half year outlook - IEG Vu€¦ · slumps. Tuna fishing is slack because of the low prices currently being asked for raw tuna. And in dried fruit and nuts, inclement weather has hammered

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half year outlook

© Informa UK Ltd 2015 I FOODNEWS® Half Year Outlook 3www.foodnews.co.uk

CONTENTS / EDITORIAL

half timeWe are now halfway through the calendar year. In the northern hemisphere, harvesting is

under way in some countries of the tomatoes, the peaches, apricots and many of the summer berry fruits. The winter root vegetable crops in the key growing areas of northern Europe

have yet to be harvested.In the southern hemisphere, it is the middle of winter. The autumn fruits, the apples and grapes, have

been harvested and processed and the major processing work is centred on nuts.In this supplement, the first of its kind to be published by FOODNEWS, we are painting a picture of

where the processed fruit and vegetable industries are at this mid-point, and what is likely to happen in the second half of the year including, critically, in the early autumn, when Anuga, this year’s key food exhibition, takes place.

In this writer’s experience, there has never been a year like 2015. On fruit juices, orange juice production has drastically declined in Brazil and Florida, but the large Brazilian FCOJ inventory is taking far longer to whittle down because demand in the developed markets is so weak.

For apple juice, the story is one of the once-mighty Chinese industry being hammered in the US market, a few years after it suffered the same fate in Europe. For the first time since the mid-1990s, European apple juice manufacturers have come storming into the US market, and the questions now are whether they can stay there – FOODNEWS thinks they can, in the short term at least – and whether China is going to rationalise its 1.5 million tonne capacity juice concentrate industry – and FOODNEWS thinks it must.

China is also suffering in the processed tomato sector. Not so long ago, it looked as if China was lining up to take on the Californian and Italian industries (it had a production capacity roughly equivalent to California’s) – but that processing capacity has been slashed by about a third in recent years. Plants have closed.

However, China is capitalising on the African demand for cheap tomato paste. European processors simply cannot match China’s prices. At the recent FOODNEWS tomato forum, it was suggested that the industry is morphing into a two-tier format, with European and US companies (and, to an extent, some Latin American) providing high-quality and value-added products, backed with premium service, while China looks after the budget end of the sector.

The canning industry is having trouble securing sufficient quantities of pineapples, as Thai production slumps. Tuna fishing is slack because of the low prices currently being asked for raw tuna.

And in dried fruit and nuts, inclement weather has hammered Turkish hazelnuts and dried apricots.All this is being set against a background of international uncertainty as a new Cold War seems to be

growing. The West last year imposed sanctions on Russia, which responded with an embargo on Western supplies of fresh fruits, vegetables, meat and dairy products. Last year, Russia was actively seeking to source replacement food items from other suppliers, such as India, Latin America and China, but has discovered, to its cost, that setting up long-term high-volume contracts is not as easy as it might seem. And European supplies have found their way into Russia anyway, almost certainly with the knowledge of the Kremlin, which has probably seen that the only alternative is the unacceptable prospect of a return to Soviet-era style empty supermarket shelves.

Russia’s economy has crashed. Imports have become much more expensive, inflation is rising, food inflation is rising even faster, and the country’s income has dwindled as oil prices have fallen. How a newly nationalistic Russia reacts to what it sees as a perceived threat from the West remains to be seen – but it will not be pretty.

And in Europe, economic woes persist in Italy, Spain, France and especially Greece. Greece has already swallowed EUR320 billion (USD360 bln) worth of loans from the EU. The chances of this ever being paid back are zero, but the EU manages to keep fudging some sort of temporary fix month after month. It would have been less painful, and cheaper for all concerned, if Greece had quit the euro a year ago. Greece is presently expected to default on a EUR1.5 bln repayment precisely as this supplement is published, and what will happen then?

If or when Greece leaves the euro, and possibly the EU as well, it will be able to devalue its new currency (whatever that may be) and put its economy back on track as its products (and its tourist destinations, seeing as tourism forms such a large part of Greek foreign earnings) become cheaper. The interim period will be painful, because import costs will soar, but it is hard to see how they could be more painful that what Greece is already suffering.

In this supplement, we are making some forecasts of our own. These may prove wide of the mark, but we hope not. We shall see just how accurate they are at the end of the year. Enjoy the supplement. n

CoNteNtS

Neil murray Julian Gale

Davide Ghilotti

editor Neil murrayEmail: [email protected]

Deputy editor Julian GaleEmail: [email protected]

Specialist reporters Davide GhilottiEmail: [email protected] ruibalEmail: [email protected]

advertising sales Ben WatkinsEmail: [email protected] VeldenEmail: [email protected] Jewels [email protected]

To see how a subscription to fooDNeWS can benefit you and your organisation, contact:Gary Ward for a FREE web demoTel: +44 (0) 20 7017 5815Email: [email protected]

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lorena ruibal

fruit JuiCe04 oN the eDGe06 GettiNG there

DrieD fruit & NutS10 a promiSiNG Start

oN piStaChioS12 a mixeD treND for Chile18 a market full of

eaSterN promiSe

fruit20 reaDy to rumBle21 tomato traDe upDate23 a Berry NeW Crop

CaNNeD fooD24 loW Supply, hiGh priCeS26 SloW CaN-CaN

4 www.foodnews.co.uk © Informa UK Ltd 2015 I FOODNEWS® Half Year Outlook

The return of European AJC processors to the US market is the biggest

earthquake to shake the global fruit juice industry for at least a decade, maybe more.

European AJC suppliers, spearheaded by Poland, have taken advantage of bountiful supplies and low prices this year to pile into the US market with product that comfortably under-priced that from China. There was probably a certain degree of chauvinism as well – Chinese food products have had a bad press in the US in recent years and the emergence of a number of alternative suppliers might have reassured some buyers and

consumers. Ultimately, though, cash is king and if European product was cheaper than Chinese, that was enough for most, and they bought it.

To compound China’s woes, the US itself had a bumper apple harvest and record volumes of fruit were sent for processing.

Chinese AJC exports to the EU, in the last few years, have dwindled away to nothing. Chinese juice was expensive anyway, and when the duty was raised to 30% from 25.5% (with the loss of the Most Favoured Nation exemption), that proved to be the final straw. The US and Russia were the only volume markets that China had left.

At the time of writing, Chinese AJC export data is available to the month of April, which is precisely two-thirds of the way through the season, and China’s exports are down by some 111,000 tonnes over the season (265,507 tonnes compared with 376,422 tonnes last season). The big question is where Chinese exports are going to finish.

At the start of the season, FOODNEWS commented that estimating Chinese exports would be hard, because the production figures we were hearing were varying. However, we settled on an estimate of 360,000-375,000 tonnes, down from some 524,000 tonnes in the 2013/14 season. Again, at the time of writing, it is hard to be more accurate, because there is evidence that China managed to shift some product in May, while Europe was waiting for fruit to be released from storage. Chinese prices were incredibly low, lower than European or Latin American, but whether Chinese processors managed to sell any AJC, rather than spark a lot of comment and upset in the market, will only be revealed after this supplement is finished.

Given the decline in the season’s exports so far, FOODNEWS thinks that the full season figures for China will be at the upper end of its estimate – taking the average fall so far and applying it to the next four months gives a figure of 372,000 tonnes. However, we will stick to our figure of 375,000 tonnes for the moment.

The next big question is what is going to happen this season. Will Europe continue to sell to the US market? The short answer is yes. At the time of writing (again) it looks as if Europe is going to have another good apple harvest.

this year’s incursion into the uS by european aJC suppliers has been a nightmare for China. and the signs are that poland and other origins will be equally active next season.

FRuIT juICE I appLES

“Given the decline in the season’s aJC exports so far,FOODNEWS thinks that the full season exports for China will be at the upper end of its estimate.We will stick to our figure of 375,000 tonnes for the moment.”

BY NEIL MuRRAY

oN the eDGe


People have been telling FOODNEWS that you cannot simply rely on the early blossom, and you have to wait for the fruit set, but the frost danger in Poland has passed, and just about everyone has been saying that the conditions so far this season have been ideal.

