DOLLAR/EURO: Dollar Plunges Over The Past Year

Tuna Raw Material Price falls

REMA FOODS IMPORT MARKET FLASH October 27, 2009

TRADE/POLITICS - Food facilities required to register with the FDA under the Bioterrorism Act (facilities located anywhere in the world that manufacture, process, package or hold food for consumption in the United States) must now submit a report to the FDA's new Reportable Food Registry within 24 hours if they find a reasonable probability an article of food may cause severe health problems or death to a person or animal. Failure to timely submit the required report may lead to civil and criminal penalties.

The US government is conducting its 2009 Annual GSP Review for Acceptance of Product & Country Practice Petitions. Over the next few months it will be decided which products will gain, and which will lose, GSP duty free preference.

CURRENCY UPDATE - After most investment banks predicted firming for the US dollar, the opposite actually occurred with significant weakening in the dollar’s value over the past month against most major currencies. Per Rabobank, a leading European bank: “The market has clearly taken the view that the failure of the communiqué post the recent G7 meeting in Istanbul to firm up the previous language as regards currency markets proved to give something of a green light to additional USD selling interest.” The result: the dollar is trading lower today than at any point over the past year.

TUNA - Packers bought raw material heavily in the summer months, afraid that fish would be short after the ban on FAD-fishing (fish aggregating devices) and the coming El Nino. Their strong purchases supported the market and pushed prices up to $1500/mton. In October when it became apparent that fishing remained strong, but well covered packers had no new purchasing requirements, the market for raw material fell suddenly by over $500/mton in a matter of weeks, and is now solidly below $1000/mton. Yellowfin so far is firm at $1550 (in Thailand, catch is running 98% skipjack, 2% yellowfin) and albacore remains steady at $2,500/mton. In American Samoa, the Starkist plant is said to be offline due to damage to the local power plant caused by the recent tsunami, while the Chicken of the Sea plant there has been permanently shut due to uncompetitive labor costs. According to the Spanish Fisheries Confederation, Pirates in the Indian Ocean are placing at risk the supply of tuna to the canning industry in Spain.

PINEAPPLE and TROPICAL FRUIT - The Thai winter crop is underway and fruit prices have dropped to a more realistic level of 5.0-5.5 baht/kg, after opening a few weeks ago at 6.0-7.0 baht/kg. It is reported that several large pineapple plantations have been converted to more profitable crops such as sugar cane, rubber, etc. Indonesia is experiencing drier weather due to the El Nino effect, and a leading Indonesian packer claims they have had to irrigate their farms to ensure fruit growth. The Philippines is reporting a short crop due to recent typhoons that have been ravaging the islands. However, overall worldwide demand has dipped with Russia not purchasing much. Additionally, with the anti-dumping issue out of the way in the US, more packers are now able to sell to the US market, increasing the overall competitive environment. Overall, prices are stable on high quality product, but weaker on standard grades. Tropical fruit salad is also stable with all components (red papaya, yellow papaya, pineapple, guava, & banana) reported to be currently available.

MUSHROOMS - China’s Northern provinces are starting their harvest with raw material prices high at 7.0 rmb/kg, compared to 3.0-3.5 rmb/kg last year, and too high for canneries to absorb. The short crop is brought about by farmers’ switching to alternate crops as the past two years have been unprofitable. A current survey by a leading Chinese manufacturer showed the following levels of raw material volume by province: Fujian (responsible for 60% of China’s total production) - down 35% vs last crop; Henan (20%) - down 55%; Sichuan (5%) - down 60%; Guangxi (5%) - down 50%. While there seems to be pressure for prices to move up, the dynamics are more complex this year as several new plants are newly approved to ship to the US market (re anti-dumping regulations), and competition between them is fierce. On the other hand, there seems to be a growing local fresh market demand and Eastern Europe is waking up from its two-year buying hiatus. As a consequence, the “real” opening price will not be known until early December. India’s biggest producer, after substantially reducing their output in 2009 is now gearing up to go on full production in 2010 due to anticipated higher prices. Unlike China where mushrooms grow primarily in caves, India produces in climate controlled rooms and thus has better control of their desired production levels. In the US, the industry has shifted much of its focus from canned production to fresh.

OLIVES – In Spain, the Manzanilla crop, originally estimated at 197,000 mtons is now forecasted at 155,000 mtons, with very small sized fruits. The Queen crop, originally estimated at 32,000 mtons remains stable with a revised forecast of 31,000. Hojiblancas, used primary for ripe olives and oil, is looking better than originally forecasted with the latest forecast at 232,000 mtons, up from 208,000. Domestically, US growers are experiencing their third crop failure in four years; they are aggressively buying raw material overseas. Over the past few months, USFDA has started rejecting containers of stuffed olives entering the country, saying the product lack a process registration with FDA's Low-Acid Canned Food office, even though they’ve been entered into the country this way for decades. Packers are rushing to revise their registrations and in the meantime containers are being rejected. Because the new registrations apply only to newly entered containers, the identical rejected containers have to be exported back to their countries of origin. Note there is no problem at all with any of the olives in question – only the paperwork.

OLIVE OIL - The move of the EU to “purchase” about 80,000 MT of oil from the market and hold it for storage seems to have worked in firming the market. The current exchange rate of 1.50 euro is also pushing up pricing in the US. The new crop season is still expected to be good, yet it’s still too early to predict where price levels will open. The Monell Center, Northwestern University reported that Oleocanthal, a naturally-occurring compound found in extra-virgin olive oil, helps prevent Alzheimer's disease.

MANDARIN ORANGES – Flooding in China a few months ago has left packers expecting a slightly worse crop than last year. Spain is reporting a normal crop, but the weak dollar will prevent exports to the US. The Chinese report that tin plate is expected to increase in the beginning of next year, and the price of sugar has already gone up. Given weak demand, it’s still too early to predict where the “real” price of mandarins will open this year.

ARTICHOKES - Spain will start its winter crop in a few weeks and current expectations are for a normal season. The current exchange rate of the dollar/euro, however, is not helping and pricing in dollars could be high. Peru’s crop is on-going and seems to be unfolding better than originally expected (although several large canneries shut their doors this year). Chile had a short crop and is reportedly oversold. On a side note, Peruvian police seized four tons of liquid cocaine concealed in 8,000 cans of artichokes destined for Spain.

PEELED TOMATOES - The crop is reported to be 10-20% lower in volume than last year with the shortfall due primarily to packers’ being unwilling (or unable) to invest in cans. Italy’s rainy weather this year resulted in more yellow tomatoes; cheap offers from Italy are primarily for these “lower quality” tomatoes. Finally, the weak dollar will have a major impact on raising prices in the USA, the lading world market for #10s.

BABY CORN - Thailand’s most recent crop has ended and some packers report that the floods affected their crops. New crop is not expected until the first quarter of next year.

LEMON JUICE - With Argentinean lemon processing down by 10-15% at the end of last year, and the US crop forecast to be 10% below last year in volume, it appears that lemon juice will be tight again for the third year in a row.

