Sun Valley Raisins Crop & Sales Report – December 2015 << Click here for full report
A Bright spot in the Ag World. Sales have been very good. Currently strong increases in Europe and the Middle East are driving sales. Asia remains on the weak side but we do believe activity will pick up. Korea is getting through their inventory hangover from the excess old crop inventory. Demand appears to be picking up in Korea. Even with the huge declines in China and Vietnam, overall sales are still trending above last year and November had a 14% increase overall.
Over the past two weeks we have seen Chandler prices start to firm. It is still expected that the Chandler crop will probably be sold out by April/May.
Chandlers right now are trading in the range of $3.00-$3.20 depending on source and quality. Non-Chandler and Combo product will remain weak throughout the year. Another big crop is expected in 2016 so the industry is working hard on advertisement and promotional activity to recover old market shares and generate new demand globally.
It looks like the processors and the RBA are close to a 2015 field price. Lion has been pushing for a price close to $1600 and it appears that the RBA is moving towards this level. Lion was concerned over the low prices advertised by National Raisins ($1,000 per ton Base.). Right now it appears that the RBA base price will be around $1402 compared to last year’s base price of $1577. The National Raisin program at $1.000 base was not warmly accepted by many in the industry.
The $1402 base and with bonuses would gross up to $1600 ($1775 last year). Many RBA boards members were not very happy about this price and there certainly was some very heated arguments between the growers and the packers last week. In general this will make prices around the $1.00 per pound level.
The weakest markets are still in the European community. England has been performing horribly with decreases at -36%, and Germany, the third largest market, down -15%. Overall demand has been weak and Asian markets are down -16% in total, but there have been good increases in the Philippines, Singapore, Taiwan and Thailand. US demand has been stagnant. The domestic market shows increases but the increase is primarily attributed to the government purchase for the feed programs. US market remaind very flat and disappointing.
The market remains much like a roller coast. Prices go down then quickly go up after a flurry of contracts are done. There is substantial concern with the continued loss of market share in some markets. Japan has been a bright spot with increases totaling 8% but the rest of Asia is down substantially. Overall , export markets continue to trend downwards. If sales continue the downward trend to -13-15%, the carryout would increase to 676,000,000 pound compared to 408,000,000 last year. This is why we expect prices to move closer to the $3.50. There is a high possibility of a huge crop in 2016 so it would behoove the industry to target a carryout less than last year. We will continue to watch the monthly trends but we do expect this up and down activity to continue throughout the year. Packers who have more of their own production will have more control. We believe it is very important now to take care of customers for tomorrows large crops. Current NPX prices are around $3.90. Cal varieties much less.
Year to date exports are 31,878 tons a 58% increase over the 21,149 tons in the same period last year.
With domestic consumption in addition to the above we have now moved roughly 50% of the available supply, and with 8 months to go until new crop, exports will have to slow considerably.
As we said last month, arrivals in the market in Malatya have slowed to a crawl as growers have now sold all they intend to before the bloom in March/April. Any lots that do come to the market are bought by packers immediately. If exports do not slow, then prices may have to rise.
The banning of imports of dried apricots by Russia will have limited effect, Russia buys mainly for winter seasonal consumption, and much of that has already been shipped, we estimate a further 3,000 tons could have been shipped from now until new crop, some of which may find its way in through the back door in any event.
Prices have remained steady over the past month. The Lira has also remained steady, and is currently at 2.91 to the $.