Two other factors will bolster Europe’s drive to export next season. The first is that there are still a lot of fresh apples in store in the EU, a legacy of the Russian

embargo on fresh fruit and vegetable imports from the EU. At the time of writing (once again…), Poland has managed to clear its fresh apple stocks, to everyone’s surprise, but substantial inventories still remain in Italy and other countries. Although Europe has been able to export more fresh fruit than was originally thought possible (it looks certain that a lot has gone to Russia through the ‘back door’), there will be

substantial apple stocks left over by the start of the new season. Even though Poland has managed to clear its fresh apples, there will probably be more large stocks coming in this autumn, and Russia has just confirmed that it has no immediate plans to lift its embargo. From what happened this year, Poland will probably be able to handle most of the fresh apples if it continues its policy of discreetly exporting the fruit to other countries which

re-sell it to Russia. At present, Polish AJC prices

are around EUR1.05-1.10 per kilo (USD1.14-1.20/kg). That equates to around USD800 per tonne of AJC: not cheap, but very close to the average paid by Chinese processors early in the season (CNY700/tonne, according to FOODNEWS sources). Unless something completely unexpected happens, FOODNEWS no longer believes that the AJC price is likely to fall as people try to clear fresh fruit stocks before the new season starts. There are still some unsold stocks here and there, everyone is covered, and the price may dip at the start of the season, but not by much, if at all.

The US will be quite happy to continue buying European AJC. Already there are reports that the USA’s (hard) cider processors, who are creating an entirely new and booming market for apple juice, have signed two-year supply contracts with European AJC makers. Interestingly, and perhaps unexpectedly, the cider industry has proved quite happy to buy higher acid European AJC, because it makes better cider than sweet.

So where does this leave China? The key figures are these: a carry-over from last year of 80,000 tonnes; an estimated AJC production of 380,000-400,000 tonnes and domestic consumption of 60,000 tonnes. Chinese sources were reckoning that this would result in a negative carry-over into next season: all stocks cleared, but China was talking about exports of 412,000 tonnes, and that is not going to happen. China should go into the next season with a reduced carry-over of around 50,000 tonnes, which is manageable. However, what happens to this autumn’s production depends entirely on how many processors will open their doors in August, and that is a complete unknown. There will be casualties. n

appLES I FRuIT juICE

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CHINESE AjC PRICE (uSD/TONNE, FOB)

CHINESE AjC EXPORTS, jANuARY-APRIL (TONNES)2010 2011 2012 2013 2014 2015

uS 113990 120890 87505 102030 83966 54448

japan 13333 19931 23466 17809 19529 20416

Australia 13480 10452 9649 8693 6231 8528

South Africa 9087 4931 8704 13402 10284 7732

Canada 13253 8826 35894 16726 12706 4229

Turkey 3498 0 220 814 1131 3194

Germany 2973 11973 220 5680 990 3158

India 1079 1287 1932 2547 1640 1835

Saudi Arabia 1583 1645 1015 1641 2324 1814

Russia 21626 33483 14686 11140 10236 1694

Taiwan 929 1237 770 730 974 1475

Thailand 640 861 1039 1207 1302 1143

Israel 2085 2430 1025 2397 888 1032

South Korea 1207 832 825 1103 998 930

Netherlands 10357 26271 1540 1914 1157 919

Others 9929 13070 7396 9512 6406 5695

Total 219049 258119 195886 197345 160762 118242SOURCE: GTIS, China Customs

Source: FOODNEWS


Despite everything, despite the falling stocks in Brazil, and

despite the reduced production figures, the demand side of orange juice is so poor that the price has hardly moved all year.

Brazil’s OJ industry could see its carry-over juice inventory fall close to the technical level of 300,000 tonnes of FCOJ equivalent in mid-2016, according to new simulations unveiled in Brazil. This would be a reduction of some 50,000 tonnes from the inventory recorded in late 2014.

The estimates published by Brazil’s Advanced Research Centre in Applied Economics (CEPEA) reveal that in July 2016 the Brazilian orange juice industry will have either 237,000 tonnes of FCOJ (based on 240 million boxes of processed oranges in 2015/16), 276,000 tonnes of FCOJ (250 mln boxes) or 315,000 tonnes

(260 mln boxes).“If these projections

materialise, the national OJ inventory would fall to levels very close to the strategic threshold of 300,000 tonnes […] which could help sustain prices,” explained CEPEA.

“The general expectation is for a harvest that will not be higher

than the harvest of 2014/15, considering that many growers have left the business, reduced investments and the effects of the 2014 drought.”

CEPEA also announced that one industry major is signing supply contracts based on fruit prices ranging between USD4.50-5.50 per box. Some contracts

include a provision that will allow growers to receive a supplement based on the juice sale price.

Meanwhile, US retail sales of orange juice are falling by over 8%, according to the A C Nielsen figures, presented by the Florida Department of Citrus. For the season to date, retail sales are

Brazil’s fCoJ inventory has taken longer to whittle down than was originally expected, but orange juice supply and demand are getting closer to equilibrium.

FRuIT juICE I ORaNGES

GettiNG there

BRAZILIAN FCOj EXPORTS jANuARY-APRIL (TONNES)2010 2011 2012 2013 2014 2015

Belgium 151395 140198 139454 131214 81304 95404

Netherlands 74431 68234 51558 64059 56004 84777

uS 58689 17265 12533 82286 50923 67958

japan 9354 28297 33770 21276 30141 18236

China 16436 22364 12200 13691 13565 9012

Australia 3510 6838 7453 5715 9882 7685

Puerto Rico 2009 3116 1644 6026 2878 5095

Israel 921 0 4998 2409 3800 3182

Chile 1367 1694 2106 2049 2273 2027

Indonesia 371 174 444 461 1176 1646

Switzerland 12312 4761 14561 7115 7892 1613

Saudi Arabia 573 249 297 177 1295 1495

Others 27827 29622 25838 19771 14622 10568

Total 359195 322812 306856 356249 275755 308698SOURCE: GTIS, SECEX

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2013/14 season 2013/14 season

TOP FIVE ORANGE juICE MARKETS (‘000 TONNES, FCOj 68 BRIX EQuIVALENT)

SOURCE: CITRUS BR

BY NEIL MuRRAY

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FRuIT juICE I ORaNGES

down to 316.97 mln gallons (344.68 mln gallons) and values are down 3.5% to USD2.067 billion (USD2.141 bln).

The key question is this: what

will be the US retail sales figure for the current season? At the time of writing, there are five four-week periods yet to run. Last year, US retail sales totalled 525

million gallons. FOODNEWS thinks that this season will show a fall to below 500 mln gallons. In our Global Outlook at the end of last year, we predicted a final total of 480 mln gallons, and we still think that the final figure will not be too far from that; perhaps a few million gallons higher.

Brazil’s orange juice industry association (CitrusBR) said the country’s processors would produce almost 30% less OJ this season, if the latest 278.9 mln box harvest estimate for 2015/16 announced by Brazil’s Citrus Production Defence Fund (Fundecitrus) proves correct.

Total juice production in São Paulo and Triângulo Mineiro will reach 810,700 tonnes of FCOJ equivalent, representing a decrease of 28% from the 1,122,000 tonnes of FCOJ equivalent the industry estimates it produced in the previous 2014/15 season.

“For the 2015/2016 season, approximately 30% of the blossoming happened in fruits of third and fourth blooms. It means a substantial part of the 2015/2016 crop season production will be of late fruits or off-season [fruits], characterised by low juice content

and yield,” said CitrusBR.Towards the end of last year,

Brazil reckoned that its FCOJ exports would total 910,000 tonnes in the 2014/15 season (July-June). Brazil exported 868,000 tonnes in 2013/14, and currently its exports are running about 12% higher than they were last year, so Brazil’s forecast could well be conservative: at the present rate, the final figure could be around 970,000 tonnes, which would be of massive help in reducing the country’s inventory.

Despite starting the season with a smaller carry-in, Florida is now sitting on 51.1 weeks’ supply, according to the latest data released by the Florida Department of Citrus (FDOC). Worryingly, the stocks of NFC orange juice have also increased. Again, despite a reduced starting inventory compared with last year, a tripling of imports and a 13.7 reduction in movement to 274.7 mln lbs (317.3 mln bs) combined to push up the carry-over (which was actually static in volume terms) to 31.2 weeks’ supply (26.6 weeks’ supply).

Although production is declining, the fact remains that movement and demand are declining even faster, and increased imports into the US of both FCOJ and NFC juice are making up the difference. First quarter NFC juice imports into the US are up by 23%.

Q1 FCOJ imports are 19% down, though, and as the import/export data is running about a month behind the FDOC’s supply data, it is possible that this will show up in the FDOC’s figures next month.

The futures market has been declining steadily since the start of the year, but has lifted on news of the smaller Brazilian harvest. It will still be difficult to push through price increases while

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TOP FIVE ORANGE juICE MARKETS BY CONSuMPTION (LITRES PER HEAD ANNuAL)

SOURCE: CITRUS BR

Experiencedoesn’t grow

on trees.

We have cultivated ours since 1936. That’s why we are among the market leaders for natural fruit juice concentrates and beverage compounds. Our commitment to flexibility, sup-ply security and best service are as natural as our crops.