PASTEURIZED CRABMEAT (refrigerated) - In Thailand, landings did not improve as expected and sizing was reported to be 10-13 pieces per kg. In Indonesia, crab landings were negatively impacted by hot weather and volume dropped by 40-50%. All factories ran production at 30-40% of capacity because of a shortage of raw material. Tropical storms and typhoons negatively affected landings in both Vietnam and the Philippine’s. Overall weak demand in the U.S. market continues.

SHRIMP (frozen) - For the first time in five months, National Marine Fisheries Service reported U.S. shrimp imports fell slightly in July reaching 100.5 million pounds just shy of July 2008’s total of 101.1 million pounds. Shrimp imports for the first seven months of 2009 were down only 0.8 percent from the same period last year, to 616.2 million pounds.

SCALLOPS (frozen) - Recent storms that fell just below the hurricane wind level, the end of summer, and kids going back to school have all influenced the market. Close to 75% of the entire scallop boat fleet has finished their 2009 allowable days at sea. Landings have been short and commanded high boat prices ranging from $9.25 for U/10’s and $6.60 or higher for 10/20’s and 20/30’s. With decreasing landings expected over the next four months, boat prices are not expected to come down below these levels and should increase as demand remains strong into the holidays.

TILAPIA (frozen) - As the demand for tilapia continues to grow worldwide, production is expected to reach 3 million mtons worldwide by 2010, compared with 2.6 million mtons in 2007. Asia farms roughly 75% of the world’s tilapia, with China the leading world supplier. China plans to improve technology in eastern coastal cities, including a planned research facility for disease prevention, high-quality feed and ecologically friendly cultivation methods.

SALMON (frozen) - Recent reports out of Chile continue to be bleak as the infectious salmon anemia outbreak takes its toll on the country’s production. According to one executive, the plunge in production could reach as high as 67%, to 120,000 mtons in 2009. The market continues to trade at relatively inflated levels despite slowed demand driven by challenged world economies.

CATFISH (frozen) - Farmers and producers in China report that available harvest size fish now growing for the new season production are at levels below last season. Factories overseas have an October 1st start time, so supply will not improve until mid December or early January 2010. A short market until then coupled with lower domestic production could raise domestic prices and increase imported demand.

CALAMARI (frozen) - September is a slow month for Loligo landings, which pick up in October through December. Overseas the Indian west coast season will begin soon as the east coast season for needle and semi-needle squid comes to a close. Peru is reporting a very quiet season and reports issued by NOAA have warned of an “ongoing weak El Nino” event taking place.

REMA FOODS IMPORT MARKET FLASH August 24, 2009

TRADE/POLITICS
The Food Safety Enhancement Act of 2009 passed the House of Representatives last night by a vote of 283 to 142. Now, the Senate must approve a food safety bill. Once that occurs, a small group from both the House and Senate will "conference" and come up with a compromise bill. The House Bill harmonizes FDA's authority to prohibit or restrict the movement of tainted foods with that of USDA. It also clarifies who exactly does, and does not, have to register with FDA and pay the new annual registration fee.

The first half of the year saw ocean freight rates drop to historically low levels - prices that have proven to be unsustainable. Recent increases in fuel and continued losses by the shipping lines have prompted companies to implement a “cost recovery program” (CRP) and a peak season surcharge (PSS) ranging from about $300-$800/TEU.

El Niño is back. An El Niño is a completely natural event that usually lasts between a year and 18 months. It’s experienced every two to seven years, with varying degrees of vigor. Over the last couple of months the waters of the Pacific have shifted and the first impacts are already being seen. During a 'normal' year, the prevailing winds push the warm surface waters of the Pacific toward Indonesia. This makes the waters there about 8°C warmer and half a meter higher than the waters along the west coast of South America. During the El Niño, winds ease and warmer waters well up along the west coast of South America, around Peru and Ecuador. The change is tiny, just a couple of degrees Celsius, but the effect can be dramatic. Fish that prefer colder waters swim thousands of miles further north or south and/or head to deeper water, making them harder to catch. Agriculturally, Southeast Asia sees drier weather while the rains over the coast of Peru or Bolivia become heavier. Over the last month or so there has been a significant decrease in the rainfall over Indonesia. The effects are expected to become even more widespread in the coming period between December and February.

The Customs-Trade Partnership Against Terrorism (C-TPAT) program continues to evolve with respect to providing benefits to its partners in return for proof of strong supply chains (Rema Foods achieved C-TPAT approval several years ago). The ‘Importer Security Filing (ISF) and Additional Carrier Requirements’ known simply as “10+2” significantly increases the scope and accuracy of information gathered on imports US CUSTOMS has committed to a 1-year delayed enforcement period in order to provide the trade time to make the necessary changes to their business processes. The Guidelines for the Assessment and Cancellation of Claims for Liquidated Damages for Failure to Comply with the Vessel Stow Plan, Container Status Message, and Importer Security Filing Requirements have been finalized and will be published in the Customs Bulletin shortly. Certain C-TPAT partners will be eligible for additional mitigation - up to 50% of the normal mitigation amount, a benefit available only to those partners who have excelled in their commitment to supply chain security and in their partnership with US CUSTOMS.

CURRENCY UPDATE
After falling considerably several months ago, the US dollar has been stable to weak over the past two months.

TUNA
Skipjack remains firm at about $1450-1500/mton. Purse seine operators fishing in international waters have braced themselves for a major cut in tuna production effective this month as a result of a ban on FAD-fishing (fish aggregating devices) imposed by the Western and Central Pacific Fisheries Conference to replenish tuna stocks. The ban is in affect August 1 through September 30. Longer term, packers are worried about possible shorter catches resulting from the impending El Niño. The Yellowfin/skipjack ratio has been stable. With the tongol season now over in Thailand, market could firm. Albacore availability is improving, while demand remains strong. For the overall US tuna market, demand remains healthy as dollar sales in the $1 billion canned tuna category went up 6.7% for the 52 weeks ended July 12, according to Information Resources, Inc.

PINEAPPLE and TROPICAL FRUIT SALAD
Thailand, the major producer of canned pineapple, had a short summer crop, ending about four weeks earlier than usual. Raw material prices reached 7.00 baht/kg and fruit was reportedly smaller than usual. Most factories will stop producing by the end of the month, and winter crop relief will not arrive until December. Indonesia is experiencing the El Niño effect; due to the lack of rain, farmers have had to resort to expensive irrigation and the crop is expected to be reduced by about 10%. Tropical fruit is quite firm as last year's red papaya crop was very short and new crop does not arrive until the end of the year.

MUSHROOMS
The first half of the year saw mushroom pricing tumble drastically. Recent weeks however are showing firmness. China is still about four months away from its new crop and it is reported that currently available raw material is estimated at about half the usual levels. It is also reported that new crop production in the northern growing provinces will be around 50% below last year (thus only 25% that of 2007). Due to the anticipated shortage, brine mushroom prices have firmed more than 20% in the past month and are still rising. In India, the other major producing country, the situation is much the same. The only major producer, currently undergoing a financial reorganization, has decided to decrease production until prices improve.

