Apricot Crop 2015 and Update
Exports in April were a surprisingly robust 5,180 tons compared to 6,750 last year.
Year to date exports are 42,004 tons compared to 95,394 last year.
April exports were very strong, as prices dipped below $6,000 per ton ($2.75 per Lb) in February/March and buyers stepped back into the market. We expect exports to moderate somewhat for the rest of the season as stocks are almost exhausted. We expect total exports for the season to reach 48,000 to 52,000 tons with domestic sales of approximately 6,000 tons. There will be no meaningful carryover.
The Lira has strengthened 10% over the past 2 weeks from 2.85 back to 2.58 today.
We have spent the last weekend visiting the major growing regions. The weather was poor all through the bloom, with rain, unseasonably cool temperatures and a number of frosts.
The most important single growing region is the plains around Malatya, from the Yazihan in the north to the city, and from Akcadag in the west to Kale in the east. This represents around 40% of the total production and is the earlier blooming part of the crop. All of the orchards we visited in this area had been frost affected, with the trees yielding between zero and 30% of a normal yield. Pretty much all of the fruit coming from the Kaba asi variety (large/jumbo fruit). We estimate that this area will produce overall 20% of an optimal crop, a total of 14,000 to 15,000 tons.
The remaining areas are all spotty, nowhere is the crop heavy, in the outlying and higher elevation villages the crop is between 20% and 70% of an optimal yield. Given the wide geographical region, and multiple micro climates/elevations it is difficult to be precise, therefore we estimate the yield in the outlying areas to be between 50% and 60% of normal, giving a crop of between 45,000 and 60,000 tons from these regions.
We are therefore forecasting a total crop of between 59,000 to 75,000 tons (general consensus from packers seems to be between 50,000 and 70,000 tons, we have not heard any estimates of over 80,000 tons).
Organic will be less than 50% of the 2013 availability, as many farms did not pay certification costs last year after the crop disaster, and given that the overall crop is down some 50%.
Sizing will be large, very little fruit smaller than size 4, average probably size 2.
So far quality looks good, no significant hail or speckling.
- Pre the 2014 crop disaster, consumption (domestic and export) had been between 125,000 and 130,000 tons per year at average prices of around $3,300 per ton (SO2 size 4)
- 2014 crop total supply was 55,000 tons, all consumed. Prices opened at $7000, increased to $12,000 before falling back to $6,000 and selling out.
- Total supply is going to be 50% to 60% of a “normal” crop.
- Total supply is going to be only 5,000 to 20,000 tons more than 2014 crop.
- The crop is going to be late, there is going to be strong demand at the opening, especially for organic.
- Organic is currently being negotiated at around $8,000 per ton, which gives a good indication of farmers expectations (deduct 20-25% for conventional).
- Some farmers will sell nothing before bloom in April.
- Some supermarket shelf space has been lost to other products, without a fighting price and large crop, this will not be regained this season.
- There are very uncertain and divisive political tensions in Turkey at the moment which may negatively affect the currency over the summer.
In summary, volatility, with another seriously short crop we face a significant risk that prices rise during the busy August to October period, and if a similar pattern to last year prevails, prices could overshoot on the upside (Turkish specialty…), before correcting when the market slows down in December- January.
Prices seem reasonable to us at the moment, which makes us more than a little apprehensive!