Schreiber Foods International, Inc.
Importers of Ambrosia® and Other Fine Brands
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As reported in May, Mandarin Oranges continue to be very difficult, with supply almost nonexistent in China.  Prices rose drastically from April-July with increases as high as 25-30%. Some believe that there may be a few available stocks come September when the suppliers take a good look at what is left in the warehouse vs. what is expected to ship on contracts.  We expect prices to hold firm until the new crop.  New harvest normally begins at the end of October to early November, with shipments of canned mandarin oranges arriving at the end of December or early January.  There will be little to no carryover going into the new crop that is expected to be better than last year’s.  We should see some relief in prices heading into the New Year.

Mandarin Oranges are Tight and Expensive

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.

Tuna: Pricing and Current Supply

Skipjack, the bellwether of the tuna market, has been steadily rising in price to near historic levels.  Typically the new fishing season begins in spring, but not much fish have been landing.  Pricing a few months ago was around $1,750/ton for raw material, and the market expected it to bottom out at $1,500/ton.  Due to low volume of fish, the market is now expected to hit $1,900/ton this week!  We expect prices to continue to rise with no reductions in sight.  Shipments are also delayed due to this shortage of raw material.

Tongol is now very high priced but a good alternative is Yellowfin.  Typically, Yellowfin is only a couple of dollars lower than Tongol which is why most have gravitated towards Tongol.  Now the cost difference is about 10%, and Yellowfin is good looking tuna and looks even better with a bigger price spread.

Albacore has been firm and steady in pricing, but raw material has been tight on the supply side, creating some delays in exports out of producing countries such as Thailand and Indonesia.

A word of caution; be alert to some below market quotes!  There is a lot of product being quoted with drained weights below the US FDA minimum, by almost 12%!  Caveat Emptor, ‘Let the buyer beware’!

Olive Oil: Current Crop Situation

Olive Oil

Although the olive trees in Spain have begun the new growing season on a good note, we are still a long way from the harvest, which begins in the fall.  The trees require sufficient rain to allow the olives to mature to normal sizing.

The carry over from the last crop, plus the production of the current crop year (2016/2017) make up the total available for the year.  Both the carryover and new crop for 2016/2017 were below budget, putting us into a very strong seller’s market due to the short supply.  Prices have risen persistently since January and will continue to do so until the beginning of 2018!

Pomace in particular is very short in supply and extra virgin is short as well. The expectation is that as prices advance, sales will slow down which will hopefully allow the limited inventory to last until the new crop. To make matters worse, the value of the US dollar has dropped by about 8.5% in the past 2 months, increasing the cost of oil and all other European imports.

Mandarin Oranges: Brief Update

As reported early January, Chinese Mandarin Orange packers finished production early this year because of a shorter than usual crop and because of labor shortages.

According to our sources, most processors have packed product for firm orders only, and hardly any packer has surplus inventory for future sales, especially in Foodservice can sizes. U.S. importers that didn’t cover their requirements for the entire season are finding out now that the prices are up by about 10%.

We expect the mandarin orange market to remain firm throughout the year.


Pineapple: Update Summer 2016

According to the recent report of The Thai Food Processors’ Association, El Nino caused higher temperatures than normal during the first months of the year which threatened the upcoming pineapple crop and damaged the plantations greatly. Around 30-40% of the crop was affected with damages including sun-burnt fruits. Because of the severe drought that El Nino has brought on, farmers were unable to properly care for their plants that will result in a delayed winter crop.

Since the fruit supply has been low, there hasn’t been enough for cannery production, forcing packers to run with half capacity. Most packers are struggling to fulfill their contracts and shipments are delayed by several months because of the insufficient fruit supply.

The total crop outlook from January through the annual shutdown in August has been predicted to be around 1.1 million tons of fruit which is about 30% less than harvested the same period last year. Because of this severe shortage raw material prices are expected to increase to THB 14.50-15.50/kg.

Apart from dealing with expensive raw material, Thai pineapple packers are forced to pay more for tinplate as well; the price was increased by USD $30.00/ ton in 2Q16 and by another USD $130.00/ton in 3Q16.

