Seeds Market Outlook, August 2023
Food price inflation in the UK eased to 12.7% last month, the second sharp drop in a row, as the price of milk fell back but eggs, sweets and oven chips continued to increase.
Price rises slowed for the fifth month in a row in the four weeks to 6 August.
The market remains relatively unchanged. The packers are seeing very little new crop material being offered. In theory this will push up the prices, however, overall, the market at the moment is very subdued.
Harvesting in Bulgaria is still well underway. During our recent visit, although there were untypically high temperatures followed by heavy rainfall, this gave a chance to rejuvenate the sunflowers. Unfortunately, the rainfall didn’t manage to get to all areas, however, a healthy crop with no reported disruptions. Nonetheless, prices in Bulgaria are still artificially inflated somewhat by the fact farmers are holding on to a huge amount of carry-in, something we haven’t seen before. They are extremely reluctant to sell any raw material. This is in combination with the knock-on effects of the Russia/Ukraine war.
What with new crop still to come in to play there is some disparity in price levels offered out. There are some yield concerns due to abnormally hot weather, the ongoing Russia-Ukraine conflict, and the fact that some suppliers are in a short position. It will be interesting to see how the coming weeks unfold.
Despite the added confusion and disparity in crop estimates, last Friday the Czech Statistical Office issued the official yield and production estimates. This was much closer to realistic expectations at 19,000 mt, however, still about a 30% decline on previous years. We should hopefully start to see some stability back in the market.
The demand from abroad remains weak and prices are looking promising taking into account an increased planting acreage and favourable weather conditions. However, the production decline of 40% for GWS is a bit concerning. Overall, the outlook for the new pumpkin crop is positive, but there are some risks that need to be considered.