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demand remains so weak.Globally, the major markets

are still declining as orange juice consumption falls. Orange juice is no longer considered a ‘healthful’

drink: it is considered full of dangerous sugar. The Western habit of drinking orange juice at breakfast time (a consumption pattern not seen in some other

markets, notably China) is also changing. Fewer people are sitting down to a proper breakfast before going to work: instead, they grab a coffee and perhaps a

pastry, croissant or baguette on their way to work, and eat this at their desks.

In volume terms, the US has gone down from over a million tonnes of FCOJ consumed in 2003 to 729,000 tonnes in 2013. China’s growth has been impressive in percentage terms, but the fact remains that orange is not a popular flavour in China (snow pear is the number one) and pure juice consumption in the country is small: the market lies mainly in juice drinks, with a small (10% or less) fruit juice content.

Supply will balance demand, or sink below it, and the inventories will be whittled away, but we are unlikely to see any big pice increases until 2016 at the earliest – and even then, price hikes could depress demand further. n

ORaNGES I FRuIT juICE

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FLORIDA FCOj WEEKLY INVENTORY, 2014/15 SEASON (MLN POuNDS SOLIDS)

SOURCE: CITRUS BR


DRIED FRuIT & NuTS I pISTaChIOS

Over the January-March 2015 period Iran has recorded the strongest

percentage gain in its pistachio shipments.

These were 25.6% up over the three month period at 42,695 tonnes.

For the US the gain was more modest at 3.3% and the overall volume is about half of that of Iran at 22,675 tonnes.

For the Q1 2015 period specifically it has to be borne in mind that there was a port strike across the US West Coast and this hampered exports to a degree.

In the full 2014 calendar year, Iran exported 165,372 tonnes of pistachios, a hefty 56.5% increase from the 105,653 tonnes it shipped in 2013.

The US 2014 sales of the nut dipped 15.3% to 115,783 tonnes from 136,816 tonnes in the previous year.

European industry sources view the differential in volumes between the two origins as being partly the result of the US having much higher pistachio prices than those of Iran.

Ali Amin, president of Primex International Trading Corporation, acknowledged that this is likely to be playing a part. “The difference in price between the two origins is very big,” he remarked.

However, the potential impact of high US prices was down played by Jim Zion, managing partner of Meridian

Growers in California. “Prices are not high relative to

the supply/demand scenario,” he said. “I suspect it (the lower US volumes versus those of Iran) has more to do with the strong dollar making the relative price higher and the devastating port slow down/strike that started in November 2014 and did not get resolved until March. I know for us, our volumes are down specifically in that period due to the labour issues on the West Coast.”

European traders also feel that consumers, particularly in Europe, have developed a preference for the flavour profile of Iranian pistachios over those from the US.

Ashkan Mossafaian of Rotterdam importer Pistachio Investment said another factor is that industry buyers have seen sales improve when they switch to Iranian pistachios from those of the US.

Previously, they were deterred by the more stringent aflatoxin testing regime required on Iranian pistachios over US material but now they are prepared to overlook this on the basis of the more attractive price of Iranian product and the potential for higher sales.

In recent years Iran has proved very effective at offsetting the effects of European trade and banking sanctions. These were imposed by the UN, EU and several individual countries in an attempt to prevent Iran developing military nuclear capability.

Iran insists its nuclear programme is exclusively

peaceful. Recent further developments in the area of an agreement to limit Iran’s nuclear programme in exchange for lifting sanctions mean that there is now a June 30 deadline to conclude whether cooperation and the end of sanctions against Iran will finally take place.

Iran still achieves some sales into European destinations but its biggest markets by far are now Hong Kong, the United Arab Emirates (UAE) and Vietnam. This is evident when looking not only at the annual figures of the last three years but also those for the respective first three months of each year.

In Q1 2015, Iran’s shipments to Hong Kong surged 76.9% to 12,559 tonnes.

Mossafaian told FOODNEWS: “The most solid market for the Iranian pistachio has been again China this year.”

Some doubt has been raised over potential sales to China over the coming months after the country tightened up controls against smuggling.

Sales to the UAE gained 16.9% in Q1 2015 to 6,252 tonnes.

Mossafaian observed that the UAE itself does not consume a lot of pistachios so most of the volume would be re-exported elsewhere and most likely to China.

Middle East destinations as a whole feature prominently in Iran’s pistachio exports.

In the case of Iraq – which is the seventh biggest market – the quantities sold are consumed in the country itself and not re-exported. “These are the traditional pistachio markets for Iran – neighbouring countries,” Mossafaian explained.

Ali Saber-Sheikh of the London office of Iranian exporter Hassas said: “Traditionally Iraq loves Iranian pistachios.”

While Europe purchases mainly 28-30 and 30-32 sizes Iraq tends to prefer the larger counts.

In addition, Mossafaian viewed sales to Vietnam as likely to be sold on to China. The figures from GTIS/Iran Customs indicate Q1 2015 sales of 5,078 tonnes to Vietnam, a massive 123% gain from Q1 2014.

“Somebody has found a gap to get the products from Vietnam to China,” Mossafaian said.

Germany ranks as the fourth biggest market for Iranian pistachios, although again, it is likely that at least some of the volumes sold here were transshipped elsewhere as the country contains a number of the main ports that handle Iranian pistachios and is well known

iran and the uS have both seen a promising first quarter of 2015 on pistachio exports and look set to achieve similar or higher volumes for the whole of this year.

BY juLIAN GALE

a promiSiNG Start oN piStaChioS


pISTaChIOS I DRIED FRuIT & NuTS

as a hub for onward sales. Turkey is next on the list but

this destination also sells on to other countries.

“Turkey doesn’t allow anything to come into its own markets,” Mossafaian remarked. “Anything going to Turkey is put on a boat through Mersin to go to Europe.”

India is a developing market and shipments here over Q1 2015 gained 69.2% to 1,744 tonnes.

“A lot of kernels go there. India is maybe in the future going to be as big a market as China,” Mossafaian suggested.

“This is the reason we can cope with a decline in Europe (sales to) because these new markets are actually absorbing a lot of product,” he noted.

Saber-Sheikh felt that some of the Iranian shipments to Hong Kong are being sold on to India. He recalled that five years ago India had purchased only negligible amounts but it is now looking to be an expanding market.

Russia has also become an important market in recent years, although the country’s economic troubles have reduced the volumes in 2013 and 2014 and over Q1 of this year.

Mossafaian noted that traditionally Russia and Europe do not purchase heavily in the first quarter of any year and the norm is to see stronger off-take in the final quarter of the year in the run up to Christmas.

China in contrast is a major buyer over the Q1 period as it looks to cover for its New Year.

In the case of the US, Belgium is ranked as the top destination for Q1 2015, ahead of the Netherlands and Hong Kong, which was the leading market for the whole of 2014.

The prominence of Belgium is indicative of the fact that Paramount Farms, the US’s biggest exporter, uses Belgium as its main port hub and chooses to re-export from here.

Another major US exporter uses

the Netherlands as its re-export point, which explains in part the high ranking of the Netherlands in US total pistachio sales.

Zion of Meridian Growers said that he would expect that most of the product shipped to Belgium and the Netherlands was packaged and consumed in Europe.

Similarly, Amin of Primex International noted that there are a couple of large importers, roasters and distributors in Belgium and the Netherlands that distribute throughout Europe.

Zion added: “We are hoping for a shipment level that equals or exceeds last year. However, we have seen some slowdown in China due to the recent crackdown on smuggling by Chinese consumer authorities. As we get a clearer picture on the 2015 crop and the total supply situation, I do expect demand to come back. Also, the strengthening euro is helping in Europe as well.”

Amin said he expects a similar

pace of sales ahead to that recorded over Q1 of this year.

Zion viewed the US pistachio industry as satisfied overall with the volumes sold into Europe even without the added benefit of Russia.

Sales into the Chinese market are expected to normalise in time for the moon festival in September.

“Many buyers are taking a wait and see attitude towards additional purchases due to uncertainty of the 2015 crop size and what our carry-over will be from the 2014 crop. Combine this with the ongoing negotiations between the US, France, UK etc. and Iran over the nuclear issues and the situation is unclear. After 25 years in this business I know one thing buyers don’t like is uncertainty,” Zion concluded.