At the recent New York Fancy Food Show, some Thai packers claimed there wouldn’t be a relief in pineapple supply before the winter crop of 2017, given the long growing cycle of the fruit.

Tuna Fish: Current Market

Tuna Fish:

As last reported in February, prices were so low that fisherman and canneries were not able to sell profitably.  For Skipjack, the bellwether of the tuna market, prices have significantly increased over the past couple of months and raw material has not been plentiful. Prices are up $2.00-$3.00/case and are showing no sign of retreating.

Fishing of Tongol and Albacore has had very little success, which pushes up the price of raw material.  Over the past few months, the prices of these canned products have been steadily increasing and as of recently, even less raw material is landing.  Tongol price has increased by as much as $5.00/case and Albacore by $2.00-$3.00/case.  April and May are the best time to catch fish, but this year it has been far below an average catch.  If things don’t improve soon, we will see a very strong market.

Ocean Freight: Pending Rate Change May Mean Higher Ocean Freight

ContainerOver the past several weeks, carriers in the Asia to USA trade have been discussing the idea of changing how rates are calculated for a 20’ container. The current rate for a 20’ container is essentially calculated by multiplying 80% of the dry 40’ container rate. The change being discussed that will be implemented in the 2015-2016 contract year will be increasing the current calculation of 80% to 90% of the dry 40’ container rate.

The reason for this increase is fairly well documented by the carriers and below are some of the reasons:
– Demand for service via the Panama Canal is at an all-time high and since 20’ equipment is typically used for heavy/dense cargo, like canned foods, the steamship line is limited in total 20’ equipment lift per vessel as the heavy weight containers make each vessel sailing hit their maximum payload allowed to transit the Canal.
– Essentially carriers can load more 40’ equipment per vessel with less weight generating more revenue.

The Panama Canal is now completing the current phase of enlarging the locks in depth, width, and length. In essence, ships prior to the enlargement could carry 5,000 TEU’s (Twenty foot Equivalent Units, size of ocean containers used to ship cargo) now will be able to carry 13,000 TEU’s! This will reduce congestion in the Canal, and expedite service.

During the past few months, there has not been enough space to accommodate all the cargo being imported for the holiday season, delaying many shipments from Asia to the USA.


Tuna: Albacore Firming, Skipjack Trending Higher

The entire market has been turbulent these past few months.  We have seen the market for light meat Skipjack take a steady decline in price due to very low demand.  The market hit what appears to be the bottom and has begun moving up.

Albacore raw material has been very short in supply through the Spring, typically the better fishing season.  Prices have risen steadily and raw material is not always available on demand.  For those that buy Albacore by the container load, it is best you plan further ahead.

Ramadan, the Muslim holy month, began June 28th.  Typically, factories in Muslim countries work on a limited schedule during  Ramadan.  This is affecting production of Albacore in Indonesia, a major source.

Typically, the Fall is a hectic time for tuna factories for end of the year shipments so we are anticipating a firm trend in tuna pricing through the end of the year.

Quinoa: Popularity of the Superfood Increases, as Does its Price

As reported last year, the United Nations General Assembly declared 2013 “The Year of the Quinoa”, stating that the extraordinary super grain could have a significant impact on the anti-hunger fight.

Unfortunately that fight is far from over. Quinoa, however, has grown immensely in popularity on restaurant menus and in home-cooked recipes in the Western world. Superfoods have increased in demand, altering eating habits and shaking up the food industry over the past decade. The nutritional benefits of quinoa way surpass those of any other grain we eat: it’s high in protein, antioxidants, fiber, iron, Omega 3’s, etc., plus it gets a tremendous boost from a growing demand for gluten-free foods.

The U.S. import of quinoa increased to over 14 million pounds in 2013, from 1.6 million pounds in 2007 and in the same time period its price more than doubled, from about $3.50/lb to $7.50/lb in retail stores. This year has been challenging since the overall demand way surpassed the volume of supply from the two largest source countries, Peru and Bolivia. On top of that, large batches of quinoa were rejected entry by FDA for illegal pesticide residues. Like several other importers, we were out of stock of certain pack sizes for a while but we expect to be in stock again very soon. We only import quinoa that’s accompanied by detailed lab reports showing that it’s pesticide-free.


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