Turkish Vine Fruit - Harvest & Market Report
On Wednesday 23rd August our Izmir based colleagues in both technical and operations departments joined our buyer Simon in conducting our first truly independent Vineyard visit as part of “Project Vineyard”. As part of this project we are aiming to give ourselves our own reference vineyards and information on development alongside that from both our partners Ozgur & Pagmat. Expect some visits and reports during the key periods between February and June next year.
The map shows where we visited on our day and also includes a couple of photos from a vineyard visit alongside Pagmat on Thursday 24th. We tried to visit a number of vineyards in a few key growing areas to give us a bit of an overall picture of that area.
Icer Family Vineyards
We started our trip off by stopping at the family vineyard of our colleagues Ozmen & Melike, as well as looking at their neighbours, located just North West of Turgutlu. Unfortunately, the rainfall and damages suffered during May meant the Icer family vineyard had been abandoned by their contracted farmer and they were not going to harvest anything this year. In comparison we looked at two neighbouring vineyards and whilst one showed some damages the other looked like a good typical vineyard, albeit the bunches and berry count per bunch certainly seemed down in comparison to other historical photos we have on hand from the area.
Alahidir Drying Point
Whilst driving we decided to stop at a drying area and inspect some material that had clearly been drying for a number of days. The farmer and the workforce had clearly done a very good job of removing damaged fruit before laying out to dry and as such the pictures show a fairly positive picture.
On the opposite side of Alahidir village to the drying area we stopped at 3 different vineyards in a mile stretch. The first two vineyards painted a very similar picture in terms of the amount of damage per vine, smaller than historical bunches and less bunches per vine than a typical year. These two vineyards had clear signs of rain/storm damage on the vines/leaves and the berries themselves were affected. Some berries were also showing signs of mildew and the following treatment with pesticide (the blue powder).
Alahidir Vineyard 2
Alahidir Vineyard 3
Out of the 2 vineyards we stopped at on the outskirts of Mersindere village we saw pretty healthy vineyards, bunches, bunches per vines and berries per bunch. Yes there were some damages spread through the vines but typically driving in this area we didn’t see anything too significant. We did note that in this area the Vineyards were typically much larger and well maintained than others.
Again we stopped at 2 vineyards and saw the worst conditions on our tour. Vineyards have clearly suffered extensively and damages are typically higher than other regions. Couple this with less development of bunches and significantly reduced berries per bunch this is going to be a challenging time for farmers in this region. Upon speaking to a farmer the storms during May significantly impacted what he could do and getting out to manage the vines plus apply pesticide was not possibly for a number of days. By this time the damage was done for him and his neighbours.
Karaoglanli Vineyard 1
Karaoglanli Vineyard 2
Upon making our way from one region to another of Gediz Valley closer to both Ozgur and Pagmat in Saruhanli. After passing through many Olive orchards we stopped just outside Halitpasa and this particular vineyard was the best of the day so far. Good bunches in terms of count, many bunches per vine and pretty much limited damage. If all the regions were like this we would be looking at a very healthy and sizeable crop, unfortunately this is one of the exceptions and not the rule.
As a very famous town, just north of Manisa, Saruhanli has a very important part to play as a large number of packers are based in this area. Both of our partners Ozgur & Pagmat have their factories here and have been operating very successfully for a number of years. Across the 3 vineyards we stopped at the overall picture was, in our opinion, much better than what we had visited during the rest of the day. Across the 3 vineyards we saw some damages yes but these were not as significant as other areas or as widespread. The bunch size and frequency per vine was also better than all other areas typically.
Saruhanli Vineyard 1
Saruhanli Vineyard 2
Saruhanli Vineyard 3
Pagmat Vineyard Visit - Saruhanli
Alongside our partner Pagmat we visited a vineyard harvest in progress and also to talk to the farmer about market conditions. Looking at his vineyard the overal bunches were of good quality, some with damages, and an average sized bunch. In comparison to what I had seen the day before it followed my thoughts that Saruhanli region had indeed not been as adversely affected as other areas.
When taking to the farmer about market conditions there was a very interesting discussion surrounding what was a fair price for the coming seaason given the increased labour costs the 35% increase in minimum wage from 1st August had inflicted upon him. Market conditions towards the end of the last crop were close to 30 TL per kg and he was looking for at least 65 TL per kg. It’s safe to say that even Pagmat’s representative raised an eyebrow at that valuation. The farmer also expected his yield to be about 600kg per hectre which was down slightly from last year but not significantly.
Across the various vineyards we looked at it is impossible to deny the fact that the coming crop is going to be significantly reduced compared to previous years. The further away we got from Izmir on the road towards Salihli the general condition of vineyards decreased and in comparison the area surrounding Saruhanli was clearly not as affected by damages. However, on every vineyard good or bad it was clear to see that bunches per vines and berries per bunch were not of the freqeuncy or size of previous years.
Over the weekend of 26th/27th August there were some localised rains in the region of Turgutlu towards Salihli, a large region that we visited on our tour. These rains are going to cause very different issues in terms of microbiological loads but there will be careful assesment of incoming crop by our partners as always. For the weekend of 2nd/3rd September there is some more rain forecast but this may not pan out as expected.
Pricing now in Turkiye is currently all over the place due to uncertainty with crop size, weather conditions, TMO involvement, unsold 2022 crop still distorting the market, and the increase from 17.5% to 25% on interest rate, which strengthened the Lira against USD pushing prices higher.
The 2022 crop certianly finished strongly. An unofficial crop estimate of 320,000 tonnes saw circa 340,000 tonnes registered in sales from farmers to packers or TMO. Of this figure 256,000 mt was exported to various countries, UK leading the way at just ove 64,000mt, and circa 30,000mt was used domestically by various parties including retail, alcohol production, school snack project and the earthquake project. So out of 340,000mt lets say 290,000mt was used and 50,000mt is carried over from 2022 into 2023 volume. With the carryover added to this years crop estimate at 215,000mt and we’ve got a total of 265,000mt, so short against what is potentially needed. What this doesn’t take into account is the significant carryover of stock from 2021 crop into 2022 which will more thsan make up the potential shortfall when you consider that increased prices in Turkiye will force users to look at origins such as South Africa, Iran and China. Please speak to us about Chinese fruit if you have some interest as we will be offering forward.
The market is currently trading at 42 to 44 TL per kg today depending on the raw material, which is a significant increase from this time last year 25 to 27 TL/kg. If we equate those prices into an export price with the present Lira/USD rate of 26 then we’d get between $1950 to $2050 FOB Izmir.These price levels are higher than what anyone has seen in the last few years and is going to be tough to stomach but the reality is this is going to be a difficult year with raw material availabilty being a key issue.
Farmers are delivering the early harvest in which is typically not the best quality as it’s been cut whilst the sugar content is not at the optimum level. Those farmers that can hold onto material will do so as they await any potential pricce announcement from TMO, such an announcement last year arrived in mid September. So logically we’ve got a couple of weeks to wait and see if they do enter the market, the latest feeling is that in a short crop year there will be no need for them to do so and questions remain around whether they have the money to continue doing so.