Packers resumed work in mid/end of October. The supply situation is not improving. Prices increased by 30% and packers can only offer based on the raw material they can secure.
Packers advised that in general pricing are going up again. The raw material was increased since then up to 30%. (Sesame price in October 2018 was @ $1850. Today the price increased up to $2400). Foreign currency differentials/losses 5%. (November 1st 2018 USD/ILS was 3.71 – Today is 3.55)
The general manufacturing, labor, packaging (especially plastic materials), water, electricity, etc. another raise of 10%. As you can appreciate 2019 was very difficult year to maintain a cost effective supply chain of organic sesame at the prices we assumed we could get. For the new crop so far, we received positive indication which we hope can bring us close to the level of price we could buy sesame at the end of 2018 – beginning of 2019, which is around $1900 – $2000/ ton.
Very bad crop situation in Hunan/Hubei (W) region this season, supply reduced by 30%-40%. Raw material price is 40% higher than last season. Price was $0.11-$0.14/kg last season vs $0.18-$0.20/kg this season. Packers anticipate it could go up to $0.24-$0.28/kg. Zhe Jiang province (L) had a normal crop and price is stable at 0.14/kg but could go up once W region is out of supply.
Due to long rainy season in India, crops are damaged. Overall crop output for 2020 will be low. Recommend to book 2020 needs now as next crop shipment can only be from Feb 2020.
Pricing for preserves went up. This was caused by several reasons: mostly by conventional sugar prices increase by approx. 40%. This had an impact on most of products. In addition to this, crop of berries was bad for especially raspberry, due to very poor outcome.
The USTR’ notice to the Federal Register in regards to goods entered for consumptions, or withdrawn from warehouse from consumption on Oct. 18 onwards – came to an effect. The punitive tariffs on the products (detailed list was published) is equal to 25 percent of the value of the merchandise and will be incurred in additional to any existing tariffs. There is no timeframe for how long the tariffs will remain in place. The hope is that the U.S. and EU will reach an agreement soon that satisfies the U.S. enough that it removes the tariffs. Olive oil originated in Spain falls under this tariff.
The price for skipjack tuna raw material landed in Bangkok, Thailand, is currently USD1,000 per MT, a significant drop from the last rise reported in September USD1,300-1,350/MT. Albacore will continue to be short of supply, price is extremely high and no fish available in the market. There’s no sign of improvement in term of supply and price.
Current Tuna Market Raw Material Price:
SKJ = US$1000/ton
YFN = US$1500/ton
Albacore = US$4000-$4100 /ton
Tongol = US$1800/ton
The Euro to US Dollar exchange rate is now at $1.11,
increased from $1.08 last month.
OCEAN FREIGHT Sulfur scrubbing will take effect in Jan 2020. West coast rates might go up by $160-$200 per 20’ and $200-$250 per 40’. East coast rates might go up by $240-$280 per 20’ and $300-$350 per 40’.
- 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’
OTHER MARKET NEWS
THAILAND – GSP revoked
USTR announced GSP enforcement actions and successes for seven countries on 10/25 which includes Thailand. The following ACME products will be affected from this starting April 25th, 2020.
Coconut Water 100% – from Free to $0.005/liter
Watermelon Juice- from Free to $0.005/liter
Jackfruit in Water- from Free to 6%
Rice Noodles – from Free to 6.4%
Coconut Milk – from Free to TBA (not on list need verify)
PROPOSED NEW TARIFFS ON EU PRODUCTS
USTR issued the list of EU goods that subject to additional 10%-25% duty as the result of WTO’s ruling in the Airbus subsidies case. The tariffs of the following ACME products are set to take effect Oct 18th, 2019 with additional 25% duty.
Spain Extra Virgin Olive Oil
Spain Organic Extra Virgin Olive Oil
Spain Olive Oil
Spain Green Olive pitted or stuffed
SECTION 301 TARIFFS – CHINA
President Trump has canceled the October 15th Section 301 increase from 25% to 30% on Oct 11th. No further news when this could take effect again.