On June 1, France and Iran signed six cooperation agreements on a variety of areas in the field of agriculture and it remains to be determined whether this will have any impact on the pistachios side. n

IRANIAN FIRST QuARTER PISTACHIO EXPORTS 2013–15 (TONNES)2013 2014 2015

Hong Kong 10458 7098 12559

uAE 5411 5346 6252

Vietnam 885 2277 5078

Germany 3013 3438 3262

Turkey 478 2876 3254

India 1573 1030 1744

Iraq 1050 1549 1560

Kazakhstan 1102 4803 1107

Saudi Arabia 412 577 889

Lebanon 1112 632 888

Pakistan 371 644 795

jordan 256 115 584

Netherlands 130 21 480

Spain 46 50 478

Russia 2528 526 382

Thailand 4 24 322

Afghanistan 191 303 318

Kuwait 211 199 308

uzbekistan 114 140 181

Italy 37 119 156

Others 3343 2223 2098

Total 32725 33990 42695SOURCE: GTIS/Iran Customs

uK FIRST QuARTER PISTACHIO EXPORTS 2013–15 (TONNES)2013 2014 2015

Belgium 3560 3001 5461


Hong Kong 7242 2384 2077

Germany 1808 1996 1884

France 1040 1056 1152

Luxembourg 1200 120 913

japan 846 699 848

Israel 760 648 736

China 1401 602 626

Italy 574 795 609

Australia 768 838 547

Spain 839 1024 538

Canada 613 585 495

Saudi Arabia 202 200 330

Switzerland 102 214 319

uAE 720 404 287

South Korea 243 329 259

Egypt 241 277 256

uK 344 213 239

Thailand 264 101 223

Others 3555 3484 1584

Total 28481 21933 22675SOURCE: GTIS/US Customs


In the first three months of this year Chile has seen its global sales of raisins (dried

grapes) decline 11.2% from those of the January-March 2014 period.

Customs data shows that the South American country exported 7,019 tonnes of raisins in Q1 2015 compared with 7,904 tonnes in Q1 2014.

The UK was the top destination over the 2015 period at 977 tonnes, 5.6% up from the volumes seen in Q1 2014.

Colombia and Mexico were the second and third largest markets respectively, although shipments were lower to both these countries.

Francisco Rivera Koeppen, general manager of Dried Fruit Valley, observed that Colombia prefers to purchase from

Argentina at the moment as the latter country is offering at very low prices, particularly on medium flame raisins.

Chilean Q1 raisin sales were also down to the key transshipment destination of the Netherlands in the first three months of this year.

The US showed a slight upturn in its off-take but shipments to Russia plunged 69% to 353 tonnes.

Marcello Malfanti, international department manager at Chilean company Frutexsa said the first quarter of this year was “almost dead” with no demand at all. He said that this could be largely attributed to the weakness of the euro against the US dollar.

Similarly, Koeppen observed that sales to Russia and Europe are very slow so far this year due

to the rate of exchange between the euro and US dollar.

However, on the positive side, Koeppen viewed Asian countries and the United Arab Emirates (UAE) as having more demand this year.

The official GTIS/Chile Customs data for Q1 certainly confirms that there is a promising level of interest from Asian markets. However, the UAE itself is way down the list at only nine tonnes acquired

Malfanti added: “The second quarter looks better but the pace is still below my expectations. The next ones should recover since we are seeing some Russian recovery.”

Koeppen said that UK purchases on Chilean flame raisins have been very slow so far this year and it was hoped that there would be a general upturn in demand from Europe for jumbo flames over the coming months.

He recalled that last year Chile had a leftover stock of 10,000 tonnes of raisins as it faced price problems with the large output in the US meaning that Chile could not be price competitive.

“Prices in general for golden flames and Thompson raisins are 10-15% less than last year at the moment,” he explained.

The Q1 figures show that Venezuela purchased 241 tonnes in the 2015 phase, 56.4% down from the 2014 period.

Koeppen noted that Venezuela buys its large volumes from September to October for the Christmas season.

He also pointed out that Chile as a whole has less volume of fresh grapes for raisins production this year. In terms of flame raisins specifically, the quantity is down by around 20% and he forecast that output on

Chile has seen a good start to 2015 on its prune exports but shipments of raisins and walnuts are down from year-ago levels.

DRIED FRuIT & NuTS I RaISINS & WaLNUTS

“The second quarter looks better but the pace is still below my expectations. The next ones should recover since we are seeing some Russian recovery.”

BY juLIAN GALE

a mixeD treND for Chile

Continued on page 16


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DRIED FRuIT & NuTS I RaISINS & WaLNUTS

this variety would amount to 55,000-60,000 tonnes this year.

Chile’s total raisin exports in 2014 reached 66,020 tonnes, which was only 1.7% down from the 2013 volume of 67,154 tonnes.

Meanwhile, in prunes Chile recorded a 5.9% gain in its exports in the January-March 2015 period to 5,902 tonnes.

However, in the first three months of 2013 Chile shipped the much larger volume of 9,373 tonnes.

Last year’s crop was reduced by frost damage so the country is still in the process of staging a recovery from this.

Its top three destinations for the Q1 period were the UK, Egypt and Poland.

The emphasis shifts when assessing annual export statistics though, with Russia, Mexico and the US as the leading three markets.

As seen in raisins, exports to Russia declined in the first quarter of this year, which probably

reflects Russia’s currency problems. These volumes dropped 64% to 409 tonnes.

Contrasting with this, Spain and Italy showed significantly higher interest.

Chile’s shipments to the US surged 514.8% to 191 tonnes in the first three months of 2015.

In walnuts, Chile has recorded a slower start to 2015, with overall shipments running 43.3% behind in the January-March period at 821 tonnes.

Brazil, Germany and Switzerland rank as the biggest three markets for the 2015 period, but on an annual basis for 2012-14 Turkey, Italy and Brazil are the top three destinations.

In calendar year 2014 Chile achieved major success with sales into Asia and this pattern is expected to continue this year.

Last year, strong promotional activities were carried out in China and Korea, including sales points actions, seminars targeting importers and bakeries, advertising in specialised media

and presence in trade shows, among other activities.

GTIS/Chile Customs data shows that shipments to South Korea advanced 62% to 2,166 tonnes while those to Hong Kong eased 16.9% to 1,670 tonnes.

In late May, Andrés Rodríguez, chairman of the Chilean Walnut Commission trade association, said: “The work done in 2014 was

very pleasing in terms of promotional work in key markets like China and South Korea. The perspectives for this year are high export volumes, despite the difficult situation of the world’s economy, especially because of the devaluation of the euro.”

Output is forecast to exceed 62,000 tonnes this year, 26% more than in 2014. n

CHILEAN FIRST QuARTER PRuNE EXPORTS (TONNES)2013 2014 2015

uK 345 482 623

Egypt 399 400 618

Poland 1127 364 524

Germany 675 268 435

Russia 2639 1137 409

Spain 335 126 396

Vietnam 154 178 368

Italy 163 59 353

Mexico 581 260 347

Brazil 297 268 263

uS 0 31 191

Australia 31 89 173

Denmark 140 56 163

Sweden 173 99 124Finland 74 27 106Peru 116 191 104Czech Republic 200 200 84Taiwan 18 40 64Venezuela 100 38 62Netherlands 41 232 60Others 1765 1025 435Total 9373 5570 5902SOURCE: GTIS/Chile Customs - Servicio Nacional de aduana

CHILEAN FIRST QuARTER RAISIN EXPORTS (TONNES)2013 2014 2015

uK 378 925 977

Colombia 604 942 785

Mexico 629 831 714


uS 314 343 364

Russia 652 1139 353

Peru 98 344 309

Taiwan 205 239 295

Brazil 103 101 285

Spain 184 203 284

Denmark 260 450 264

Turkey 41 20 260

Venezuela 20 554 241

Ecuador 186 114 161Poland 124 61 123France 40 106 117Belgium 40 80 100Malaysia 20 20 93Germany 42 80 90Algeria 20 180 63Others 708 711 700Total 5092 7904 7019SOURCE: GTIS/Chile Customs - Servicio Nacional de aduana

CHILEAN FIRST QuARTER WALNuT EXPORTS (TONNES)2013 2014 2015

Brazil 390 318 271

Germany 252 139 162

Switzerland 20 19 80


uruguay 2 21 48

Ecuador 73 77 45

Venezuela 0 0 40

Russia 30 8 26

Singapore 0 0 13

Saudi Arabia 0 0 12

Italy 50 70 11

Egypt 0 0 10

Others 403 654 45

Total 1330 1450 821SOURCE: GTIS/Chile Customs - Servicio Nacional de aduana

Continued from page 12

This comprehensive report is your one stop shop for all you need to know about the global nuts sector, covering consumption, production and global trade for almonds; brazil nuts; cashews; coconut; hazelnuts; macadamias; peanuts; pecans; pine nuts; pistachios; and walnuts.

Each nut is presented as a separate chapter, covering the nut in question, its history, and growing conditions; as well as applications for use and processing, such as marzipan and peanut butter.

