Monthly Archives January 2020

Pineapple Update January 2020

Now we are approaching the completion of the first month in 2020, it has become apparent that there is a limited supply of Pineapple, which is rather strange in comparison to the historical records. People are now even more pessimistic over this years total supply, it is expected to be less than 1 million tons (compared to Y2019 @ 1.05 million tons). This is mainly due to the shortage of rain in the last 3 months when it’s important for the Ratoon to get the water after flowering.

In addition to this, the irruption of a volcano in the southern part of the Philippines has caused yet more damage to pineapple plantations.

Considering all of the above, it is important to consider a significant reduction of global pineapple supply in 2020.

date:  Jan 24, 2020 comments:  Comments Off on Pineapple Update January 2020
by:  Sian Koster category:  Latest News Read More

South Africa Vine Fruit Report

The Vine Fruit crop in South Africa is progressing well in both Upington and Vredendal. It had been indicated that this year’s crop will be 5000 MT more than 2019 crop reaching 80000 MT. This is despite the frost damage that hit the upper river area of the Orange River near Groblershoop and resulted in a loss of 4,500 tonnes. Considering all of the above, the quality of the crop still appears to be very promising.

New varieties, like Selma Pete and Merbein, are producing above average yields, excellent quality and will be harvested earlier.

Commonly the drought in the Western Cape has significant effects on production volumes, particularly from 2018-2019. However, this year there has been enough rain therefore, the dam will have enough water to suffice. Vredendal is where 100% of currants are produced, and the decrease in drought has meant crop is back to normal levels (2020 estimate 8,000 tonnes).

Production in Vredendal

2017 = 7,273 MT (currants = 4,206 MT)
2018 = 4,763 MT (currants = 1,951 MT)
2019 = 4,132 MT (currants = 1,220 MT)
2020 = estimate 7,800 MT

Much like the above, goldens are indicating that all is on track and looking very promising.

Volumes of Goldens produced in SA: 

2018- 23,000 MT
2019- 11,000 MT
2020- estimate 20,000 – 25,000 MT

The Demand has had an influence on the increased volumes for Golden crop. This demand has come from the global price of Thompson Seedless Raisins (“TSR”) has decreased and that there is again a substantial financial incentive for the farmers to produce Golden’s.

Golden’s, are a much more costly product to produce because of the needed facilities, equipment and racks and the additional manual labor. So, the farmers who have the necessary equipment will again have an incentive to produce Golden’s.

date:  Jan 24, 2020 comments:  Comments Off on South Africa Vine Fruit Report
by:  Sian Koster category:  Latest News Read More

Turkish Vine Fruit Update

Turkish Vine Fruit Update

Everything in Turkey at the moment would suggest downward pressure is going to be applied to pricing of raw material in the coming months.

  • Exports are down 8% year on year for the crucial Christmas period of September to December, which is made even more astonishing when you consider almost all major European players had next to no stock at the end of August.
  • Export for December alone was down 45% Y-o-Y (2018 – 20,777 tonnes & 2019 – 11,354 tonnes).
  • Bourse Registrations are up 23% for September to December, which was to be expected somewhat with an increase of 17% on crop estimation Y-o-Y.
  • 60% of this years crop has been registered at the bourse, whilst only 34% has been exported thus far.

 

Crop Estimation 2018 1st Sept 2018 to 31st Dec 2018 Crop Estimation 2019 1st Sept 2019 to 31st Dec 2019 Differential Year on Year
261,000 tonnes Export Volume 113,566 tonnes 305,000 tonnes Export Volume 104,364 tonnes Export Volume 9,202 tonnes down
Bourse Registrations 148,798 tonnes Bourse Registrations 183,025 tonnes Bourse Registrations 34,227 tonnes up

 

  • If exports carry on at roughly 18,000 tonnes per month (the average for Jan to August over the last 2 years) then exports will total somewhere around the 240,000 to 250,000 tonnes for the 2019 crop at the end of August. This is on par with 2018 crop (252,450 tonnes exported) which as we know was smaller in estimation, meaning a significant carryover of stock into the 2020 crop (circa 25,000 to 30,000 tonnes assuming domestic usage is about 30,000 tonnes per year).
  • Taris and the TMO (Government body) have now stopped buying material on the Bouse at 10 TL/KG, as had been their strategy since September.

What all of this means is that with low export figures, high bourse registrations meaning plenty of stock in packers hands and a lack of buying by the TMO/Taris is that raw material prices are already beginning to show signs of weakness. Farmers are still asking for 10 TL/kg but given a lack of interest are accepting 9.5 to 9.6 TL/kg levels to move material on. The hardest thing to predict is where will this pricing level will go and then where it will settle. Traditionally we see prices fairly firm during the beginning of each year as the fear surrounding frost and storm damage during the crucial period of March & April causes caution in general.

Lira Weakness & Regional Instability

The Lira has already shown some weakness against the US Dollar in 2020 going from 5.952 to 5.977. There is a fear in Turkey that this could easily reach 6 to 6.2 early next week through fears of what the USA’s latest action against Iran means given that Turkey & Iran share a border, albeit some 1100 miles from the Vine Fruit region.

Only this morning the Turkish government voted to allow troops to be deployed in Libya to aid the government in a “training & advisory” role in their bid to end a civil war. This action has already been widely condemned by many countries and other NATO members. This increase in escalation adds another political factor to consider alongside Turkey’s issues with Kurds in Syria and any potential fallout with the international community.

Worldwide Competition

Pricing coming out of China and Iran is $200 to $300 per tonne cheaper than it’s closest Turkish equivalent. Both origins have plenty of material to sell and are offering material on medium to long term contracts for sizable tonnage. Californian prices have drastically reduced over the last 3 months and instead of being $500 to $700 per tonne over Turkish are now around $150 to $200, which is a lot closer for those markets that prefer Californian material (the Japanese market being a large import market that will pay that level of premium). Harvests in Southern Hemisphere producing countries are on the horizon with reasonable crops expected by both Chile and South Africa. Worldwide supply is plentiful and on the main competitively priced.

Overall Summation

Given all of the above the biggest factor in downward pricing for me is the fact that Turkey competes with Turkey. Slow exports/sales coupled with large stockholdings in packers hands and a weak Lira against the USD will mean that packers start to chase sales by dropping their margin. How far and how quick prices will drop is going to be the main thing to keep a very close eye on in the coming weeks, an opportunity to secure a good price before any potential frost/storm damage occurs in March & April is potentially there.

date:  Jan 03, 2020 comments:  Comments Off on Turkish Vine Fruit Update
by:  Sian Koster category:  Latest News Read More