TUNA
SKJ Tuna price has reached $2,000 per ton landed in Bangkok since early May, another 9% jump from April. This is the highest level since 2017. Poor fishing resulted in low frozen raw material inventories at canneries to date. Catches in the Eastern Pacific Ocean was dropped by 15% in the same period of previous year.
Current Tuna Market Raw Material Price:
SKJ = US$2,000/ton
YFN = US$2,500/ton very limited supply
Albacore = US$3,600/ton limited supply
Tongol = US$2,200/ton short supply
ROASTED RED PEPPERS
The new season of Roasted Red Peppers (RRP) in Peru begins in August, but packers have already advised their customers that the price increase of the product will be significant. Despite the good weather and promising volumes, there are other factors that are driving the cost up. It is the same challenges that the industry faces with any other product that apply for RRP as well: increased cost of packaging material, labor, energy and logistic. The estimation is an overall increase of 30-35% in the cost structure in comparison to last year. With International logistics still complicated due to high freight rates and limited container availability, keeping up with the increasing demand for RRP products will continue to be a challenge.
PINEAPPLE
Early estimates for the Thai pineapple crop in May are at around 140,000 tonnes, against 124,000 tonnes last year. The crop in June this year is expected to be smaller than the one in May, but larger than June last year. May and June are the two months in which the harvest reaches its peak. Fruit prices are softening from rates of THB8.5 per kilo in late March to the current THB6-7 per kilo ex-works, with no further decreases expected. Good demand for the raw material is likely in the next six weeks as the industry needs to secure build-to-stock canned pineapple products for the second half of the year – fruit supply in July, August and September is very limited. On the one hand, local industry contacts have been reporting a “slow market” for canned pineapple, ongoing since Q3 2021 and owed to freight disruptions as well as high rates. More recently, due to the war in eastern Europe, some canneries are having to shift their product elsewhere or even stock it at warehouses: Thailand ships around 6% of its total volume to Russia every year. Therefore, some Thai pineapple processors are planning to decrease final product prices by USD0.5-1.0 per carton in order to reduce stocked product. This is also in the context of the US dollar currently trading strong against the Thai Baht. On the other hand, some Thai canneries closed the deal for “big” contracts at the Gulfood trade fair held in Dubai last February, which have re-activated the market with shipments delivered in April and May. The next industry gathering will take place in the Thaifex trade fair, to be held in Bangkok on 24-27 May. Reference prices quoted this week for 20oz canned pineapple slices in light syrup are at around USD15.5-16.5 fob Thailand, down compared with last year’s quotes of USD18 per carton fob for the same period. Industry sources explained that this price difference is the result of a better crop compared with that of 2019 and H12021, together with lower fruit prices.
COCONUT
The main harvest season has started, and it is time to reserve quantities at origins. Price of raw material is currently stable as supply is steady. Price increases in transportation, packaging and production continue to have a greater impact on over-all pricing than raw materials. The price of finished goods is expected to continue to keep rising through the end of the 2022 season.
Recently ocean freight space has been a little easier to obtain and pricing has eased up a bit out of the coconut producing regions. However, as Shanghai reopens after a 7-week lockdown, capacity may be reduced, and pricing could rise again.
MUSHROOMS
Increased demand coupled with a decrease in supply and challenges in the supply chain will increase prices for all origins. The mushroom industry has been greatly impacted by the Ukraine crisis which has affected all stages of production from raw materials, labor, and packaging to transportation. Mushroom suppliers are faced with unprecedented increased prices in packaging, transportation, compost and ingredients for mushroom growing and canning. Mushroom growers are also facing challenges such as risks related to crop diseases, abnormal temperature changes and extreme weather events. These could reduce growth opportunities.
OTHER NEWS
THE EURO
EUR/USD traded is to a two-year lowest point this quarter and remaining in a short-term resistance area around 1.0445-1.0550. The escalating situation in Ukraine and the interest rates are still the first two reasons for the euro decline. In addition to these, the recent ECB minutes expressed concerns over inflation which also caused trading movement. EUR/USD is currently trading near 1.0578. Some of the Bank Analysts now believe EUR/USD will reach 1.00 in 3rd quarter, 2022, and expect to stay close to 1.00 with only modest movement thereafter.
OCEAN FREIGHT AND SUPPLY CHAIN
Asia → North America (TPEB) Uncertainty around the timeline for Shanghai reopening and ILWU negotiations further muddy the Transpacific Eastbound (TPEB) market outlook. Restrictions continue to be in place due to Covid-19 outbreaks in the major manufacturing region around Shanghai. Long-anticipated International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) labor negotiations are now underway as stakeholders of every kind anxiously await news of agreements being reached. As the traditional peak season approaches, demand remains soft overall in the current TPEB market. For cargo ready now, importers might consider taking advantage of currently available space and softer floating market rates.
Rates: Levels remain elevated relative to the pre-Covid market with softening in many major pockets, especially into U.S. west coast (USWC) ports.
Space: Open in most areas.
Capacity/Equipment: Open in most areas.
Recommendation: Book at least 2-4 weeks prior to cargo ready date (CRD). Consider premium options where needed. Be flexible in regard to equipment and routings. Check closely with suppliers to understand any Covid-related impacts or changes to production outputs and forecasts.
Europe → North America (TAWB) Congestion is still improving at USWC ports with vessel waiting time down to 10-17 days. The U.S. east coast (USEC), especially Charleston, has shown some signs of improvement with delays of 1-4 days. Houston is still the worst-performing with delays of up to 8 days.
Rates: A strong trend remains in place as demand continues to outpace capacity. Expect this trend to continue for the next several months.
Space: Critical for both USEC and USWC due to ongoing (improved) congestion and continuing strong demand. Some ad hoc space is opening for USWC on specific services.
Capacity/Equipment: Capacity remains tight for both North Europe and Mediterranean services. Better equipment availability at port. Shortages remain at inland depots.
Recommendation: Book 5 or more weeks prior to CRD. Request premium service for higher reliability and no-roll.