The main growing countries are also covered for each nut - their history, production, acreage and export figures, illustrated with copious charts and graphs.

New trends and market entrants are also examined in depth – as well as the various challenges facing the nuts industry, such as diseases and trade disputes.

The report concludes with a detailed contacts directory of associations and companies involved in the nuts business, including growers, processors, exporters and other, related sectors.

This report from Foodnews will explore:n Key trade statistics for the global nuts sector, split out by nut varietyn End to end examination of each nut from growing to processingn Main growing countries for each nut varietyn Emerging trends and market entrantsn Challenges facing the nuts industry

FOODNEWS NUTS REPORT 2014

Production, Processing, Consumption, Trade - Key Trends and Developments

THIS REPORT WILL HELP YOU UNDERSTAND:

1. What are the current trade statistics for each nut variety

2. What opportunities and challenges in the industry

3. What companies are entering and currently involved in the nuts business

Food News: Nuts Report 2014Production, Processing, Consumption, Trade - Key Trends and Developments

REPORTS

HOW TO ORDER… Visit: store.agra-net.com/reports/ nut14.html Email: [email protected] Call: Gary Ward on +44 (0) 20 7017 75815

NEW REPORT


REPORTS

This comprehensive report is your one stop shop for all you need to know about the global nuts sector, covering consumption, production and global trade for almonds; brazil nuts; cashews; coconut; hazelnuts; macadamias; peanuts; pecans; pine nuts; pistachios; and walnuts.

Each nut is presented as a separate chapter, covering the nut in question, its history, and growing conditions; as well as applications for use and processing, such as marzipan and peanut butter.

The main growing countries are also covered for each nut - their history, production, acreage and export figures, illustrated with copious charts and graphs.

New trends and market entrants are also examined in depth – as well as the various challenges facing the nuts industry, such as diseases and trade disputes.

The report concludes with a detailed contacts directory of associations and companies involved in the nuts business, including growers, processors, exporters and other, related sectors.

This report from Foodnews will explore:n Key trade statistics for the global nuts sector, split out by nut varietyn End to end examination of each nut from growing to processingn Main growing countries for each nut varietyn Emerging trends and market entrantsn Challenges facing the nuts industry

FOODNEWS NUTS REPORT 2014

Production, Processing, Consumption, Trade - Key Trends and Developments

THIS REPORT WILL HELP YOU UNDERSTAND:

1. What are the current trade statistics for each nut variety

2. What opportunities and challenges in the industry

3. What companies are entering and currently involved in the nuts business


REPORTS

HOW TO ORDER… Visit: store.agra-net.com/reports/ nut14.html Email: [email protected] Call: Gary Ward on +44 (0) 20 7017 75815

NEW REPORT


REPORTS


The first three months of 2015 indicate that world raisin exporters should

expect to maintain a decent volume of sales to Asian countries over the remainder of this year.

In the full calendar year 2014 Japan was a prominent buyer at 29,594 tonnes, which was only 2.57% down from its 2013 volumes.

The US was the dominant source of supply to Japan last year, shipping a total of 25,836 tonnes, a decline of 4% from 2013. Turkey was next at 1,961 tonnes, followed by Chile at 607 tonnes, Australia with 430 tonnes and South Africa 350 tonnes.

The ranking by volume remains the same for the first three months of this year, when Japan upped its purchases from the US by 6% to 6,372 tonnes.

Japan’s overall volumes are also higher for the January-March 2015 period at 7,429 tonnes against 6,949 tonnes in the first

quarter of 2013 – a gain of 6.9%.Its imports from Turkey in Q1

2015 increased 34.5% to 674 tonnes; those from Chile gained 29.8% to 185 tonnes; and its purchases from Australia were 168.8% higher at 73 tonnes.

Taiwan’s imports of raisins dipped 6.9% last year to 6,850 tonnes.

The country’s purchases from its leading supplier the US advanced 3% to 4,326 tonnes while those from second top supplier Chile declined 15.5% to 1,835 tonnes. China was the next source of supply at 476 tonnes (+6.7% from 2013) followed by Turkey at 146 tonnes (+125%).

Taiwan has been buying quite keenly over the first quarter of this year, with its total volumes up 3.8% to 1,952 tonnes.

US sales to Taiwan are virtually on a par with those of Q1 2014 at 1,283 tonnes but Chile has seen a moderate decline of 5.3% to 416 tonnes.

In the case of China, Taiwan increased its acquisitions 50.8% in the Q1 2015 period to 203 tonnes.

Turkey ranked as fifth biggest

supplier in the first three months of this year with 21 tonnes shipped, up from a mere three tonnes previously.

Malaysia’s global raisin imports dipped 3.5% last year to 6,412 tonnes.

The US, Iran and India were its leading three sources of supply.

For Q1 2015 the ranking shifts slightly with Iran top at 691 tonnes; the US next at 418 tonnes; and India third at 121 tonnes.

Of these three origins Iran was the only one recording a boost – 137% up from Q1 2014 volumes.

Chile and Turkey featured as the fourth and fifth biggest suppliers in the first three months of this year.

South Korea favours US raisins and these accounted for a 93% share of its total imports of 4,882 tonnes last year.

South Korea’s total volume in 2015 was 15.6% up from the previous year, but Q1 2015 has shown a 23.9% decline to 998 tonnes.

Purchases from the US in the 2015 period were down 23.8% at 968 tonnes while those from Turkey fell 48.7% to 14 tonnes.

Imports of raisins by Thailand and Singapore are more than 50% lower than those of Taiwan or Malaysia and significantly behind South Korea.

It does however, need to be borne in mind that Singapore is a transshipment point anyway so it is unknown how much of its purchases would be consumed within the country itself.

It is generally assumed that at

the far east has become a significant market for global raisin exporters in recent years and this trend looks set to continue.

DRIED FRuIT & NuTS I RaISINS

BY juLIAN GALE

a market full of eaSterN promiSe

jAPANESE FIRST QuARTER RAISIN IMPORTS (TONNES)2013 2014 2015

uS 6800 6011 6372

Turkey 467 501 674

Chile 100 143 185

Australia 11 27 73

South Africa 140 123 72

China 119 129 39

Others 21 15 14

Total 7658 6949 7429SOURCE: GTIS/Japan Ministry of Finance

TAIWANESE FIRST QuARTER RAISIN IMPORTS (TONNES) 2013 2014 2015

uS 1161 1281 1283

Chile 303 439 416

China 186 134 203

Iran 0 0 23

Turkey 60 3 21

South Africa 0 0 5

Others 101 23 1

Total 1811 1880 1952SOURCE: GTIS/Taiwan Directorate General of Customs


least some of the volumes listed here would be destined for selling on to another point.

In the case of Thailand, total imports last year were at 2,889 tonnes, a 21.1% increase from 2013.

The US was the leading supplier at 2,212 tonnes (+47.6% from 2013).

China was next with 518 tonnes sold to Thailand, a decline

of 34.9% from 2013 volumes.In 2014, Singapore’s total

raisin imports were at 2,337 tonnes, just 3% down from 2013, with the US, Iran and India ranking as its top three suppliers.

For Q1 2015, the US and Iran held their respective rankings, but Turkey managed to squeeze into third place ahead of India by selling 34 tonnes as opposed to the 30 tonnes recorded for India.

Imports from the US were at 358 tonnes while those from Iran were at 57 tonnes.

Singapore imported a total of 558 tonnes in the first quarter of this year.

In terms of the global off-take on raisins the role of Far East countries cannot be overlooked.

Looking at the figures for Q1 2015 specifically of the countries assessed in this article, only Japan and Taiwan have shown an actual upturn in volumes for this period against the same phase of 2014. However, the underlying prospects remain promising and it is still possible that the other nations which have lagged behind to varying degrees over the first three quarters of this year could still end 2015 either close behind or slightly ahead of year-ago annual volumes. n

RaISINS I DRIED FRuIT & NuTS

MALAYSIAN FIRST QuARTER RAISIN IMPORTS (TONNES)2013 2014 2015

Iran 351 291 691

uS 1218 1130 418

India 237 131 121

Chile 0 81 74

Turkey 40 7 68

Hong Kong 0 0 42

Others 134 229 84

Total 1980 1869 1498

SOURCE: GTIS/Department of Statistics Malaysia

“The US was the dominant source of supply to Japan last year, shipping a total of 25,836 tonnes, a decline of 4% from2013. Turkey was next at 1,961tonnes, followed by Chile at 607 tonnes, australia with 430 tonnes and South africa 350 tonnes.”