OLIVES
Preliminary expectations point to a good upcoming crop this season, with good volume but possibly smaller olive sizing. More details should be available next month.

OLIVE OIL
After the historical low prices of olive oil seen in the earlier months of this year, prices are now on the upswing and projections are for a continuing uptrend until the end of the year. Prices have been under upward pressure because at their lowest levels, the selling prices were below the cost of production. In response, the EU is temporarily buying some inventory off the market to prevent further declines. The exchange rate (weak dollar) is also contributing to the price firmness in the US. However, don’t expect any significant long term price increases as the upcoming crop looks very good (ships early 2010). In the US, there are reports of some soy oil labeled as EVOO making it into distribution on the west coast. Buyer beware.

MANDARIN ORANGES
A major typhoon hit Zhejiang and Fujian, two of China’s leading mandarin orange production regions recently, leading some packers to caution that tree damage may dampen prospects for what was expected to be a good crop. The USDA’s forecast in July for China 2008/09 crop was 12.3 million mtons, up from 11 million last season. A USDA spokesman reported that their next report will reflect any damage from the typhoon.

ARTICHOKES
Simultaneous poor crops abound worldwide. Spain's crop ended early; it is reported that the final crop was about 30% less than last year. Peru, with two major canneries stopping canned artichoke production this season, has only one major and a few minor factories left. Farmers have decided to plant less acreage this year due to losses suffered the previous year. Chile seemed to be the new frontier with a newly granted duty-free status in the US, but their crop is also reported to be short.

PEACHES
Greek peach production is underway and though packing was deliberately started late, it is reported that supply will be sufficient. Some Greek factories have carry over inventories and demand is not as strong. Most packers in Greece have reduced the volume they are packing by about 30%. China’s crop is also on-going - earlier reports of heavy rains affecting the fruit seem to be unfounded. China has been steadily increasing their yearly output in the last 5 years. In 2008, their production was almost double that of 2004 levels (372,500 mtons vs 200,500 mtons). This season is reported to be about the same as last year, however, with weak demand there should be sufficient supply for canning. Soft demand is being reflected in the 20% lower opening price of this year’s crop.

SUNDRIED TOMATOES
With last season’s very low sales, this year’s season is off to a rocky start. Most of the Turkish packers have carry-over inventory and as a result are unwilling to dry big quantities for the upcoming season. Farmers are likewise hesitant to commit resources for drying product due to losses suffered last year. As a result, the total quantities available for sundried tomatoes will be about 20-30% lower than last year. While products may be available now, there may be a shortage of good quality products toward the end of the season. Prices are about 25% lower than last year’s opening prices.

MARASCHINO CHERRIES
This year’s bumper crop of cherries in the US is poised to surge by 32% to 284 million lbs in 2009, the largest in seven years according to the USDA’s forecast. The crop in Michigan is expected to soar by a third. Washington State is expecting their harvest to exceed 20 million pounds. By contrast, the state’s prior record of 14.9 million pounds was set in 2007. Eighteen pound cartons of size 10 Washington Bings were priced at $18 to $26 last week, according to the US Department of Agriculture, compared to $45 per carton at this time last year.

PASTEURIZED CRABMEAT (refrigerated)
Imports from Indonesia, Vietnam, Philippines, Thailand and India continue to be slow in the first half of 2009 as importers were still heavy on inventories they were carrying from last year at higher costs. Compared to 2008, through April, imports from those five countries dropped to 1.2 million pounds from 2.7 million pounds, according to the National Marine Fisheries Service. Supply of jumbo lump has been hindered by below average sizes. Typical yield from a blue swimming crab for jumbo lump is roughly between 18 to 20 percent of the pick, but for the last 90 days the yield has dropped to 8 to 10 percent. Jumbo lump supplies have diminished and prices are rising. Clawmeat, the lowest cost meat, has generally been the shortest in the market.

SHRIMP (frozen)
According to the National Marine Fisheries Service, US shrimp imports after falling in both January and February by 13.2 percent and 13.8 percent respectively, rose for a second consecutive month in April. March shrimp imports rose 8.7 percent and April jumped 6.3 percent above prior year sales for the same periods. Overall, shrimp imports through April were down 4.2 percent from the first four months of last year, to 336.3 million pounds. China and Vietnam were the main culprits as sales to the US dropped 32.9 percent and 20.9 percent, respectively. Asian Black Tiger Shrimp at the 21-25 count and smaller HLSO are steady to firm with limited supplies, particularly on 26-30 and 31-40 count which are offered at a premium cost. Vannamei Shrimp supply is steady for a fair demand and supplies of 41-50 count and smaller shrimp are fairly tight.

SALMON (frozen)
Farm raised Atlantic salmon prices are gradually on the rise as supply continues to tighten. Less fish in general is available from Chile. Look for the market to continue to tighten through the balance of the year and into 2010.

TILAPIA (frozen)
US tilapia imports through April rose slightly from 123 million pounds in 2008 to 125 million pounds this year, according to the National Marine Fisheries Service. US imports of frozen tilapia fillets from China totaled about 69 million pounds through April, up 10 million pounds from the same four-month period last year, while imports of frozen whole tilapia from China reached about 27 million pounds through April, up about 6 million pounds from last year. While the drop in China’s output caused prices of frozen tilapia fillets to increase steadily last year, prices are expected to hold steady in the coming months.

CATFISH (frozen)
Prices holding steady at the moment with no immediate price changes expected in the short term, but beware of possible incremental price increases that could materialize late this year or early 2010. Indications from farmers and producers are supporting such assumptions, due to size demands and available fish now growing for new season production.

CALAMARI (frozen)
Current squid landings are heavy in the northeast and the sizing and overall quality is excellent. Lower water temperatures seem to have brought the landings on a little later in the summer this year as heavy landings began on the 4th of July. Overseas, the Indian season is active right now but it appears to be lighter than last year. In Peru, the El Niño is expected to have a significant effect on catch.

SCALLOPS (frozen)
Early and unexpected closures on Georges Banks in June cost approximately 100 trips at 18,000 lbs lost due to the early closure. Close to 2 million pounds won’t hit the market, causing shortages for businesses using U/10 size as 80% of the catch in this area was U/10’s. There are a limited number of open area fishing days remaining in the 2009 season and even with the slow economy boat prices should not fall again. Excessive rain during the course of June has slowed the summer trade in the New Bedford area.

Dollar vs Euro (1 year)

REMA FOODS IMPORT MARKET FLASH June 22, 2009

*** If attending the New York FANCY FOOD SHOW (June 28-30), please stop by our booth 1636. We’re showing under the name of our specialty foods company SOURCE ATLANTIQUE.

