seems as a reasonable date.
The market opened quite firm. The farmers insist on the same price levels of last year, and some of the traders support them by speculative purchases. In any case, strong US$ rate helps export quotations to be 15-20% cheaper than last year.
Best wishes for a pleasant season !
Report from Ozgur Tarim:
According to the data from Aegean Exporters union, Turkey exported 255.043 tons between 01.09.2014 to 29.08.2015. The average price of this total quantity was $1800/MT
Looking at this figure, we believe crop size of 2014 crop was lower than the declared volume 328.000 tons and it was 305 thousand tons.
We believe there was also a carry in of around 35 thousand tons which made the total supply 340 thousand tons.
|Carry In From 2013 crop||35000|
|Total Available Quantity||340000|
|Export end of the season||255000|
|Domestic Consumption (ıncluding alcohol)||40000|
|Carry Over to 2015 crop||45000|
|Carry In From 2013 crop||45000|
|Total Available Quantity||215000|
|Domestic Consumption (ıncluding alcohol)||35000|
|Export end of the season||180000|
|Carry Over to 2015 crop||0|
Season started, raw material is coming slowly. As was expected, it is a lot slower than 2014 crop. New seasons shipments will start from this week. Last year in these days in 2 buying stations we were receiving 1500-1600 MT but in this year we aren’t able to receive more then 250-300 tons.
Aproximately half sold and other half in consignment.
If we divide the region into 4 parts, we will better explain the situation region by region.
Region 4 has the most problem. This area is producing fresh grapes for vineries and for Raki industry. The extreme cold weather in winter time (below –12 C) has damaged these vineyards most seriously. So many vineyards here are dead from cold, needs to be pulled out. We will see if they will replace with vineyards on the coming years. Alcohol industry here was buying more then 250.000 tons of Fresh grapes but they will be able to buy a maximum of 20-30 thousand tons. They are also shifting their demand to other regions, mainly to Region 3.
Region 1 and Region 2 also has serious problems from the several frosts happened through March and April. In these regions there are more then 10 exporters ıf Sultanas and Raisins and mainly the big ones.
Region 3 – Here has the least damage but even in this region according to most optimistic view the shortage is over %40. After a crop of 2014, the yield of the vineyards wasn’t too good.
Our main market on fresh grapes is Russia, due to the crisis there exports are slower, but considering the at least %40 shortage of crop here, the shortage of export doesn’t seem to be as big.
On the other hand the domestic demand for fresh grapes is really big. Availability of other fruits is even more scarce and more expensive.
Region 3 is also receiving a lot of demand from other regions and has its own demand also. Here most of the goods normally traded through mid traders (merchants). Big demand to them.
We hear that, there are even some exporters from other regions here, buying fresh and carrying the goods to their regions for drying.
All in all, crop is very short. Prices in Lira terms increased already too high. Tariş already announced their opening prices. They are a lot earlier then they usually are. Because they weren’t having enough and needed to declare some good price to attract growers. Because if anyone misses the season to purchase after the harvest this year will have difficulty later on. Thankfully yet the currency is helping the USD offered prices from increasing too much. From another perspective this devaluation is also helping Lira prices of raw material to increase more.
Importers are mostly quiet, they try to collect previously made (mostly very low priced) contracts as fast as possible. Until these are finished they prefer to watch and see the developments in the market. Most comparing this season to 2013 crop, while prices increased too much at the beginning and then decreased too much. They are afraid the same may happen this year again. But please remember that time prices reached upto 2900 usd / ton in Turkey but that time California had a really big crop and a carry over. They used this opportunity too good to get rid of their accumulated stocks. But this year the situation is a lot more different. And yet, still they are more expensive then Turkey. Other than USA , there is no other origin to substitute
Of course Turkish prices shouldn’t increase too much. We always say that this is not a medicine 🙂 We believe it must be max 2500 usd / ton. But you never know there is no control over the market but due to the psychology of the players in the short term we may see a lot bigger fluctuations.
The levels today which are between 2300-2500 USD is not too high considering the past levels. But not that easy for the buyers to accept after lower then 1600 usd levels of last year.
We prefer to sell on a daily basis. What we buy we try to offer and sell. As always is the priority is with Chelmer Foods.
We will keep to follow the market very closely.
Please let us know if you have any comments or questions.
For PDF report please Click Here >>SunOpta Sunflower Crop Report August 2015 <<
I would like to share the latest developments with you in the Sultanas and Raisins Market.
Their estimation is lower by more than %40. The reason of such shortage is the hail and frost damages happened on various days. At the same time, following a big crop like 2014’s the productivity of the vineyards are also poorer.
If we question the accuracy of 2014 crops estimation, we believe the crop wasn’t as big as 328 thousand tons.
Committee did a good job at that time but the reason we didn’t agree was, during the time frame between their deceleration till the harvest (due to the extreme temperatures) the brix content (sugar) of the grapes didn’t improve as intended.
This resulted with a lower yield on drying. ( less sugar more water on grapes so more evoparation on drying). On our estimations, we declared 300-310 thousand tons.
As we are at the end of the season now, we see we were accurate with our estimation.
Last year end of the crop, the prices were too low and growers didn’t want to sell. They were carrying about 30-40 thousand tons of fruit which was yet unregistered since it was not traded yet. This volume is registered into 2014 crops figures.
Whereas in 2015 crop we believe there is again going to be a beginning inventory of around 40.000 tons but this time it is registered since it is on the hands of the growers, merchants and exporters.
Fort he coming crop, it is really difficult to estimate. There is no homogeneity at the vineyards. We respect the delegation but we are more pessimistic. We believe crop is going to be somewhere between 170-180 thousand tons
Beginning of the season will be really difficult. Growers will start with very high price expectation. We may see overvalued prices at some stages. But we don’t expect to see prices to decrease too much later on. As the crop is really short.
Berries will be big, so the up charges for mediums or smalls will also be very large.
Hopefully no additional damages from weather conditions because we have had more than enough already.
Since last week, rain is coming to the region. Coming days are expected again. Big risk for diseases and hail. We see some growers already started to harvest their product to avoid diseases.
Although the sugar content is good enough at grapes (Considering the time), such risks on weather, so early harvesting is preventing sugar content from further improving.
One point we will need to focus will be the fresh grape export. Due to the economical problems at Russia, we may see a significant slow down exports of fresh grapes. These fresh ones might then be returned to dried.
But we don’t see this volume being more then 10-15 thousand tons of dried equivalent.
Please don’t hesitate to contact us for any further.