The appreciating dollar, the water issue in California, lower prices

from China, China’s possibly growing too much, the timing of new contracts and many other topics are bound to affect the processed tomato market in the months to come.

At the very beginning of this year, the industry received a first shake up when the euro dropped against the dollar from EUR1.25 to EUR1.12 in less than a month. This was a result of both the strengthening of the dollar due to the USA’s improving economy and energy policy, and the weakening of the euro enhanced by the Greek dilemma. From where we stand at the moment, both drivers do not look likely to change much in the foreseeable future.

That first currency rumble put the wheel into motion for tomato buyers and sellers alike, although for different reasons. Some buyers saw a chance to save money, and hurried to secure early contracts with European processors at a fixed exchange rate.

Sellers in Portugal and Spain had the opportunity of an early start, and kicked off negotiations pretty soon in the year. At the time of writing, on the way back from the Tomato Forum, it is understood that many companies in both countries have contracted a majority of their production: a high proportion of tomato paste is taken (70-80% or possibly more, depending on the factory),

but also more than half of companies’ pulp capacity (of chopped/diced, crushed, whole tomatoes and related) is understood to be booked.

To some extent, Italy was excluded from early negotiations with tomato paste customers, since its prices remain quite higher than Spanish or Portuguese. It is a different story for pulp commodities: here, there has been noteworthy demand from European buyers for Italian chopped, crushed et al., helped by the fact that there is nothing left in stock.

The outlook for Europe remains potentially stable for the time being, but this could quickly change depending on final harvested volumes: if we see a strong increase in output this summer – and several players in the game do worry about it – the market may take a turn downward. Production, particularly in some crucial origins – Spain in Europe, and China in Asia – will determine this.

California and ChinaThe situation in California is a main topic on the cards, with a second year of drought and the delay of growers and processors to set a base price for raw material.

FOODNEWS has to admit that it did not see Californians in Rome as being over-concerned about what is going on. In his presentation at the Forum, one of the speakers showed that water levels are low, although not at their worst. He described part of

the issue in the state as a “mechanical and political one”, rather than the fact that the pipes are simply dry.

The line of “water is there, we are not so worried” was shared by several other American delegates attending. We will see what gives there.

On the other hand, California still has to set a minimum base price for its raw material for this crop. At the time of writing, negotiations are ongoing and this is affecting exporters’ business strategies.

Some have come to the market with preliminary offers, with the understanding that these may change according to the base price that is agreed. Some are buying time to see whether the situation clears up, while others are making ‘blind offers’, setting firm prices to buyers despite the uncertainty on raw material cost.

Still, Europe is set to be largely an unreachable market for US sellers this year. Besides the possibility of a second expensive

season for raw material, the 20% appreciation of the dollar on the euro renders US sellers unable to compete with European origins. They will push the domestic market, and try to deliver more to those destinations that are priced in dollars (Middle East, NAFTA countries).

To some of these markets, such as the UAE or the MENA region, Californian processors will however face competition from China. The Asian origin slashed its prices by over USD200 per tonne this year compared with 2014 rates, to make up for the euro-dollar currency loss. Although US product is generally priced higher than Chinese, this year the gap will probably be much higher than usual, and would be a relevant factor when it comes to buying.

On its part, China is expecting to grow slightly more than last year, at 6.5 million tonnes. This would equate to 810,000 – 820,000 tonnes of 36/38 tomato paste cold break, as well as lower concentration product, that the country could produce. Warehouses in China still have some volumes of 2014 product with low colour parameters available, which is proving difficult to sell.

Local industry sources maintain the country would try to keep its production within limit to avoid another round of global glut, but it is admittedly difficult for such a large origin. As in other years, China has the magnitude and the capability to steer the global market one way or the other with equal force. n

the tomato industry gathered once again this June in rome for the latest edition of the FOODNEWS tomato forum conference, amid some concern over possible high global production in 2015 and the instability of the currency markets hindering trade opportunities for some.

FRuIT I TOMaTO PRODUCTS

BY DAVIDE GHILOTTI

reaDy to rumBle


TOMaTO PRODUCTS I FRuIT

Europe as a whole has had a strong start of the year in both the tomato paste

and canned tomato segments. Demand from customers was high in the Americas, although exporters had a harder time with some countries, notably Russia or Australia.

The US, meanwhile, reduced its deliveries of both canned product and paste, although it did manage to expand in MENA and Russia.

In terms of pricing, the euro-dollar exchange rate is the common denominator shaping the season to come. US and, to an extent, China, are markedly uncompetitive in

Europe at the moment, and may try to push elsewhere where their product does not suffer the currency setback.

Europe’s tomato paste exports saw quite an increase in the first quarter of this year, totalling almost 87,000 tonnes (+15%). The figure combines volumes from all Europe’s 28 countries.

This growth was driven by higher deliveries to destinations in the Middle East, Africa and eastern Europe, while a few important and consolidated markets suffered a slowdown.

Customs figures show that Libya was the single largest export destination for European

tomato paste in January-March, taking almost 17,300 tonnes. This is over double the volumes bound there last year and, in terms of size, the country now accounts for 20% of the whole EU paste export market. Libya remains an unstable destination, however – in 2013/14, Q1 exports there shrank to one-fifth of their earlier size.

MENA destinations where EU sellers fared well include Saudi Arabia, with 5,966 tonnes (+368%) and Sudan (3,274 tonnes, +101%). More established markets such as Russia, Japan and Australia all saw a slowdown in Q1 exports by 41%, 29% and 19% respectively.

“Libya remains an unstable destination, – in 2013/14, Q1 exports there shrank to one-fifth of their earlier size.”

BY DAVIDE GHILOTTI

as the new crops are approaching fast, let us look back at how tomato producing counties have performed over the latest months.

tomato traDe upDate


FRuIT I TOMaTO PRODUCTS

Despite the record tomato production in California in 2014, north America stepped up its demand for European paste as well. This was the case for both the US and Canada, which took a combined 4,400 tonnes – an average increase of 35% on Q1 2014.

As EU exports to the US followed an uptrend, US shipments were actually 22% lower in the first four months of 2015, at 166,630 tonnes. Primary destinations such as largest buyer Mexico and second-largest Canada were both down by more than 20,000 and 17,000 tonnes. This was the case for another relevant importer, Italy.

The issues in shipping operations at Californian ports, which affected the activity of local harbours earlier this year, is thought to have been a main driver for the decrease in paste loads. Ports have now resumed normal work, but it is taking time to clear the cargoes amassed earlier.

The distribution of US foreign trade saw the opposite happening: although the overall volumes shipped were broadly down, the relevance of top buyers in the US export basket increased. As a matter of fact, Mexico raised its

share of the US trade to 12.5%, while Canada also did so, however marginally, and now accounts for 10.5% of exports.

Bucking the downtrend were other notable markets which stepped up their demand from the US: the Netherlands and the UK in Europe, and Japan, the UAE and Russia outside the bloc. Volumes to Africa’s largest importer Nigeria fell 63% in January-April.

As for what may happen this year, so far we can see a European market that remains largely closed to outsiders selling in dollars. Coupled with freight, duties and other costs, the exchange rate renders dollar-priced paste visibly uncompetitive against European product in euros. This may of course evolve depending on where the forex goes in the summer months. At the moment, EU demand for paste from local producers Spain and Portugal is high; fellow origins Greece and Italy are expected to see substantial enquiries, while China has drastically dropped its prices against last year to make up for the unfavourable exchange rate.

Canned tomatoesEuropean origins fared positively also on the canned tomato front (HS 200210), with EU28 exports 5% higher in Q1 2015, at 124,146 tonnes.

The performance was due to an evenly-spread increase in deliveries to both large and medium-sized destinations, including a few notable examples in peripheral markets.

The US remains the leading buyer of EU canned tomatoes, taking 22% of all European exports. With 27,000 tonnes bound there in Q1, the destination grew 6% in volume.

Other established markets followed a similar pattern, such as Norway, Japan and Switzerland. A stronger growth was registered in Canada (+41%) and South Africa (+15%).

As we saw in tomato paste, canned tomato exports from the US shared a similar fate, dropping 27% in January-April. Several important buyers both in Europe and south-east Asia received lower volumes. Trade to Italy, Mexico and Japan fell by an average of 56%. In the case of Mexico, the country lost 10 points of the US export

market, and now accounts for only 7% of total trade.

Over to the east, South Korea, Australia, Taiwan and New Zealand saw double- figure drops.

The canned tomato market remained upbeat for most of the 2014/15 marketing year, as most producers entered the last processing season with zero stocks. Adding to high demand, this upheld prices. We did see, for the second year in a row, a sharp price increase in the months following processing through to the end of year.