TRADE/POLITICS
The House Energy and Commerce Committee approved The Food Safety Enhancement Act of 2009. Sponsored by Rep. John Dingell and Committee Chair Henry Waxman, the bill would give FDA more funding and several new authorities. It requires facilities to register annually with FDA, pay a $500 annual registration fee, and pay for FDA costs associated with reinspections and food recalls. FDA will be able to issue mandatory recalls for tainted food, and penalties have been increased to a maximum of $100,000.00 for individuals, and $500,000.00 for facilities. Importers meeting voluntary security guidelines will receive expedited processing by FDA. The bill requires high-risk facilities to be inspected at least once every six to 18 months, low-risk facilities to be inspected at least once every 18 months to three years and warehouses that store food to be inspected at least once every three to four years. Unique ID Numbers will be created for all food, drug, medical device facilities and importers. The bill's next step will be a vote by the full House of Representatives. If the bill passes in the House, it will then wait for the Senate to take action on its food safety bill. The bill introduced by Sen. Durbin continues to be the lead bill in the Senate. Once bills are passed in both the House and Senate, members from both bodies will work toward creating a compromise bill. There's no indication of when the Senate will act on the Durbin bill, so there's no way to give a timetable on when any legislation will pass.

A vast majority of the scientists polled at the ninth annual International Conference on Mercury as a Global Pollutant (ICMGP) said methyl mercury contamination in seafood is not a serious health threat to consumers, stating normal consumption of seafood does not pose a health risk to adults, children or developing fetuses and that the health benefits associated with omega-3 fatty acids and other nutrients in fish outweigh the potential risks of mercury exposure. They also concurred that carefully nuanced public health advisories about mercury in fish are more effective than point-of-purchase warning signs. David Martosko, director of research for the Washington, D.C. based Center for Consumer Freedom (CCF) noted "The good news about eating fish is finally drowning out the bad news. And we're hearing it from the real experts."

The Office of the U.S. Trade Representative has announced that the U.S. and the E.U. have reached a 3-4 year provisional agreement in the beef hormone dispute. Under the agreement, the U.S. would maintain existing 100% duty sanctions on the currently affected items, without revision, for a 3-year period. The new sanctions (on additional items such as Italian water, Greek peaches) that were scheduled to go into effect on May 9, 2009 have been cancelled. The products that were removed from the retaliation list on March 23 (such as French mustard) will not be affected and will remain without 100% duty. Under the agreement, both sides have decided that they will eliminate all sanctions during the 4th year.

A Customs employee recently discovered a typo in a 2007 duty reduction bill for capers, resulting in the re-imposition of duties on certain caper imports. It's expected that a corrective bill will be passed within the next few months. The retroactive aspect of the revised bill isn't expected to create any problems because it's simply bringing things in line with the measure's original intention. Once the corrected legislation is passed, importers will have to apply for refunds for any duties paid.

CURRENCY UPDATE
The US dollar has fallen 10% in just the past few months. Volatility remains high as the dollar hovers around 1.40 vs the euro. A graph of the dollar/euro tracked over the past year can be found at http://foodimportgroup.blogspot.com (inverted to show the strength of the dollar against the euro). Keep in mind that a change in currency will have a 100% direct relationship to the selling price in dollars; i.e. a $40 euro based item will go up $4 when the dollar weakens by 10%. According to one large international investment bank, investors have deserted the dollar “at least in part on the basis of a resumption of risk appetite as we have seen stocks rebound from the lows. The Dollar decline has also come in conjunction with a rebound in commodity prices, in part a function of an improving investor outlook, or also as a consequence of rising speculative interest and as an offset the decline in Dollar revenue flows. Moreover we have seen ongoing concerns as regards the long term reserve status of the USD, while the surprise decision by the Fed to move to a policy of quantitative easing in March also provided a rationale for a significant deterioration in US Dollar sentiment.”

TUNA
Skipjack is firm at $1350-1400/mton with packers expecting further tightening because of the upcoming fishing bans and the rising cost of fuel (the single largest cost component in fishing, crude oil has gone from $41/barrel in January to $69 now). Fishermen are speculating that between $1500 and $1800/mton will be reached by the fall. Due to the uncertainty in raw material costs and the difficult financial environment, packers are generally quoting only for prompt shipment. Yellowfin has been tracking skipjack and is currently trading around $1720/mton. Albacore, at $2850/mton, continues to be short. The current economic climate has not led to any decrease in albacore demand (demand has actually increased in many parts of the country), while raw material was very tight over the past few months. Over the past month, vessels operating in the Western Pacific Ocean reported poor catching of about 1-1.5 mtons/day. Catching in the Indian Ocean near Mauritius was also poor at about 1mton/day size average 12-13 kg which means yield is low. In the Atlantic Ocean, only about 10-15 boats are operating. With Japanese Summer Albacore, the season has started late this year and so far the daily catching is only about 250 mtons/day. There's 2nd season of Japanese summer albacore in July/Aug caught by purseine net boats in the North Pacific Ocean but size is expected to be small with high oil content; most only suitable for retail packs.

PINEAPPLE and TROPICAL FRUIT SALAD
The Thai summer crop ended about one month earlier than forecasted, pushing raw material prices up to 6.0 baht/kg. The recently concluded season peaked later than usual and the volume during the peak was lower than usual. Total first quarter 2009 Thai worldwide exports of pineapple have dropped about 30% compared to last year; however, their exports to the US have remained relatively stable, with other countries like Russia showing most of the decline. The industry is carefully watching weather patterns as a possible El Nino weather event could cut global fruit supply from 17.8 to 15.0 million mtons. Meanwhile in China, the crop has started - raw material deliveries are still low and canning factories are competing with the strong fresh market requirement.

MUSHROOMS
China’s crop season has ended and is reported to be about 30-40% short, with China’s first quarter exports running 53% lower than last year. Nevertheless, competition between the five anti-dumping approved packers for the USA is fierce and pricing has fallen as a result. India is supplying steadily; however both countries are being severely hurt by the current low prices and expectations are that the bottom has been reached. Separately, straw mushrooms have been quite short of late, mainly due to the crop failure in Vietnam and China. Relief is not expected until the end of the year.

OLIVE OIL
Market has been quite stable (fluctuations are coming mainly from the euro/dollar exchange rate); however, as raw material prices have reached levels comparable to prices of 10 years ago, there is some pressure for prices to go up. The EU, in an effort to artificially firm the market, has proposed to temporarily buy some 110,000 tons of oil from farmers. This provides cash to the farmers without them having to resort to selling at low prices. The farmers are able to withdraw from these stocks at any time for a small fee. It still remains to be seen if this endeavor will be effective. So far, the flower season is reported to be good.

ARTICHOKES
Significant consolidation is occurring in Spain as COFRUSA, a private Spanish fruit and vegetable packer, has acquired Halcon-Conservas Fernandez. The new company COFRUSA-HALCON will be the largest packer in Spain with 3 plants there and 1 in Peru. Spain has managed to gain back some of the quantities it had lost to Peru and Chile in the past years. Peru and Chile’s previous crops were a bit short, providing an opening for Spanish artichokes, especially when the dollar was firm last year. The recent fall in the dollar is making things more difficult again for the Spaniards.

