Chunk Light Tuna: The chunk light tuna market is at the bottom. Since raw material is at a very low price, it is not profitable for fisherman to sell their catch to packers who are unwilling to process and pack it at the current market prices. There are two prominent species of tuna being used for Chunk Light Tuna. Over the past few years, Skipjack has been the traditional species and now Bonito is being processed in China and Vietnam, where labor rates are lower than Thailand. From certain factories, the quality of Bonito is much lighter in color than Skipjack (and at a lower cost), making it a very good value!
Tongol Tuna: Tongol is lightest in color of the light meat tunas, but is used as an alternative to the higher priced Albacore. Tongol is packed in all of the traditional tuna producing countries: Thailand, Indonesia, and Vietnam. Vietnam has a very short fishing season, which is in the fall, but they do receive limited quantities of raw material during the rest of the year. When raw material is available, the quality of fish from Vietnam is preferable. Indonesia is also a quality packer of Tongol and typically their prices are more competitive than Thailand. The market for Tongol tuna has been fairly stable the past few months with fluctuations of about +6%.
Albacore Tuna: The heaviest fishing season for Albacore is in April. Raw material has been in steady supply, but as of recently, it is a bit tight with prices firming. Fishing boats are coming in from the sea now for the upcoming Chinese New Year on February 8 (which lasts for about 10 days). Prices are firm and will continue to be so until at least April when the new season begins.
Due to significant overcapacity of the world’s leading steamship carriers and the advent of the new Panamax super sized vessels coming into service, ocean freight rates have continued to decline. The precipitous drop in oil prices has also been a large factor in the declining ocean freight rates. Through a variety of surcharges, the ocean carriers are attempting to raise rates to a profitable levels, but overcapacity is not going away easily. We can expect severe fluctuation in ocean freight rates in the coming months.
The cargo vessels used for international shipments over the past 20 years or so will hold about 8,000 TEUs (twenty food equivalent units – 1 teu = about 1 TL domestically) and the new Panamax vessels hold about 14,000 TEUs!
Writing a blog can be a challenge! We want to keep our trade up to date on the products we import (from over 25 countries) and we want our information to be meaningful to you. Keep in mind that we are always looking ahead at least 3 months, as that is about the minimum lead time to receive a shipment. Our supply chain is greatly affected by worldwide holidays such at the Chinese New Year (this year beginning February 8), the Southeast Asian New Year (or Water Festival in early April), summer holidays/factory closures in Europe, and Ramadan (the month long celebration in the Islamic calendar).
Our objective is to have all of our products in stock at all of our 8 USA distribution centers, 52 weeks per year, while combating all of the above factors. We believe we accomplish this quite efficiently! Thanks for reading this blog and stay tuned for more market information in the coming weeks/months.
The pricing of olive oil is quite complex. There are several very large olive oil companies who can change the market with just a few trades, which makes the market very difficult to predict. The fact is Spain, the world’s largest producer of olive oil, came up short of budget and a lack of rain late in the season put an upside pressure on pricing, despite weak consumption. Predicting pricing on olive oil is a very risky business, but currently pricing is steady with a lot of upward pressure.
The new crop of olives begins in April when the trees begin to flower. Professionals can get an early indication as to the yield of the upcoming crop by analyzing the amount of flowers on the trees and the amount of growth on the branches. Then, of course, they need favorable weather during the next 6 months of growing into the fall harvest to ensure a good crop.
Reports coming in from the major pineapple growing regions throughout Southeast Asia point to a continued supply shortage and high pineapple prices. The El Nino effect is generating adverse weather conditions throughout Thailand and Indonesia, with water shortages stunting fruit growth and making harvests much smaller than usual. Thai packers are claiming shortfalls of 15% in December 2015 when compared to the same period in 2014, while Indonesian factories have started seeing up to 60% less in raw material in the past months than the same period a year before. To compound the issue, many factories are still working on filling back orders from last season, which makes the limited raw material available that much more of a commodity. These crop issues do not point towards any sort of pricing relief on pineapple in the near future.