Market Report December 2019

The Market in General

Crop results of the year now ending allow a good supply, however with some important product groups demanding attention. Ocean freight rates have risen considerably recently, also due to the introduction worldwide of low sulphur fuel oil (LSFO) with a max level of 0.5 % sulphur (IMO 2020). This is a decisive step of the international shipping industry to improve its ecological footprint. Aspects of sustainability along the value chain generally are becoming increasingly important.

Market Info and Recommendations

Tuna: Skipjack has dropped to a 10 year low and has stayed there since November. Bangkok is quoting USD900/t, Manta followed at a premium of approx. USD200/t. This isdue to good catches in the Pacific, despite the recent fishing closure in the eastern Pacific. The bottom seems to have been reached as we see indications for the market to turn with the beginning of next year. Availability of fish caught fad-free and coming from origins exempted from EU import tax (especially the Philippines and Ecuador) is quite limited. Many trawlers are now scheduled for their annual maintenance dry docking. Demand for MSC certified tuna is growing constantly at a price premium of more than 20 % above normal catch. We do recommend covering tuna for the whole of next year.

Pineapple: This should be peak season of the winter crop in Thailand, but only half of the approx. 8,000t of fresh pineapple usually available for a decent utilization of the factories capacity are being delivered. Thailand will record a “historical" low with only 1m t of fresh pineapple delivered for industrial processing. In 2018 this stood at 1.7m t. The crisis will continue, clearly a consequence of reduced cultivation and the neglect of fields during the period of ruinously low prices in 2018. This was further aggravated by the drought in the first half of the year, which has also affected the flowering for next years summer crop. The price of raw material currently stands at approx. 9 Baht/kg (approx. EUR 0.24), but willrise further. It reached 14 Baht/kg during the last cycle in 2016! Raw material is short also in Kenia, however, the Philippines as well as Indonesia are processing according to plan. However with Thailand being the dominant player in the pineapple canning market, the situation will very likely get worse thus we do recommend to cover until mid of next year at least. We are also offering pineapple pieces organically certified.

Mandarins: As we could convince ourselves during a recent visit to China the crop results are seriously down by approx. 50 % in the provinces of Hunan and Hubei. Further easthowever in Zhejiang the crop is going well at last year’s level. Processing will continue until Chinese New Year end of January. The state of the Chinese canned mandarins industry remains difficult: rising cost, lack of labour, penalty duty in the US, "anti-dumping" levies imposed by the EU, … Consequently, there is little investment going into this business. Spain is reporting less volume of Satsumas compared to last year. Overall the market is firm as supply will be scarce, especially for whole segments. We are urgently recommending to book for the whole of 2020! Turkey may be an alternative for less demanding specifications and "broken segments” , but prices are moving up there as well. We are also investigating possibilities from Peru; however, the “Murcott” variety being used there is slightly bitter and thus less suitable for industrial use.

Dates: A very good volume of Deglet Nour from the recent crop in Northern Africa, however, the extreme heat in July and August resulted in a high share of small fruits. For larger categories usually required prices remain at last year’s level. We do recommend to book requirements now in order to make sure that orders can be executed before the start of Ramadan end of April. We offer a number of varieties of dates, e. g. Medjool, and we are also offering paste, puree and syrup. All these items are available organically certified.

Tomato products: The market remains stable after prices went up quite considerably in the cause of the last crop. Quantities unsold are quite limited and we see a strong likelihood of prices moving up further during the next nine months until the next crop is available. The EU quota for processed tomato products from Turkey, e. g. for sundried tomatoes, will remain unchanged for 2020. The volume of 8,900 tons is very likely to be exhausted again within a few months and will thus not be sufficient to cover even only parts of the new crop. Once the quota is exhausted, a 14.4 % EU import duty is charged. We are happy to coordinate with you best possible. We carry a number of tomato products also organically certified.

Peppers/Peperoni: The crop in Turkey finally ended with a normal result, however, due to strong demand, also locally, unsold quantities are very hard to find. Supply of red, mild peperoni is continuing to be tight, Egypt should be able to help with the new crop being available end of May. IQF peperoni from Peru are being shipped as planned, the same applies to cherry peppers from South Africa where the new crop will start in February. However, Pequillo and also Jalapeño peppers in Peru have been seriously affected by pests and our partner is arranging for an additional planting. Other origins of Jalapeño peppers, e. g. Egypt, Turkey and also China, are still having difficulties to properly control the heat (Scoville).

Sweet corn: There is virtually no supply coming from Thailand after the recent crop failure during the peak months of August and September. We have organized for some supply from alternative origins. "Anti-dumping" duties imposed by the EU on sweet corn from Thailand will continue to be applied also after the current review, thus putting extra cost on these imports. The supply situation for baby corn from Thailand has improved.

Olives: Overall the price level is going up from the crop currently underway around the Mediterranean. Especially Greece (the region of Khalkidhiki), but also the south of Italy are suffering from extreme weather with even hail in the summer. The crop in Spain, being the most important supplier of table olives by far, has just ended with results below last year. Whilst bigger calibres and some of the varieties from Greece and Italy are becoming more expensive, Spain is offering at last year’s level, despite the lower yield. Their business to the USA has been seriously affected by tariffs imposed on Spanish olives by the US government recently. Morocco is expecting a good result in contrast to Spain, however prices are going up there due to the growth in exports to the USA compensating the volume which is no longer coming from Spain.

Kidney beans: Very tight supply after an extremely bad crop in the USA/Canada due to verywet weather and early snow. Similarly, the results in China were disappointing and thus quotations have been going up rapidly since October. We expect this to continue during the next months, also as products from other origins often do not comply with "canning quality" and are also critical with regard to residues.

Coconut milk: The market is still moving sideways, which also applies to organic quality. The glut of raw material however has now been processed; we see the market stabilizing and moving up soon. This is still a good opportunity to cover long-term.

Peppercorns, green: The harvest has started in the south of India. We expect a good result similarly to last year at a comparable price level. In addition to various sizes of cans and canisters we are now also offering green peppercorns in brine in 10 kg vacuum bags. We do offer this also in organic quality.

Sustainability: We are in the process of reviewing the main aspects of sustainability along the value chain of our business. The aim is to make this an integral part of our value proposition to our business partners. This project is following our Code of Conduct.



Issued: 06 January 2020



Code of Conduct - Sustainable