TOMATOES
The global tomato crop is reported to be slightly lower than earlier forecasts. Revised forecast is now at 39.2-39.9 million tons (down from 41.2 million tons). The lower estimate is mainly due to California’s adjusted forecast (from an original 12.1 million tons to about 11.3). Italy’s forecast remains the same at 5.0 million tones. China is projecting a bumper crop of 7.7 million tons, going almost entirely towards paste production. The chapter 11 filing of U.S. based S.K. Foods (resulting from large scale bribery of its buyers) and the early total decoupling (subsidy change) in Italy have left many processors shaken.

PEACHES
Packers in Spain and Greece are expecting a good crop this season; however, low demand and high carry-over inventories are worrisome, and packers are planning to cut production as a result. China has just started its season and this year’s output is estimated to be about 2% higher than last year. As China becomes more experienced in managing their farms, yields are improving and output is increasing, despite reduced acreage. Opening prices are expected to be slightly lower than last year.

BALSAMIC VINEGAR
On June 10th the European Commission has approved PGI (Protected Geographical Indication) regulation for ACETO BALSAMICO DI MODENA. This specifies that only balsamic vinegar produced from the Modena region may be legally called Balsamic Vinegar of Modena.

PASTEURIZED CRABMEAT (refrigerated)
After years of steady prices, the blue-swimming crab industry experienced one of its most volatile seasons ever in 2008. Prices rose steadily through the peak-crab consuming summer months but then dropped drastically as reduced demand and the recession took hold in the third and fourth quarters. Foodservice companies report that a large percentage of their restaurant accounts are now buying more economical grades such as claw, backfin and special, and blending these grades to reduce plate costs. Early demand in 2009 is still less than in 2008.

SHRIMP (frozen)
Overall Black tiger import figures for January were mixed. Imports from India were up 19.1%, while imports from Vietnam and Indonesia were down 37.5% and 1.1%, respectively. Tightening tiger supplies are driving up prices and demand remains high. Availability of 21/25 count and smaller shrimp are reported to be thinly supplied. Raw shrimp arrivals in India are very low particularly on larger sizes like 8/12 to 26/30. Most of the farmers now prefer to harvest smaller sizes especially 31/40 and lower as they find the prices attractive and do not want to wait for the shrimp to grow larger. Other factors like the recent strengthening of the rupee has also increased the cost significantly. Vannamei shrimp supply in Thailand has been picking up over the past week and demand is steady. Increase in supply has resulted in a drop in price mainly on mid sizes (31/40 HLSO equivalent). Indonesia's shrimp production and exports will likely fall this year with virus attacking the country's largest shrimp production centers. Virus has attacked 62,100 hectares of shrimp farms in Lampung, which contributes 40% to the country's shrimp production.

SALMON (frozen)
The first quarter of 2009 was marked by declining production in Chile. During that period, the ISA disease forced the world’s largest farmed salmon producer, Marine Harvest, to halve its number of active sites in Chile, which cut its output there by over 50%. Norwegian salmon exports reached a record $721.7 million in the first quarter of 2009, up 18.7% from the same period in 2008. Norway will grant 65 new salmon farming licenses this year, but even the increased production from these farms won’t be able to save the global industry from a reduced supply and prices have begun to rise worldwide.

TILAPIA (frozen)
Chinese tilapia production is expected to return to pre-2008 levels this year according to multiple sources. Global tilapia production fell 13% in 2008, to 2.06 million metric tons caused primarily by the severe winter weather in southern China. Although production levels will be on the rise, the sourcing of product may not be as easy as it was in years past due to increased competition. Mexico and Russia, which account for 30 percent of total Chinese tilapia exports, are purchasing more fish and other European countries are also beginning to purchase more tilapia. Additionally, more tilapia is staying in China, where the economy has grown tenfold in the past 30 years.

CATFISH (frozen)
Production of Channel Catfish in China is done for the year and the harvest will resume in late August. Supplies in cold storage are meeting market demand. Prices are steady.

CALAMARI
Domestic landings have been close to zero in the month of May. Overseas, China began its fishing closure at the beginning of May; India is between seasons but should begin to see product soon while Thailand and Peru have been producing limited quantities. Here in the U.S. the inshore trap and trawl fishery has begun as the sea temperatures recently reached 52F. This fishery produces an intense flurry of activity focused mostly on the whole "dirty" squid. This is a premium large sized squid that is frozen whole and sold here in the U.S. and overseas. In these catches we also see some smaller 4"- 6" which is processed into cleaned squid.

SCALLOPS (frozen)
Feedback from vessels fishing from Long Island, NY to Virginia are reporting large amounts of small scallops and seed (small, dime size). Nobody has seen this amount of small scallops in years. With only 37 open area days this year, many boats will be done fishing open areas before Labor Day. This means the small scallop population will grow undisturbed all fall, winter and early spring. With the boats catching 2500 to 2700 lbs per day in the mid Atlantic areas, very few are working on the Georges Bank open areas. The landings continue to be 70% 10/20's, 15% U/10's and 15% 20/30's from both closed and open areas. This trend is expected to continue for the next couple of months. After the 4th of July holiday, a decline in landings will occur and prices should begin to increase.

REMA FOODS IMPORT MARKET FLASH Apr 29, 2009

TRADE/POLITICS
The US Trade Representative has announced a last-minute, two week delay in the imposition of punitive 100% duties on the amended list of food products originating in the EU. This delay is based on a perception of progress in the most recent round of negotiations in these long-standing discussions related to EU trade restrictions on US beef containing hormones. Both sides seek a breakthrough in this politically-sensitive controversy that dates back to 1988. The increased-duty action was originally scheduled to go into effect on March 23, but delayed until April 23. This most recent two week delay pushes the proposed action to May 9. The food items subject to the 100% rate include Roquefort cheese, truffles, chocolate, jam, canned peaches, fruit juices and mineral waters. The detailed entry in the Federal Register can be found at http://edocket.access.gpo.gov/2009/E9-5933.htm

CURRENCY UPDATE
Over the past few weeks, the dollar has lost some of its recent gains achieved against the euro. It dipped as low as 1.35 in April, and has lately hovered in the 1.30 range - well ahead of the low of 1.60 in mid-2008 but weaker than the high of 1.25 hit in March (a lower value indicates a stronger dollar). To quote the leading European banks in their comments for the euro: “While it could be argued that the US has proved to be the epicenter of the economic crisis, the fact that they were first into the contraction but also have undertaken significant fiscal and monetary action to alleviate the ravages of the downturn should suggest that the US will emerge far ahead of the euro area where the response has been perceived to be far slower and less concentrated. The recognition of such a scenario should prove relatively USD supportive, at least until the market is far happier to discount a more durable global recovery.”

