As reported in January, Mandarin Oranges have proven to be difficult this year. Product continues to be in short supply due to no carry-over from the previous year, bad crop conditions, and a decrease in labor pool. Prices have increased dramatically over the past 2 months, with increases as high as 20-25%. Whole Segments in Juice are the most difficult to secure at the moment. Many suppliers indicate they are sold out completely until new crop.
We expect prices will continue to hold at these higher levels until new crop begins. The challenge will be securing enough product to hold until the new crop.
Canned pineapple production in Thailand to remain stable. The pineapple processing industry in Thailand is about to enter the peak season this month. Canned pineapple prices have finally reached a comfortable level that allows both growers and processors to make a living.
Boom-and-bust cycles are well known in the pineapple business; they occur periodically when supply and demand are out of balance due to a disastrous crop or lack of interest in growing pineapple due to low raw material prices. The industry was dealing with extremely high prices and shortages during 2015 and 2016; then the trend finally turned around in 2017: prices started to come down and reached the bottom by the end of the year. Packers have finally caught up with orders and started to built up inventories to a healthy level.
Our sources don’t expect the prices to change much in the near future; the summer crop looks decent and the raw material prices have stabilized. On the long run though there are hints about shortages for the winter crop as some growers are switching to other crops because they aren’t happy with the current prices. “Normal” fresh pineapple prices (about 5-6 Baht per kilo) are considered rather low compared to the previous 2-3 year highs (as high as 13-14 Baht per kilo), resulting in some farmers’ turning away from pineapple cultivation or paying less attention to their plantations. This practice is common and will affect the yield of the winter crop.
Our packers believe that this is a good time to contract for canned pineapple for spread shipment as they expect the market to firm up later during the year.
The antidumping duty rates for Spanish ripe olives came in late last Friday and they are, unfortunately, quite high.
“The Department of Commerce preliminarily determines that ripe olives from Spain are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is April 1, 2016, through March 31, 2017. “
Here are the estimated weighted-average dumping margins, together with the previously determined countervailing duty rates:
|AD duty rate
||CV duty rate
|Agro Sevilla Aceitunas S.COOP
|Angel Camacho Alimentación
These duty rates will go into effect on the day this ruling is published (later this week) in the Federal Register and importers on record will have to pay cash deposits to CBP after every entry, effective immediately.
The United States Antidumping Law and Practice allows that any exporter of the goods which are subject to that order request that Commerce conduct a review of the previous year’s imports, one year after publication of an antidumping order, as well as during each subsequent year. The purpose of these administrative annual reviews is to calculate and assess the exact amount by which the foreign market value exceeded the U.S. price of each importation during that year and to recalculate the estimated duty rate for deposits on future entries of the goods.
An administrative review is conducted in essentially the same manner as Commerce’s initial antidumping investigation, and generally must be completed within one year. Commerce will issue a questionnaire similar to that used in the original investigation and will calculate preliminary and final antidumping margins.
Depending on the new margin calculation an importer can receive a refund plus interest if the estimated duty deposit was too high or pay additional sum plus interest if the estimated duty previously paid was too low.
All species of tuna have been in short supply the past 6 months or so with prices climbing steadily. It seems as though there is no relief in sight now as landings of raw material are erratic and are not enough to meet demand. Skipjack raw material prices had fallen in certain producing markets during the first 3 weeks of January, which most likely are for small fish that have a lower yield. The season for higher catches is typically around April; therefore no one is expecting relief in pricing until May or June at the earliest.
- Chunk Light has increased steadily over the past 6 months and is now reaching the highest price in recent memory.
- Yellowfin, which was significantly cheaper than Tongol, is now almost the same cost.
- Tongol, the lightest of ‘light’ tuna, has been especially short and pricing reflects the short supply.
- Albacore is now in very short supply, and the issue isn’t always the high cost, it is also only available in limited quantities. Albacore is a completely sellers’ market and right now the demand is higher than the supply.
Pouch tuna fish is a viable option to canned tuna fish. Although typically more expensive than canned due to labor intensity, now it can be comparably priced. The reason for this is that pouch tuna is only packed with flakes, which is not as costly as chunks. Pouch tuna is an excellent alternative to canned for manufacturers as there is no draining required and the waste is significantly less because an empty pouch takes up less room than an empty can. Pouched tuna comes in Light and Albacore.
2017/2018 proves to be another tough season for mandarin oranges in China. Since the previous season was short, partially because the Chinese New Year started relatively early (January 28, 2017), and partially because of a short fruit crop, there was practically no carryover before the new season and buyers could hardly wait for the fresh production to begin.
If we thought that the situation could not be any worse than last year, we were wrong as this season seems to be quite a disaster. Raw material supply is short and a decrease in available labor in all packing areas, when compared to the previous year, forced factories to firm up their quotes to compensate for the decrease in production.
Packing mandarin orange segments is very labor intensive since every single fruit has to be peeled and segmented by hand and factories are unable to fill all shifts and all production lines with workers. It has been reported that the price of the raw material is still on the upward trend and offers for finished product, both retail and foodservice, are following the same path.
For this reason, many factories are reluctant to speculate and they only produce for firm orders that reflect the day’s raw material price and have prompt shipping dates. Even though Chinese New year is late this year (February 16, 2018), factories aren’t planning to pack mandarin oranges until that date like they used to because of the above reasons.
In addition, the Chinese currency (RMB or Yuan) has been steadily gaining value against the USD and reached its highest level since end 2015. The weak dollar, together with the higher cost of labor, sugar, tin plate and cardboard are all adding to the already firm market prices of canned mandarin oranges.