As we get ready for the start of the crops in the northern hemisphere, the situation does not look so different from last year: zero stocks, high demand. Since overall canned tomato output is not expected to change significantly, we might see a reprise of the 2014 patterns, with sustained pricing and demand from customers from late summer onwards.

Other pulp products, such as passata, crushed tomatoes, pizza and other sauces are expected to continue to expand as they have done until now. n


The strawberry market is up and running with Morocco and China

already out there with opposite price strategies.

Raspberries are still characterised by overall tightness. Chile has product although its industry is worried about the country’s output decreasing and its exports have shrunk as of the recent months.

The situation for sour cherries has remained one of glut for most of the past year, and only 2015 outputs in key producing countries – US, Poland, Serbia, Turkey – will decide whether this market goes back up, or further down.

StrawberriesFollowing its negative performance of 2014, China did not manage to get back on its feet in early 2015, as its foreign strawberry trade slowed down further.

Chinese frozen strawberry exports in January-April fell 19% to just 18,300 tonnes, confirming what FOODNEWS had forecast in the Global Outlook 2015 supplement, pointing to the seriousness of the Chinese problem.

The country still had some 20,000 tonnes of product left in coldstores until not long ago, and has dropped its prices sharply against last year to reverse the trend. With some contracts for IQF American 13 being offered around USD1.0 per kg c&f EU as we go to press, this may be the sole way to go for local companies to win back some of the share they lost.

Although we only have data for the first two months of this year, it is enough to state that Poland is still reaping the benefits of the strong production it had in 2014. January-February shipments grew one-third on previous-year levels, and almost all destinations in Europe bought more. Its price conditions – for the first time ever lower than China for the whole crop and marketing season – made Poland a must-have for EU importers.

As harvesting is under way at the time of writing, it remains to be seen whether Polish processors would be able to maintain the price competitiveness they had last year – also in the face of remaining inventories of 2014 product in their warehouses.

For its part, Morocco is finishing its strawberry harvest, and trade seems to be going well for the northern African origin. Shipments in Q1, at just below 18,000 tonnes, showed a further 31% rise on 2014, and almost doubled on 2013. European processors are putting a lot of faith in Moroccan strawberries – Dutch off-take (+84%) makes this very clear. Higher demand is among the reasons that have pushed prices up this year, albeit slightly. The country remains one to watch.

raspberriesAt the time of writing, Chile has completed its raspberry season, although the latest data shows that shipments of IQF product in early 2015 were down. This points to growing concern among local firms that Chile’s raspberry capacity is slowly eroding. IQF Heritage raspberry wholes, priced

at USD4.30/kg c&f EU as of May, remain expensive for European customers and more affordable for north America.

In mid-May, Serbia battled with hail and rains that affected a sizeable portion of raspberry orchards in various regions. Despite the damage, local associations estimate an increase in fruit quality and output, put at 86,000 tonnes by UHS. As usual, farmers and processors are bickering on raw material pricing: neither side wants to give in, particularly at these times of high markets.

Serbian exports in Q1, at some 19,000 tonnes, increased 7% on 2014 and 31% on 2013. Germany, France, Belgium and Sweden were the top four destinations.

Poland’s frozen raspberry trade was equally on the up in Q1 (+23%), mainly to the same destinations as for Serbia.

It is early to say whether the IQF raspberry market will finally see some price easing, following two years of high prices. The 2014 output went some way in this direction, although quality was a main issue and crumble production was much higher

than that of wholes. This points to the fact that quality of the fruit, and not simply volumes, will be crucial to determine future price movements.

Sour cherriesThe sour cherry market in Europe has seen some degree of price growth over the last month, as is customary at the end of the marketing year prior to new crops. Still, the commodity has been trading at low price levels for all of 2014/15. Overproduction, coupled with stagnant and, at times, shrinking demand has meant bottom-low rates across the board.

This has been the case for Poland, Serbia and Hungary, among the main origins for sour cherries in Europe. Other countries, such as Germany and the Scandinavian area, are reducing their cherry acreage due to low profitability.

As of mid-June, Polish pitted Lutowka cherries, class I, are priced EUR1.10/kg (USD1.25/kg) ex-works. Hungarian pitted Pander cherries, class I, are also at EUR1.10/kg ex-works, while Serbian pitted Oblachinska cherries, class I, are priced a slightly higher EUR1.15/kg ex-works.

Although these are not the staggeringly low prices mentioned above, the three origins had been below EUR1.0/kg until late January.

FOODNEWS confirms the view expressed in the Global Outlook: supply in Europe still outweighs demand. New importing markets must be found, possibly in Asia, and production has to come to terms with a slower overall consumption. n

FROzEN BERRIES I FRuIT

BY DAVIDE GHILOTTI

prices and supply are bound to shape the 2015 processing and trading season for frozen berries, as new crops are starting (or have ended at the time of writing) through all the northern hemisphere.

a Berry NeW Crop


CANNED FOOD I pINEapppLES

Overall demand in the the first months of the year seemed stable as the

surge in the Middle East has made up for the drop in Europe, while demand from the US continues to be strong. By contrast, the fruit shortage has worsened – especially in Thailand – pushing raw material prices to an all-time record and subsequently, dragging canned pineapple prices along.

The Thai pineapple industry has continued to slide downhill since 2011, when it hit a record-high export volume of 219,592 tonnes during the first four months of the year – 641,745

tonnes for the full year. Problems at the world’s largest canned pineapple producer that squeezed output to historic bottom levels have brought the entire market to its knees.

Exports of canned pineapple (HS code 200820) from Thailand plunged by 17% to 171,851 tonnes in the first four months of 2015, compared with the same period the year before. The Thai slowdown can easily be explained by low output, prompted by farmers shifting to other commodities considered more profitable (such as sweet corn), which in turn has contributed to sky-high raw material prices of

THB10.50 (USD0.31) per kilo in March-April.

Shipments to the US, the main destination for Thai canned pineapple, remained flat during the period (+0.36) at 52,560 tonnes compared with 2014 but were down by almost 7% against 2013. Exports to Germany, the second-largest buyer, plunged by over 16% to 14,648 tonnes year-on-year.

The decline was softer when looking at the EU as a whole. The bloc imported 31,986 tonnes (+0.77%) of Thai canned pineapple in Q1 2015 year-on-year, despite shipments to practically every EU member

declining sharply: Netherlands (-22%), France (-9%), Spain (-45%) with the exception of the UK (+2%) and Poland (+22%).

Exports from other producing countries to the EU were also down in Q1 2015, for instance deliveries of canned pineapple from Indonesia dropped by 18% to 13,152 tonnes and from Kenya by -17% to 8,226 tonnes over the quarter.

EU import data proves what FOODNEWS has been hearing from industry contacts: the European market remains stagnant due to a combination of weak consumer demand and eroded purchasing power of buyers after the euro dropped by around 20% in value against the dollar.

Conversely, the Thai exports to the UAE, the third-largest customer, jumped by 26% to 7,590 tonnes, year-on-year. Shipments to the Middle East have been increasing steadily year-on-year. In fact, almost all Middle East destinations have seen an increase in volume: UAE (+26%) to 7,590 tonnes, Yemen (+57.27%) to 5,120 tonnes, Saudi Arabia (+13%) to 4,635 tonnes.

Also economically hit by a weak rouble – along with Western sanctions – Russia’s imports of canned pineapple plummeted by 35% to 4,891 tonnes, posting a progressive decline year-on-year since 2013 (-55.15%).

While Thai canned pineapple exports continue to plummet due to low production, other countries’ output has soared to meet demand and gained market share.

GTIS total exports data shows percentage gains in all producing countries in Q1 2015 year-on-year, including the Philippines (+102%) to 77,345 tonnes, Kenya (+47%) to 15,008 tonnes, China (+ 99%) to 5,308 tonnes, except

Global canned pineapple exports are stable despite raw material scarcity and record-high prices. the situation is likely to continue until the end of next year as demand outpaces tight supply.

BY LORENA RuIBAL

loW Supply, hiGh priCeS


pINEappLES I CANNED FOOD

“The fruit shortage has worsened – especially in Thailand – pushing raw material prices to an all-time record and subsequently, dragging canned pineapple prices along”

for Thailand, whose exports declined by 15% to 125,047 tonnes. Latest customs data available for Indonesia, which dates only to January 2015, also shows a positive export increase (+17%) to 14,056 tonnes year-on-year.

Despite their relatively low export volumes – even if all were added together, they would barely reach Thailand’s volumes – the data suggests that secondary producing countries managed to supply the canned product to buyers forced to shift away from Thailand. Therefore, this market move could be interpreted as a first symptom of a much-wanted origin change for canned pineapple, shielding the market from troubled Thailand. This seems to be the strategy for Germany and US buyers, as they have been seeking more volumes from unusual origins.

