Most canneries are shut down from August/September and will resume by mid/end of October. A historically long recess anticipating harvest will initiate from late October onwards. Recent rain showers will help farmers to force programs with good prospects for January/February 2020 to get more fruit to process. Global demand resistance will be the factor to pressure farm gate prices to be in a low range around150 USD per ton. Hopefully 2020 will be an improvement year with 1,500,000 tons minimum harvest.
The Peruvian artichoke campaign has entered its peak. Fields are producing at the expected yields. Temperature is slightly cooler than normal for this time of the year, however this should not impact the overall crop. This is the perfect timie to close any additional volume deals, prices are very competitive.
China’s pear raw material production is expected to decline due to heavy rainfall and flooding in specific harvesting regions. The growing season would normally last through the end of October, but this year may be over as early as end of September. New U.S. tariffs on Chinese pears (now 30%) will impact cost significantly, leading to increased prices compared to last season.
Avocado crops are still in flowering season; next year yields will be clearer at the end of the year. The season typically starts in April.
The 2019 crop season of Bamboo shoots is going to the end this month. Overall the crop (outlook, forecast, duration, weather) looks similar to 2018.
Mango season is expected to start in November. So far crops look fine and at expected volume. Timing is good to conclude deals.
The prices for Skipjack Tuna raw material have increased in the last two months from a record low level reached in July. Prices for September deliveries to Bangkok are settling at $1,350/1,400/MT, an increase of around $200 over the previous month. Albacore tuna is still in short supply, most processing plants are not receiving enough raw materials to run their production lines, and shipments are as far out as November/December for new offers.
Current Tuna Market Raw Material Price:
SKJ = US$1350/ton
YFN = US$1700/ton
Albacore = US$4000 /ton
Tongol = US$1700/ton
The Euro to US Dollar exchange rate remains at the same level it was previously:
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
“Blanked” sailing during Golden Week:
Carriers have announced additional blank more sailing around Golden Week. The dry docking of ships for scrubber installation in line with the global low-sulfur fuel mandate that takes effect January 1, 2010, gives carriers a natural avenue to do so.
During Golden Week in China, which this year is October 2-7, many factories close and US containerized imports drop substantially. Carriers each year respond by cancelling sailings, not only for Golden Week, but also during the several ensuing weeks. Implementation of the International Maritime Organization’s global low-sulfur fuel requirement could give carriers a way to blank sailings while also preparing vessels for compliance. Carriers are installing scrubbers on some vessels to achieve sulfur reduction while still burning high sulfur fuel; a vessel must be removed from service for about 3 weeks for installation.
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’