Market update on Greek Currants and potential impact on Euro zone crisis...
Market: Total supply situation as below:
|2014 crop estimate||20,000mt|
|Less packer retention (say average 12%)||2,400mt|
|Plus 2013 crop carry over||6,000mt|
|Estimated Total supply @ 1.9.14||23,600mt|
|Less anticipated export demand 1.9.14 to 31.8.15||17,000mt|
|Predicted carry over @ 31.8.15||6,600mt|
Estimated new crop total of 22,000mt (less 12% retention) = 19,360mt + 6,600mt carry over, would give an estimated total supply at 1.9.15 of 25,960 mt. With total demand of less than 18,000mt this would point to s surplus of around 8,000mt by 31.8.16. HOWEVER, we anticipate that demand for Greek Currants next season, will increase significantly compared to this season, due to the fact that their price is now very attractive, compared to Sultanas & Raisins. It is quite possible that subject to the scale of any increase in demand, the market will once again start to rise, as the season progresses. This may be tempered to some degree, by the desire of growers to sell their product early, however, the raw materail price is presently HALF of the amount it was, just two years ago, supporting the view that any indication of an increase in demand, could trigger an immediate increase in prices, whilst still remaining competitive in the golbal Vine Fruits market.
The Greek Economy remains in a critical state, with debts of over EURO 10 Billion due to be paid to the IMF, ECB and EU Member states, over the next two months and emergency bank funding presently only being maintained, rather than increased.
Prime Minister Tsipras insists that Greece is being held to ransom by its creditors and points to his mandate to resist any further austerity measures. The latest proposals for continued funding of Greece by the EU, require additional austerity measures to be taken. The Syriza Government has said that the EU proposal is unacceptable and have called a Referendum to determine the view of the Greek Electorate, in that regard. This is seen by many commentators, as trying to force the hand of the EU. The referendum scheduled for Sunday 5.7.15. If the result is against the latest EU proposal, then this may cause the EU to re-consider its position, as it would result in default, should there be no further concessions from Greece’s creditors. Default would trigger an exit of Greece, from the Euro-zone. A vote by the Greek Electorate in favour of the existing EU proposal would likely represent an untenable position for the Syriza Government - almost certainly meaning another Greek General Election.
Banks in Greece are presently closed to prevent further withdrawal of capital.
Should Greece exit the Euro-zone and revert to their own Currency, the damage to not only the economies of Euro-zone members but also Worldwide, would be significant. Resistance by Greece, may also strengthen the will of Spain, Portugal and Italy, to react in the same way. Fear of this, would appear to be at the heart of the Greek Governments approach, in that they realise that its creditors are acutely aware of it. Indeed, we understand that some concessions have been offered to Greece, by the EU Commission , this morning (debt relief and assistance for the poor) on the basis that the Greek Government accepts the majority of the proposal, made by the EU, last week and abandons any plans for the proposed referendum at the weekend. This is presently under consideration.