PINEAPPLE – THAILAND
Pineapple canners in Thailand remain vigilant amid scarce raw material supply and prices likely to increase. Southern canneries (11 companies operating) would be currently paying between THB 7.0-73 per kilo; raw material price in central areas, where two canneries are currently operating, would be THB 7.2/kg.The supply situation is not improving, with daily tonnage to canneries below half of the total production capacity.
Under current conditions, some factories have already stopped operating on Fridays and Saturdays. Many factories plan to shut down their operation from Mid-July till Mid-Oct. It is estimated that the price might be increased up to Baht 10./kg (USD 0.33) soon and packers are willing to wait untill October to be more accurate on supply and price.Due to the short raw material supply, packers can only offer what they have left in stock.
The export figure from Jan thru April 2019 is less than the same period last year by 16%.
This season’s Peru crops are looking good with great weather conditions. It will be a very similar campaign to 2018 both in volume and pricing, harvest is expected to start by mid-July and this will be a good campaign with good yields.
Greek Clingstone peach crop hasn’t started yet. There are still weather fluctuations in Greece and packers don’t rush quoting. In South California, first peaches will be ripe by the beginning of June and the season will run through August.
SKJ Tuna price talks in Bangkok’s market are currently close to USD1,400 per ton, a sharp drop from the USD1,550/ton reached in April.
Cold storage raw material supply is adequate for now in Bangkok, with many other sources saying prices are still likely to drop slightly.
Albacore situation remains unchanged with the fish price up to USD4,000 per ton, all packers are experiencing raw material shortage and shipment time is 3-4 months long. The price will be at this level until end of Q2 and hopefully we can see the movement again for July arrival.
Fad Ban is coming soon which will be incurred by July – Sep, that could be one of the reason for future price increment.
Current Tuna Market Raw Material Price:
SKJ = US$1400/ton
YFN = US$2000/ton
Albacore = US$4000 /ton
Tongol = US$1500/ton (limited supply)
Euro to USD Exchange Rate as of 05/24/2019 – $1.1208
EUR/USD has hit a new 2019 low at 1.1107, but this was only four pips beneath the previous trough, and it seemed to have marked the end of the downturn. The world’s most-popular currency pair staged a spectacular spring comeback and instead of dipping below 1.1100, it conquered 1.1200.
The forecasted rate in 1 week is between $1.1196- $1.1385
The forecasted rate in 4 week is between $1.1236- $1.1405
OTHER MARKET NEWS
Section 301 Tariffs – China
China Tariff increased to 25% – United States Trade Representative announced on May 8th that the 10% tariffs across $200 billion worth of goods from China would rise to 25% for all shipments with arrival after May 17th 2019.
The rates tend to slowly decrease due to Chinese tariff and since many importers stopped shipping. Although we may see increases from other countries.
Vessel owners are saying that prices are higher than last year ie $150 -250 for 20 FT and $300-450 for 40 FT containers depending on routing.
One major thing that will come in Sept / Oct is the discussion about how much bunker will be for 2020.
As of Jan. 1st 2020 there will be enforcement of the clean fuel usage on board vessels. If they do not have scrubbers installed on board then they will have to use low sulfur fuel which costs more.
- BKK to WC- $1,250/20’
- BKK to EC- $2,175/20’
- China to WC- $1,510-1,600/20’
- China to EC- $2,300-2,720/20’
June 1st General Rate Increase (GRI)
Carriers have announced new GRI effective June 1st, 2019. June is the beginning of the peak season and carriers will often start to push rates higher. However, the 25% China tariff will likely cause import volume to drop, making it more difficult for carriers to sustain a price hike.
Below is the announced GRI. Actual increases (if any) may vary.
Dry Season Hits Panama Canal
Panama Canal Authority (ACP) announced new draught reduction effective from April 30th, 2019. Depending on the water level of Gatun Lake, vessel with draughts over 13.41 meters may be required to trim or off-load cargo in order to pass through the canal.
Until the water level returns to normal, carriers will reduce the number of heavy containers they accept per vessel. Some carriers will stop accepting heavy cargo completely. The waterway authorities reported that the period from Dec, 2018 to March, 2019 has been the driest in the last 106 years.
India – GSP
On March 4th, President Donald Trump announced canceling GSP from India, however further announcement hasn’t been made how to file Customs entries, etc. The US has indicated that it will not withdraw the Generalised System of Preferences (GSP) scheme offering duty free access to over 3,000 Indian products till the ongoing general elections in India are over and a new government is in place.
Turkey – GSP
The United States on May 16th terminated Turkey’s preferential trade treatment that became effective May 17th.
Proposed New Tariffs on EU products
The U.S. Trade Representative has announced a proposed retaliation list for EU goods. This will result in additional duties for certain imports likely sometime this summer. This is the result of the WTO Airbus dispute, in which the WTO found that the EU subsidies to Airbus have caused adverse effects to the United States. The proposed tariff list covers $11 billion in trade between the EU and the U.S. each year.
There are two section “Section 1” and “Section 2” on the preliminary list. “Section 1” is very specific which associated with aircraft items that are from France, Germany, Spain and UK. “Section 2” covers broad items and all 28 EU member origin are subject to.
The items that might be subject to section 2 are the following:
1509.10.20 – Organic extra virgin olive oil <18kg/bottle, Extra virgin oil <18kg/bottle
1509.90.20 – Olive oil <18kg/bottle
1905.31.00 – Sweet biscuits such as Ginger thin cookies
2005.70.08/16/23 – green olives
2007.99.15 – Blackberry jam/preserve, Boysenberry preserve
Note, also Apricot jam/preserve, Cherry jam/preserve, Guava jam/preserve, Peach jam/preserve, Pineapple jam/preserves, mixed berry jam/preserves are subject to section 2.
The proposed additional duty is “up to 100%” and detail is unknown at this time. If this EU tariff move forward, the additional duty would possibly take effect in summer/fall of 2019.
As of today, there are no further updates.