TUNA
FAD CLOSURE period has ended and Skipjack in the market is trading at $1,700/mt, no indications of any further decrease due to the low supply vs. demand. Yellowfin price has been reduced about 20% especially for the larger sizes. Tongol season is finished, and prices intend to increase in the next couple of months. Albacore remains steady.
Raw Material Price
SKJ = US $1,700/ton
YFN = US $2,000/ton
Albacore = US $2,900/ton
Tongol = US $2,000/ton
COCONUT
It is currently the low season for coconuts. This means higher prices than in previous months as supplies are depleted. The low supply of raw material in addition to the lower demand from the coconut milk manufacturers is affecting the availability of coconut water. With the lower demand for coconut milk there are fewer coconuts being cracked to coincide with the coconut water packers’ needs. Another contributing factor to the current low supply of raw material is the continued export of whole coconuts to foreign produce markets, such as China. The supply of raw material is expected to remain low through Q1/Q2 2024 until new crops are ready in April/May onward. However, the rainy season in the Coconut producing regions has been severely impacted by El Nino so farmers are predicting short supply compared to previous years and steep price increases. Buyers are urged to plan forecasts now and place spread orders to cover their needs through 2024. It’s better not to place large quantity rush orders over a short period as there may not be enough supply to fulfill these orders.
PINEAPPLE
Thai pineapple industry has limited supply this winter season affected by El Nino & drought since first half of this year. The raw materials are about 40% less, most factories have delayed starting production until end Oct/ early Nov., about 4 weeks later than normal situation. Raw material price is high around 0.25-0.26/kg, which is about 0.07-0.08/kg higher than the last crop. Once water crop production starts, prices will further increase due to factories competing with each other to secure raw material and feed their minimum production.
MANDARIN ORANGES
Mandarin orange pack season normally starts from late October and ends in late January. W regions would start production little bit earlier than L regions. This year is expected to be a good harvest season, if the climate continues to be stable till harvest period, 2023 will be a good year for mandarin oranges and the raw material prices will be lower. The cost of canned mandarin orange includes raw material cost, tinplate empty can cost, sugar cost, labor cost and packaging materials cost, and the level of foreign exchange rate also directly affects the price in 2023/2024 crop, the key factors to canned orange cost is the price of raw materials and labor cost. Currently factories estimated price will be close to the last crop’s average price.
OLIVE OIL
Olive oil production in Spain will not exceed 1 million tons in the 2023/24 crop year, according to Luis Planas, Spain’s acting minister of agriculture, fisheries, and food. The September rain in Spain has been beneficial in some areas, though not as much as expected. Stormy weather has affected some groves and only a small percentage of rainfall has been collected in reservoirs, due to flooding and violent precipitation. Rainfall in recent weeks has slightly improved the situation in the olive groves, but many producers warned that it came too late to save this harvest, instead improving conditions for 2024/25. The expectation is that production would almost certainly surpass the historic low of 663,000 tons produced in 2022/23, 54% below the average of the previous four years. Still, there are no official forecasts of new crop production yet. The industry works on the assumption that the new crop will be slightly better than the last crop. The prices of olive oils (ex mill raw material prices) have gone down just slightly as compared to late August, thanks to the destruction of demand. In addition, the expected Spanish carryover is about 250.000 metric tons at the end of September. This amount is just barely enough to hold the market until the production of fresh olive oil at the beginning of November. In terms of quality, the tests of yield of olive oil on olives are in general better than last year. Despite a lower yield, the drought favored higher quality. The olives have less moisture and, during the oil production process, it will lose fewer antioxidants, thus resulting into extra virgin olive oil that will be more powerful, bitter and spicy, of excellent quality and healthier due to the high polyphenol content that is expected.
In theory, all factors point towards a decreasing price trend as fresh olive oil is on the market. The question that nobody can answer yet is how much and at what pace the prices may go down.
OTHER NEWS
THE EURO
The U.S. dollar has strengthened over the past few weeks, starting the new quarter with a stronger position. And it remains stability and strength after that. The euro weakened to a low of 1.0470 in October. Central banks continue to tighten monetary policy by more than previously anticipated to control inflation pressures. On the other hand, for the rest of year 2023 and 2024, bank analysts still believe the U.S. economy will slip into recession and rates will be cut eventually, which may lead to a weaker USD position long term.
