The Thai Pineapple Industry Association has recently met and delivered its estimate of 1.4 million tons as Thailand’s total fresh pineapple production for 2015. In normal years, Thailand produces about 2 million tons of fruit, so this is about a 30% shortage. Some of the fruit will go to the fresh market, leaving the processors, canneries and juice concentrate manufacturers, with less fruit than in 2014 along with sky-rocketing prices that were unheard of in the past. In “normal years” fresh pineapple costs about 3.50-4.50 Baht per kilo, but right now fresh fruit is trading at around 12-13 Baht per kilo.
Some of the shortage is linked to the unusual weather pattern and an exceptionally strong El Nino that has been bringing lots of rain to parts of the world that are normally dry and drought to other parts, like Southeast Asia, where it should normally rain during “rainy season”. Processors fear that September 2015 to February 2016 is going to be the worst dry season the crop has ever seen. They don’t foresee any increase in the fruit supply and they predict the fruit supply to be about 40% less than what the industry needs.
Other than the weather-related crop fallout, a large part of the shortage can be explained by the “boom-and-bust” nature of the Thai pineapple industry. When the fruit prices plummet, farmers abandon their crops and grow something else that’s more profitable. Given the current high prices, farmers are expected to drift back to pineapple cultivation next year but no worthwhile increase in production can be expected before next year’s summer crop, at the very earliest.
For the time being, offers for canned pineapple from Thailand are scarce, prices are extremely high and packers are cautious about making commitments for large quantities as they continue dealing with back-orders. Other pineapple producing countries such as Indonesia or China are struggling to keep up with the high demand and can’t make up for the shortfall of Thailand, which is one of the largest pineapple exporters of the world.
The new olive crop in Spain was predicted to be close to “normal average” a couple of months ago, however, the exceptionally hot weather in Europe in July & August seems to have caused problems. One of the main problems is that some of the fruit has shriveled and fallen off the trees prematurely, thus reducing the expected harvest volume. Packers are concerned that there will be even less Hojiblanca olives, which are normally used for ripe olives and olive oil, than last year.
Soaring prices and low carryover of olive oil isn’t helping the situation either. We can expect table olive packers to compete for the same raw material as olive oil manufacturers which will drive the prices up. We have started seeing higher offers for ripe olives even though packers are still using fruit from last year’s crop.
Recent articles in the international media have reported on the world olive oil shortage and subsequent rise in prices due to the poor harvest in Spain and Italy last year (these two countries are responsible for 70% of the global olive oil output). Spain has suffered from extreme heat and drought in the summer of 2014 as well as 2015. Italy was hit with fruit fly infestations and the deadly Xylella fastidiosa bacterium which has decimated olive groves in the Puglia region and is feared to have spread to other parts of Southern Europe. There are reported cases on the island of Corsica where France is trying hard to contain the outbreak.
The crop of other Spanish olive varieties, for example Manzanillas and Gordal (Queen) olives, look alright so far and growers expect an average harvest volume. Further information on the crop size by variety should be available soon. The ANUGA International Food Show in Cologne, Germany is coming up on October 20th, where packers usually announce their new crop prices for ripe olives. Green table olive prices will be revealed later, after the fermentation is complete and packers have a better estimate on the volume of the various calibers of olives.
As reported in our June posting, anchovy raw material still remains short. After the fish has been caught, it takes up to 3 months to fully cure, so it can be cleaned and packed into cans. The demand is very strong and for those with a good source of supply, like us, it is very difficult to keep up with the need. Raw material will remain short throughout the rest of this year. Pricing is firm and fillets will trend toward the smaller size since that is all that is being caught recently.
It has now become apparent that olive oil demand is higher than the available supply. Spain usually supplies about 40% of the world wide demand, however this year they could only supply 34% leaving an appreciable gap. Other Mediterranean suppliers, Italy, Greece, Turkey, Morocco, and Tunisia, cannot pick up the big void left by Spain. There is significant concern that there will be very little carryover for the new crop this fall. These factors have firmed up all Olive Oil grades significantly the past couple of months, and the trend will continue until the end of the calendar year for sure.
Here at Schreiber, we import peaches from both Greece and China. The Chinese factories require much more labor than the Greek, whose factories are highly automated. The Chinese crop began in early July and the Greek crop about July 15th. There are many varieties of yellow peaches all over the world each having slightly different characteristics.
The Chinese peaches have been larger than usual, which is good for dices and slices. Pricing is similar to last year and quantities should be adequate.
The Greek peaches have been slow coming out of the field and the size has been smaller than usual. Despite the eagerness of the farmers to sell their crops, they have not been able to supply some of the larger packers with the quantities they need to run 3 shifts. Greece is the world’s largest producer of canned peaches, but they are concerned about their total output this season. Last year, it cost $1.40 to buy one Euro, and this year it costs only about $1.10!
So, yes, it would seem as though the price should be lower than last year, but the raw material has gone up in price, and the world wide market is underserved creating a strong demand. New crop peaches will be arriving in the USA by the end of August, early September. Greek peaches will cost more than then Chinese, but still less than California.