TUNA
Skipjack prices have fallen from high $2,000 last month to $1,500 this month, but higher fuel costs and reduced catches in the eastern Pacific keep pressure on packers. Tongol is still limited in supply leading to higher prices. Yellowfin price is also high due to the demand from Europe. The Albacore price is stable within its normal range. The discontinuation of FAD (Fishing Aggregating Devices) fishing practices could lead to a reduced supply of all tuna.
Raw Material Price
SKJ = US $1,500/ton
YFN = US $2,300/ton
Albacore = US $,3400/ton
Tongol = US $2,200/ton limited supply
PEACH
China – Chinese peach prices will be much more expensive for this harvest. It’s reported that peach output for 2022 decreased about 30%. Raw material prices have increased about $0.12-$0.15/kg compared to previous seasons.
Besides the raw material itself, there are also other factors:
- Tin plate prices are increasing globally.
- The price of sugar is also seeing increases; in 2021 the price was $835/ton, but in June 2022 it’s $890/ton, and the price continues to increase.
- Natural gas price increases.
Greece – A good crop this season, with a better yield compared to last year. Farmers are facing shortage of labor. Usually requiring 8,000-10,000 workers for the harvest, there are now only 1,500 workers available. As mentioned previously, increases in tin plate (60%), sugar (double or not available anymore), and electricity (200%) lead to overall higher pricing.
HEARTS OF PALM
The Heart of Palm (HOP) is a vegetable harvested from the inner core and growing bud of certain species of palm trees. After harvesting, the hearts of palm are cut into cylinders or sliced into rings and packed in water or brine. They look like smooth, thick white asparagus spears and are often said to taste like artichokes. The delicate flavor of hearts of palm makes them a popular choice for salads, but they can also be braised, fried, grilled or boiled.
Another HOP product that is gaining popularity is HOP Pasta. This alternative to traditional pasta is preferred as a healthier option with similar look and texture. On the market the HOP Pasta is offered in different formats, plain or garnished with variety of sauces and ready to eat.
In addition to their versatility on the plate, hearts of palm are nutritional powerhouses. The HOP is an innovative food with a great nutritional contribution of fiber, potassium, iron, zinc, calcium, phosphorus, copper, vitamin B2 and B6, vitamin C.
The increasing interest for HOP product over the last couple of years has been creating a higher demand that the producers may not be able to meet this year. Furthermore, after a period of expanding the crop fields and the eventual excess of supply, in 2020 the price of raw material started to go down, demotivating farmers to continue growing HOP leading to reduced supply. Currently the market demand for product exceeds the supply driving the price of HOP up, along with the other common factors affecting the industry. This is a cycle every several years, so there shouldn’t be an expectation of a more balanced HOP market for the next few seasons.
PINEAPPLE
For the summer crop, it seems the crop harvest will end sooner than the expected. The supply of fruit is rapidly decreasing and may be completely gone in a couple of weeks.
For the winter crop, there is not much information as of yet. Procurement teams are saying that farmers are waiting for rain to strengthen pineapple growth. Farmers not being able to provide expectations of crops at this point in time would mean that fruit will not be harvested until November/December which represents a delay for the season.
For packaging, tin plate suppliers have announced they will increase their price for delivery in Q3 6-8%. Last year they increased their price quarterly, so it is likely they will increase their prices again in Q4.
COCONUT
Vietnam – The price of raw material has come down a bit over the past few weeks but is being offset by the rising costs of packaging, production and labor. One of the reasons for the lower price of raw materials is the closure of the Chinese market which has slowed the demand for coconuts and all its by-products. Another reason is the European demand for coconut milk has been quiet. Several large retailers have postponed confirming their tenders. It’s unclear if this has been delayed by market price or if focus has shifted to more strategic products affected by the Ukraine situation. Pricing could come down further over the next few weeks to secure these European bookings. However, the US has been keeping the coconut water suppliers running at full capacity. We will see how these things will affect the pricing in 3-4 months as Vietnam enters the low season.
Thailand – Thailand is entering the peak harvesting season which will last thru August. The current supply has enough to satisfy production needs. A large retailer has pulled coconut milk items from their shelves due to forced monkey labor allegations. This is another reason why raw material supply is good. Although the price of raw materials is relaxing a bit, other costs are increasing. Therefore, the finished product price is not coming down. Pricing on packaging supplies – stickers, labels, cartons, and cans – is expected to increase again in Q3.
OTHER NEWS
THE EURO
Affected by rising risk of recessions across the euro zone and the US dollar strength, the EUR /USD rate fell to a 20-year lowest. So far this year EUR has dropped down about 10% against USD.
ECB continued to struggle with interest rates. There is also expectation for raising rates by Fed at the end of July, this could lead to a strengthening of USD. Traders and strategists medium term view on USD remains unchanged, continue to forecast a stronger greenback against EUR and other major currencies.
FARM LABOR SHORTAGE IN GREECE
The Agricultural Industry in Greece is struggling with providing labor with a shortage of up to 25,000 workers in the northen part of the country. Producers are reporting that the quality of harvesting work is very poor resulting in fields full of weeds, plants that are undernourished and about half of the ripe fruit has been harvested. The harvest cost has risen to more than 40% compared to last year, and workers are asking for daily payments. With farm labor shortage, soaring fertilizer prices, and increasing inflation, farmers are afraid of losing their crop if they do not get help. The producers have already demanded that the Greek government adopts a quicker and easier permit procedure for migrant agricultural labor as farmers are looking for seasonal workers from other countries. The situation is not only affecting the prices of the new crop but raises concerns about the quantity and the quality of the raw material. What we already witness is farmers being cautious and not ready to commit to both volumes and prices for their product putting additional stress to an already tenuous food supply chain.