TUNA
Single duty was once again a non-event as US Customs announced that once again the tuna quota (of 18,457,467 kilograms for 2009) was oversubscribed at the opening moment on January 2, 2009, and filled in less than one minute. No full containers will thus be entered at "the single duty" rate, but those entered in the first minute (at 12:00 noon, but before the clock hit 12:01 PM) will be charged a blended rate. All entries made at 12:01 PM and later will be charged double duty. Once again, the duty savings should be less than the bonded warehouse charges incurred in holding goods to make entry at exactly 12:00 noon. Raw material overseas continues its roller coaster ride of the past few months. The last report highlighted movement from $2,000 in 2008 to $900 in 2009, then back up to $1,300. Since reaching $1,300, the market fell to $1,100, then recently dipped down to $1,000 and even slightly lower. Packers however are afraid to commit at these low levels, for fear of not being able to cover fish if fishermen withdraw as they did last month. Yellowfin and tongol are staying relatively firm even as skipjack gyrates, and the spread on these light species versus skipjack has increased. Albacore pricing has actually increased lately, counterintuitive to the economic climate, but reflecting poor albacore catching. Several weeks ago, a new non-profit organization, the International Seafood Sustainability Foundation, was recently launched with the goal of undertaking science based initiatives to support the long term conservation and sustainable use of tuna stocks.

PINEAPPLE and TROPICAL FRUIT SALAD
Two significant factors have lately been affecting the pineapple market, each pulling pricing in opposite directions: low demand coupled with a short crop. The lower demand is coming primarily from the Russian market, where the buoyant new demand that pushed up pricing in 2008 has dried up, resulting in pineapple export prices falling in early 2009. Conversely, the new upcoming crop is quite poor, and the rising cost of raw material is tugging these same prices upward. The dry spell affecting parts of Thailand is affecting pineapple. Recently, raw material reached 6.00-6.50 baht per kg and is expected to reach 7.00 baht/kg soon. Pineapple juice concentrate pricing has already begun to firm. The crop size is predicted to be about 10-15 % less than last year and is expected to start about 2-3 weeks later than usual (late April/early May) resulting in a short season. Recent political unrest in Bangkok has also led to some work disruption in several canneries last week.

MUSHROOMS
Market is still soft and bargains are available, especially in lower grades. China is reporting a short crop (about 30% shorter than last year), however, it is also reported that the major factories have considerable inventories, as they fight with India to sell into a depressed worldwide market.

ARTICHOKES
The Spanish artichoke crop is projected to be less abundant than last year due to reduced acreage, lower yield and unfavorable weather conditions. The Spanish crop was hit with frost late last year and recently, continued rains hampered harvesting efforts. Market uncertainties have also prompted farmers to reduce plantings. In Peru, predictions are that the industry will produce about 70% of its 2008 volume, partially because one of the largest producers shuttered its artichoke plant for lack of profitability. The remaining factories have decided to play it conservative and not increase acreage to make up for their missing competitor. In Chile, the crop is expected to be about the same as last year but it is too early to project the real outcome as its season will not commence until June.

TOMATOES
The crop outlook in China appears good, with raw material costs expected to fall about 15% compared to 2008. Virtually all of China’s production goes to paste production. In the US, the outlook also looks good, and local demand is strong with 13.9 million short tons of processing tons contracted in the US this season, 8% more than 1999’s record and 14% more than last year. Interestingly, the US exported large quantities of paste last year, with total US exports rising from 129,431 mtons in 2007 to 336,522 mtons in 2008. Italy has still not announced hard figures but the firmer dollar already has pricing down from last season.

PEACHES
The impending possibility of a 100% duty on European peaches has some Greek packers worried. They reportedly have large inventories and might be cut off from the US market with the new crop season just 3 to 4 months away. If this unfolds, prices in Europe could fall leaving China less competitive in Europe, and allowing them more product to sell in the US. Much rests on the US government’s negotiation which, based on the continual deadline extension, could likely result in no additional duty being imposed after all.

ASPARAGUS
Prices have dropped lately due to low demand and carry-over inventories. The Chinese crop situation is normal and weather is favorable.

LEMON JUICE
Argentina is attempting to keep prices high, despite the reported good crop situation and reduced consumption. It is projected that they will process about 950,000 mtons this year (up from 650,000 mtons in 2008). Last year, prices reached record highs due to shortage of raw material. This has prompted some to discontinue use or to substitute with other juices. Italian and Spanish producers are likewise holding prices similar to last year’s level.

SAFFRON
The saffron crop is reported to be about 80-85% short. The price of “real” saffron has gone up by more than 100%. With pricing climbing so far, so quickly, the profit potential is great for those trading in adulterated product (saffron mixed with other vegetable elements) but the typical saffron buyer will not find any value in such poor quality.

PASTEURIZED CRABMEAT (refrigerated)
Poor weather conditions in Thailand, Indonesia, Vietnam and the Philippines have caused poor landings and smaller crab sizes. Continued weak demand in the U.S. market has kept pricing significantly below those needed overseas to replace the product.

SHRIMP (frozen)
Vannamei white shrimp demand is spotty but tight shrimp supply is causing prices to climb. Supply will continue to be tight for the next few months with supply not anticipated to improve until June. Black Tiger raw material prices overseas have shot up considerably over January prices due to short supply as the season comes to an end. Market prices in the US are being held in check only by weak demand.

SALMON (frozen)
The spread of ISA disease continues to worsen in Chile and supplies of both fresh and frozen Chilean fish are short. January inventories were down 61% from the same point last year. Farmed Atlantic salmon reach a mature weight of 4.5 kg after 18-20 months, meaning the early harvesting of 2008 inventories and the small 2009 seeding volumes will cause a collapse in production volumes that will last until mid-2010 at the earliest. Industry experts predict a production drop in 2009 of 50% from 2007 levels, to approximately 220,000 mtons, followed by an even more severe drop to 100,000 mtons in 2010. Pricing is understandably firm.

TILAPIA (frozen)
Chinese farmers harvesting fish early in fear of a reoccurrence of last years freeze has created an increase in smaller fillets in the market and a shortage of larger fillets. The closing of Chinese processing factories in observance of the Chinese New Year holiday also contributed to the shorter supply. The market remains firm for higher quality product and supply of all sizes should improve as the year progresses. Demand for tilapia continues to grow and the American Tilapia Association reports that production is expected to reach 3 million metric tons worldwide by 2010, compared to 2.6 million metric tons in 2007.

CATFISH (frozen)
Production of Channel Catfish in China is nearly done for the year and the harvest will resume in late August. Supplies in cold storage are ample to meet market demand. Channel catfish imported into the U.S. totaled over 23 million pounds in 2008 which represented an increase of 32% over 2007. Prices are steady with good availability and no interruptions expected in supply.