Of Indonesia´s total exports of 14,056 tonnes in January 2015, one-third was shipped to the US (+3%). The second-largest importer was Spain (3%) with 1,090 tonnes. Other buyers were Singapore (834 tonnes, +126%, remembering always that Singapore is a trading centre and

some, maybe most, of this will be sold on) and Germany (819 tonnes, +476%).

Shipments from Philippines, third largest canned pineapple exporter, doubled to 77,345 tonnes in Q1 2015, of which more than half went to the US, which doubled its off-take in the period. Deliveries to Japan and China were nearly up by three times to 5,722 tonnes and 2,217 tonnes year-on-year, while shipments to South Korea doubled to 4,871 tonnes.

Exports to Spain decreased by 12% to 2,585 tonnes over the period. Conversely, shipments to other destinations increased although overall volumes were below 2,500 tonnes: Australia (+107%), UK (+57%), Netherlands (+79%) and UAE (+610%).

The rise of Kenya illustrates the mentioned interest of buyers in “unusual origins”. Kenyan exports of canned pineapple soared by 47% to 15,008 tonnes in Q1 2015. Its main trading partner was Germany, which took up 4,863 tonnes in the period (+3.7%). In the second position is the US, which imported 2,200 tonnes from none in 2013 and

some 109 in 2012. Deliveries to Spain jumped by 84% to 2,017 in the January/March period.

Looking into China’s data, exports practically doubled to 8,136 tonnes in the first four months of this year. The main receptor was the US, whose off-take increased by five times to 3,753 tonnes. Other destinations: the UAE (+80%) to 1,643 tonnes and the UK with 932 tonnes (+8%). It remains unclear whether China could ever become a serious competitor in the sector.

In terms of pricing, the EU paid around 10% more for all origins of canned pineapple in Q1 2015

year-on-year, the most expensive product was of Kenyan origin at USD1,420/tonne, followed by the Philippines at USD1,327/tonne and Thai at USD1,154/tonne. Indonesian canned pineapple at USD1,098/tonne was cheaper than the Chinese product at USD1,132/tonne.

Thai prices increase the most, up by 32% to USD1,136 on average, although some countries paid lower. This is the case of Germany at USD953/tonne, while others such as Russia, Saudi Arabia and Yemen all paid under USD990/tonne.

FOODNEWS is confident that Thailand will continue is negative production performance keeping pineapple prices up as demand outpaces tight supply.

Meanwhile, it might be worth keeping an eye on secondary producing countries, which could certainly offer some relief to buyers frustrated by Thailand’s disappointing volumes to come in the second half of year, despite Thai estimates foreseeing a recovery in production.

Steep demand, under-supply and sky-high prices will likely continue to the end of 2016, much to buyers chagrin. n


CANNED FOOD I TUNa

Exports of canned tuna fell in Q1 2015 year-on-year. On the supply side,

the only canned tuna exporter that increased exports during the period was China, 12% up to 17,520 tonnes during the January-March period, probably driven mainly by the hefty US off-take. Thai canned tuna exports fell by 8% to 137,044 tonnes in the first quarter of the year, compared with the same period in 2014; deliveries from Ecuador declined by 3% to 40,340 tonnes; shipments from the Philippines plummeted by 37% to 22,675 tonnes, while exports from Mauritius were down by 12% to 14,640 tonnes.

Ecuador continued to be the main origin for canned tuna imports into the EU, deliveries plunged by 14% to 23,922 tonnes. EU import data shows that shipments from Thailand fell the most (-42%) to 16,053 tonnes year-on-year, potentially prompted by the EU yellow card issued to Thailand over illegal, unreported and unregulated (IUU) fishing, on top of several alleged human rights violations taking place in Thai fisheries.

The new duty-free agreement between the EU and Philippines did not show in the stats as shipments were down by 9% to 14,871 tonnes over the period. The situation is likely to revert in the next quarterly data.

In the US, imports from Thailand dropped by 12% to 28,916 tonnes, while shipments from China soared by 52% to 10,451 tonnes in January-April

2015, year-on-year. Ecuador was the third largest exporter of canned tuna with 6,180 tonnes, which marked a 34% increase.

Surprisingly, prices of canned tuna from Ecuador declined the most, by 18% to USD5,428/tonne, although still well above Thai prices of USD4,007/tonne (-9%). While Thai canned tuna enters the US duty-free via American Samoa, Ecuador imports have a 35% tariff on canned tuna in oil and 12.5% on canned tuna in brine, which makes it less competitive. However, FOODNEWS has been hearing from different sources in both countries that Ecuadorian tuna packers massively-loaded with raw material tuna were selling at below-cost prices to get rid of inventory. Other rumours point that the Ecuadorian government is subsidising exports by refunding Ecuadorian exporters the tariff. This could explain the US surge in imports from the Latin American country.

During the established period, canned tuna imports to US by value fell slightly (-5%) compared to Europe, where they declined 15-24% to an average of USD4,643/tonnes over the 2015 period, year-on-year.

The steep decline in exports highlights the poor state in which the sector is: the industry is being hammered by faltering demand, overfishing and rock-bottom raw material prices.

Stagnant demand in main markets Europe and the US suggests that consumers could be falling out of love with canned tuna: EU imports of canned tuna (HS160414) fell by 2% to 158,048 tonnes during the first four months

of the year, compared to the same period in 2014, while US imports remained flat (+0.75) at 68,852 tonnes during this timeframe.

Some FOODNEWS’ sources in the US and Spain noted that when looking at the demand side, we should distinguish between private label (PL) and the brand tuna market. A US buyer for PL said this year has brought more long-term contracts for PL retail tuna where in the past the main business has been based in quarterly bookings. The Spanish canner commented that demand for PL is up by 5% this year in Europe.

This said, it is clear that the PL is not able to make up for the drop in branded canned tuna sales and, generally speaking, there is no real perception of any pick up in canned orders. In this regard, a German trader commented that the delay/halt in canned tuna orders in Europe was more because of the uncertainty on the performance of the euro than a perceived decline in consumer demand. While US canned tuna buyers decided to back off and withdrew bids when skipjack prices started to firm up at USD1,080/tonne fob Bangkok

and USD850/tonne fob Manta in May, not wanting to be hit with prices dropping again.

As a result, Thai and Ecuadorian packers are desperate to get rid of inventory; both countries continue to report low production activity and are said to have lots of fish in cold storage. The same situation applies to other plants worldwide.

To make things worse, despite WTPO’s decision to curb global fishing by 35%, the Western and Central Pacific Ocean’s ban on FADs and first fishing closure in Eastern Tropical Pacific on July 1, it seems that fish over-supply continues.

“Here in Ecuador catches are poor, there is little fish. We spent three weeks trying to get 1,000 tonness of fish and we’ve only got about 250 tonnes so far at USD1,000/tonne,” a Ecuadorian packer told FOODNEWS. However, reportedly generous catches in Mauritania confirmed by Spanish packers could lead to a further decline in prices.

In addition, the US buyer told FOODNEWS that Thai Union was intending to make a major raw material buy at USD1,200/tonnes to attempt to drive the market even higher.

Funnily enough, we are experiencing a situation of a price increase amid a slow market and not even at the pace some industry players wished for. Many question whether prices can be sustained without a steep shift in demand. Certainly, an increase in skipjack prices to last year’s levels of USD1,600/tonne would be unlikely to happen, if it does it would leave many bemused, FOODNEWS included. n

Canned tuna exports are down as global demand and raw material prices fail to pick up. Based on several recent unsuccessful industry attempts to lift the market, FOODNEWS sees no turnaround.

BY LORENA RuIBAL

SloW CaN-CaN

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Rhodes Food Group enjoys a rich history of fruit farming and processing that dates back to the 1800s. Today, we are a world class Southern African supplier of high quality bulk fruit purees and concentrates to the global beverage industry. We have state of the art processing facilities located in the deciduous fruit-growing region of the Western Cape, South Africa as well as in Swaziland – close to our pineapple farms and the wider citrus orchard area. Our commitment to international food safety standards sees us producing peach, pear, apple, apricot, tomato and pink guava purees; in addition to pineapple, orange, marsh and ruby grapefruit concentrates. Our expert production, technical and product innovation teams have also crafted a wide range of balanced juice blends, which are packed into ambient juice retail products (in either Tetra Pak® or Elopak formats) for various global third party brands, premium private label programmes and our own brands.

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half year outlook - IEG Vu€¦ · slumps. Tuna fishing is slack because of the low prices currently being asked for raw tuna. And in dried fruit and nuts, inclement weather has hammered