Tuna pricing is stepping up faster than expected. Current supply is very poor, in part caused by the number of fishing vessels that are in quarantine. Current market price of Skipjack is above $1,400/mt and packers are not receiving offers due to low supply. Yellowfin follows the Skipjack trend and its price is expected to increase but packers are not sure to what level yet. Albacore price has rebounded back to $3,600/MT due to lower supply as Japanese Albacore season has ended. Tongol is also low in supply, due to both the closure of Gulf of Thailand and poor catches.
Current Tuna Market Raw Material Price:
SKJ = US$1,400-1500/ton YFN = US$2,000/ton
Albacore = US$3,600/ton Tongol = US$1,700/ton
Peach season in China will end in mid-August. The raw material was $0.16/kg when the season started but now is $0.20-$0.23/kg. Canned fruits are in high demand, not only for export but in the Chinese market as well. Most of the packers are fully booked for the season and are not taking additional orders.
The US had a great solid peach crop this season, but growers are struggling to retain adequate manpower to harvest. There is difficulty keeping enough workers and acclimated harvest laborers on hand with COVID-19 precautions. Depending on demand, prices could be higher than previous seasons.
The new season for frozen mango in Peru will start in December and run through May. At this point, there is not much to report. However, packers do expect prices to remain at current levels. As the season develops, we will be watching things carefully.
Production of frozen avocados in Peru is expected to go through the end of August with shipments lasting through December. Production will pick up again for the next season in March. So far, the current harvest is about the same as previous years. COVID-19 has had an impact, but suppliers have successfully adapted. Prices this year should be about the same as last year, although packers are expecting a 5-8% for next season depending on how COVID-19 continues to play out. The best time to book for next season would be in December or January.
A new crop of artichokes started in Peru about a month ago and July had large harvest volumes, even bigger than during the same period in the past few years. The crop will last through November and weather conditions and fields look good. Packers do not expect any problems with yields.
The situation for peppers in Peru looks good as well. The harvest will start in August and go through early October. The fields look good, and yields are expected to be the same volume as previous years.
However, due to COVID-19 Peruvian pepper packers are spending significant resources on preventive actions and safety measures to continue working in the fields and factories. Social distancing protocols are expected to impact plant productivity. These measures are anticipated to last for most of the year.
For Peruvian artichokes and peppers overall, there may be some price increases. Our suppliers are doing their best to avoid translating these extra costs to our established customers.
The new crop in Greece is expected to be of normal size, or possibly slightly higher than usual. Temperatures are a little higher than normal for this time of the year. However, they are not high enough to negatively affect the quality of the raw material. So far, the quality is actually better than any other year before.
Packers are doing their best to keep prices at the current level to help with the business. Despite COVID-19 safety measures and the rise in USD/EUR exchange rate, no price increases are expected.
JAMS AND BERRIES
Prices for the next season are expected to be confirmed by early or mid-September for berries and jams out of Denmark. So far, the market looks set for a price increase. There has been a big increase in demand for organic berries, which is already forcing up prices. Conventional raspberries will probably also see increases. The exception to this trend is conventional strawberries, which are expected to have a lower price than in years past. All segments of the Nordic berry market are having trouble securing workers from abroad due to COVID-19, which is also contributing to higher prices.
Spanish mushroom production is currently on schedule and keeping up with an increased level of demand. This is despite having to implement new COVID-19 restrictions. Demand from both the retail and pizza markets remains strong, so some packers are anticipating a small price increase in September. Overall, the industry is keeping up with increased demands and expects to see continued growth.
Thailand raw material price remains at record highs. A Thai-based industry source noted that canneries, if they still can afford high raw material prices, are running at 20-30% of their capacity. Most facilities are downsizing, either temporarily or permanently.
IHS Market learned that around three hundred Dole Thailand workers were laid off last month at the factory south of Bangkok, in Hua Hin, with an annual capacity of 250,000 tonnes. The group has also owned a second factory in east Bangkok since 2012, with an annual capacity of 80,000 tonnes.
Historical data shows that around 60% of the annual production is harvested between January and June every year. If this trend is to continue this year, total raw material by December 2020 would be less than 900,000 tonnes.
COVID-19 has greatly affected the coconut water market across the globe, especially in the US and EU countries, where the demand is well established. The current market features high demand, a shortage of coconuts and the consequent higher prices. Further, the demand for packaged and unpackaged coconut water is more prominent during the summer season that lasts from April to July in most Southeast Asian countries. Compounding the high demand, COVID-19 adjustments during this year’s peak season has led to distribution disruptions and supply shortages.
The coconut cream market is forecasted to grow at a rate of 4.20% from 2020 to 2027. The increasing rates of veganism and lactose intolerance have already been driving growth over the last five years. This larger consumer base is building a profitable foundation for the coconut cream market.
Coconut cream is seeing increased use in Pan-Asian cuisine as well. There is an ongoing acceleration across the food and beverage industry, particularly in the confectionary and bakery sectors. Due to the introduction of many new snacks and savory products incorporating coconut cream, growth is high internationally.
Beyond the food and beverage industry, cosmetics and personal care products are including coconut cream more and more frequently. Rich in fiber and long-lasting skin nourishments, this sector is expected to see sustained growth.
The USD/EUR exchange rate continues to fall and hit lows not seen for 2 years last week. Weak Q2 GDP numbers and the Federal Reserve’s decision to keep interest rates near zero have pushed down the rate to 1.18, last seen in 2018.
Ocean freight rates from Asia have increased significantly in the past several weeks. High demand and an increase in blank sailings continue to push prices up. Rates may decrease at the end of peak season, but high rates are expected to continue in the near term.
Rates from Europe to the US have shown much less movement with prices changes less than $100 over the last few months.
- BKK to WC – $2,175/20’ (+$975)
- BKK to EC – $2,450 – 2,750/20’ (+$250)
- China to WC – $2,550/20’ (+$1,200)
- China to EC – $2,750/20’ (+$450