CALAMARI
Domestic catching remains steady and although the sizing has been small, larger sizes are anticipated. Indications of the size of traditional inshore spring run will be more evident come the middle of April. Overseas, the Peruvian season remains quiet, with relatively low production. Production in India will begin in late spring/early summer while Chinese production remains steady.

SCALLOPS (frozen)
There has been much fishing activity since March 1st when the 2009 fishing year started. Over 66% of the fleet has made at least 3 closed area trips out of the 5 allowed this year. Many boats only have 2 closed area trips remaining and 35 open area fishing days. This strong fishing effort will continue with 90% of the fleet having done 4 closed area trips and one third of the 35 open days done by June 15th. On June 15, most boats will converge on closed area # 2 to make the 1 trip allowed. After this 1 trip in closed area 2, the boats will finish their open area days. By early to mid-August, 75% of the fleet will be finished with the closed area and open days for 2009. Landings to date have been mostly 20% U/10's and U/12's and 80% 10/20 count. These sizes have been caught in closed areas. Once the closed area trips are finished, we will see less big ones landed and the majority size will be 10/20's and 20/30's caught from open area days. Prices to the boats for their catch are basically .50 less than last year at this time. The economy has had some influence, but many buyers have not stepped in yet to make their frozen purchases for the year. Without this segment of large volume buyers stepping into the market, there have been days where there are 100,000 to 150,000 lbs of scallops on the auction and the trips have struggled to be sold. On these days the prices have been lower. On other days with fewer landings, the prices have been higher. U/10's & U/12’s have been $7.85 to $8.50 and 10/20's & 20/30’s have been $6.15 to $6.50. Prices will likely not get lower. When the buying increases for all during the late spring and then summer, and the large volume guys step in, prices will rise on the remaining/diminishing volume available.

REMA FOODS IMPORT MARKET FLASH March 9, 2009

TRADE/POLITICS
Lower fuel costs and declining overall demand have significantly lowered ocean freight and trucking rates.

The new Importer Security Filings are now underway with electronic data collection in process from importers to US Customs for shipments before they depart their country of origin. After testing for the past month, US Customs is now adding additional information requirements. US Customs will soon begin providing importers with "performance report cards."

On February 10, 2009, Representatives Calvert (R) and Jackson (D) introduced H.R. 947, "Our Nation's Trade Infrastructure, Mobility, and Efficiency Act" (ON TIME Act). According to a press release, etc., if enacted, the ON TIME Act would: (1) impose a fee of .075% (capped at $500) on the value of articles imported into or exported from the U.S. in commerce; (2) target funding to specific transportation improvement projects in areas around the more than 300 points of entry across the U.S., including ports, airports and border crossings; (3) target transportation choke points and provide funds to relieve bottlenecks and allow for more efficient ways to move goods; and (4) alleviate traffic congestion and air quality issues specifically created by the increased trade moving through the busiest U.S. trade corridors.

The Food and Drug Administration has issued a press release announcing that the Departments of Health and Human Services, Agriculture, Commerce, Homeland Security, and Transportation, and the Consumer Product Safety Commission, the Environmental Protection Agency, and the Office of the U.S. Trade Representative have issued a draft product safety guidance for industry titled “Good Importer Practices.” Comments on this draft guidance are due by April 12, 2009. (Draft guidance dated 01/09 is available at http://www.fda.gov/oc/guidance/goodimportpractice.html.)

100% punitive duties on many imported European items, the result of the World Trade Organization’s ruling against the European Union’s ban of hormone treated beef, will go into effect on March 23. Items affected will include European peaches, pears, various fruit juices, certain French chestnuts, Italian mineral water, lingonberry & raspberry jams, and chocolate (not in bulk form), among other items.

In a move that will slightly reduce duties on some imported shrimp, the Dept of Commerce issued a determination regarding the offsetting of dumped sales with non-dumped sales when making average-to-average comparisons of export price and normal value in the antidumping duty investigation of frozen warmwater shrimp challenged by Thailand before the World Trade Organization (WTO). For most Thai exporters, the duty was reduced from 5.95% to 5.34%.

CURRENCY UPDATE
The front page article of today’s New York Times reads “A Rising Dollar Lifts the U.S. but Adds to the Crisis Abroad.” Amidst on-going widespread economic turmoil, the dollar has been holding its own against most major currencies. It is currently trading in a range of 1.26-1.28 against the euro (at its lowest, the dollar was at about 1.60 vs. the euro). The US dollar is currently 1.29 vs. the Canadian dollar (at its lowest, it was at .98). Predictions are mixed with some investment banks suggesting strengthening, while others predict weakening. In any case, most banks are not predicting any major moves – but in this environment, no one can really predict what will happen even short term in these financial markets.

TUNA
It’s been an absolutely crazy past few months in the tuna industry. After skipjack raw material hit a high of $2,000 in 2008, the credit crisis at the end of the year cut the price of fuel, weakened firms and set off a panic that caused the price of skipjack to reach momentarily to as low $900, before heading back up to $1,100, then $1,200, then $1,300 within a period of weeks. Some fishing companies are predicting $1,450 or higher is around the corner, but supply and demand will set the final price. Once the panic and “bubble mentality” subside, the fish catch and demand will once again dominate, and final pricing overseas will likely not go much higher than it is today. Current catching by Japanese boats is running at 33 tons per boat per day in Western Pacific, moderate catching is reported by their Taiwanese and Korean counterparts at 20 tons/boat daily and overall fish size is small. French and Spanish boats performed at levels of 18 to 20 tons per boat per day. The whole Maldives continued to do poorly, checking in at 50 tons each day. Skipjack-yellowfin ratios: 94:6 in Western Pacific; 80:20 in Indian Ocean. Tongol is averaging 47.50 Thai baht per kilo. Reported albacore pricing in Bangkok is $2,750, up from $2,600 last month and $2,450 before that.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
2008 Thai pineapple export tonnage finished the year up 9 % vs 2007. The US, Thailand’s biggest export market, accounted for approximately 23% of its total exports, and posted an all time high of 144,783 mtons. By comparison, the second place importer, Germany, took only 56,175 mtons. Indonesia tonnage rose by 20%, while China and the Philippines exported close to their 2007 levels. There is much uncertainty about the upcoming 2009 crop. The cooler temperature in January resulted in a lower fruit supply and higher raw material prices. In Thailand, prices have now climbed back to about 5.00-5.80 thai baht per kg, from a low of about 3.00-3.50 right before Christmas. If this weather trend continues, it is predicted the crop size may possibly be reduced by about 30%. The on-going La Niña phenomenon (a La Niña event occurs when cooler than normal sea surface temperatures form along the equator in the Pacific Ocean, specifically in the eastern to central Pacific) is also expected to affect Indonesia and the Philippines. The Thai Food Processors’ Association (TFPA) released an official statement regarding the expected short supplies of pineapple. While pricing of canned product weakened for a short period at the onset of the credit crisis, price levels have since been climbing. Pineapple juice concentrate pricing is very firm at $1,450/mton FOB Thailand and packers are starting to divert raw material from the canned lines towards juice production. In the Philippines, Dole officially cut its working days from 6 days a week to 5.

MUSHROOMS
Most Chinese packers are reported to have begun the 2009 crop season with some carry-over quantities. This situation, together with lower demand, is keeping prices down. In China, while raw material prices are trending upwards because the prevailing hot weather is predicted to shorten the crop season, the market price in the U.S. is still not reflecting any firmness. India is reporting normal production. Overseas packers worldwide are reporting that Russian buyers are defaulting on contracts to buy mushrooms, even forfeiting deposits. Overall credit crisis issues seem to be paying a bigger role in the mushroom market at this moment than even the raw material itself.

ARTICHOKES
Canned artichokes are predicted to be sold at higher levels than last season. In Peru, one major manufacturer has decided to discontinue production of artichokes this coming season due to low profitability of that product. In Spain, the winter crop was affected by the frost that blanketed the growing area in December; raw material prices are higher and tinplate cost rose by about 30%. In recent years, Spain’s exports to the US have been on a decline due to the euro/dollar exchange rate and the 13.8% duty rate imposed on Spanish artichokes made it uncompetitive. Peru and just recently Chile have achieved duty free status. This year, the poor situation in South America has Spain once again competing in certain sizes and quality ranges. Last year, Peru’s exports increase from 28,903 mtons in 2007 to 35,412 in 2008 (exports are expected to drop in 2009). Spain’s exports last year declined from 26,906 mtons in 2007 to 24,495 in 2008.

TOMATOES
Industry leaders met in Chile recently to disclose their global 2009 estimates, and the World Processing Tomato Council (WTPC) is predicting a record 40 million mtons of global processing tomato production. The Northern Hemisphere countries are expected to produce 36.8 million mtons, up from 33.6 last year. California production is predicted to grow by 12.5%. China is predicted to grow by 20%. Southern Hemisphere regions are predicted to grow by 11%. While it’s too early to predict pricing, industry leaders say regional shortages in 2008 and growing global demand will keep the price from falling - only time will tell. In the meantime, the stronger dollar has pushed down spot pricing for high-end Italian plum tomatoes imported into the U.S.

PEACHES
Chinese exports for 2008 rose yet again from 2007, with the USA remaining the largest customer. Chinese peach exports to the U.S. over the past few years have grown from 8,633 mtons in 2004 to 48,552 in 2008. A drought this year in northern and central China is expected to hurt production of peaches and asparagus.

OLIVES
AAO, the agency that tabulates data on production, trade and stocks of table olives in Spain has issued their final report for the 2008/2009 season. As of December 2008, the total production of table olives in Spain between September-December was 475,500 mtons, 13.2% less than last year, with the following results by variety:
-Manzanilla olives: Harvested volume is 5% more than in 2007. Total quantity was 196.700 Mt, compared to 186,700 mtons last year. Although the quality is good, the average size is smaller (300).
-Queen olives: the crop was very similar to last year, with 35,100 mtons compared to 34,700 mtons prior, but with smaller average size and higher percentage of azofairon (petite olives).
-Hojiblanca olives: volume was much lower than originally estimated. Total quantity was 179,700 mtons, compared to 244,400 mtons last year, about 26% less. The average olive size was also smaller (320).
-Carrasqueña olives: The volume harvested, at 28,300 mtons, was 40% less than last year. This variety is normally used as an alternative to Manzanillas.
-Cacereña olives: The harvest has been larger than last year’s, with 23,000 mtons compared with 19,500 mtons. Average size 280. This variety is almost exclusively used for high quality Spanish black olives, with normally a much higher price than hojiblancas and manzanillas.

SAFFRON
Saffron prices have doubled in recent months. Iran, the world’s major saffron producer, has reported a massive crop failure with crop output down by 40%. The worldwide imbalance has caused Spanish saffron prices to soar.

PASTEURIZED CRABMEAT
In Thailand, fishing is running well but sizing is very small. In Indonesia, crab landings are running behind last year, but general lack of demand from the U.S. has most plants running at less than 50% of capacity. In Vietnam, crab landings are down 40%. Overall weak demand in the U.S. market has ironically caused pricing to plummet to levels significantly below those needed overseas to replace the product.

SHRIMP (frozen)
After several months of weakness, raw material prices have shot up close to Rs.50-60 per kg when compared to January prices, mainly because of short supply as the season comes to an end. It was expected that raw material would last until mid March but the majority of the ponds have already been harvested and the next season will start only around May. Many packers are now in the position of running short against contracted orders.

SALMON (frozen)
Disease problems with Atlantic salmon are causing havoc for the industry in Chile. Because of the disease infectious salmon anemia (ISA), leading industry officials forecast Chilean salmon production to fall by 70 percent next year. They report that it will be at least 2015 before production returns to 2008 levels. As of February 2009, there were 203 farms infected, up from 91 six months ago, 35 a year ago (Feb 2008), and zero from the prior year. Right now, fish producers are holding off on setting out Atlantic smolt for fear of ISA. One source reported that releases dropped 83 percent in January compared to January 2008. Biomass was reduced by 61 percent in January. Market pricing is very firm.

SCALLOPS (frozen)
NMFS has issued the Sea Scallop management measures for the fishing year March 1, 2009 - February 28, 2010 (the 2009 fishing year). The full text of the regulations is available at http://www.nero.noaa.gov. Scallop prices are strong right now as boats are getting U/10 - 9.30 / 10/20 - 7.60 / 20/30 - 7.35. The vessels will spread out their catches through the year versus going out and catching more at one given time like we have seen in the past. We will see more of the open area fishing occur during May thru July, as that is the best time for production traditionally. It is projected that U/10 and 10/12 prices will be strong all year as we will have 50-60% less of this size this season versus last year.

TILAPIA (frozen)
Because of memories of last year’s freeze, Chinese farmers harvested tilapia early this year to avoid full ponds over the winter. This resulted in the processing of more 3/5s, fewer 5/7s and almost no 7/9s, as compared to prior years.

CATFISH (frozen)
The market is steady to firm with strong demand.

REMA FOODS IMPORT MARKET FLASH January 26, 2009

TRADE/POLITICS
The US Trade Representative has modified the list of items subjected to duties as a result of the World Trade Organization’s ruling against the European Union’s ban of hormone-treated beef. Starting March 23, a 100% punitive duty will be applied to European canned peaches, pears, various fruit juices, certain French chestnuts, Italian mineral water, lingonberry & raspberry jams, and chocolate (not in bulk form), among other items. Items with duty reductions include French mustard and Holland Rusk.

White House Chief of Staff Rahm Emanuel issued a memo to all federal departments and agencies on January 20 asking them to suspend the issuance of proposed and final regulations pending further review. U.S. Customs and Border Protection’s final importer security filing rule, also known as 10+2, is slated to become effective January 26. Press reports indicate that while this rule could be subject to review, it might also fall under the “national security” exemption.

In late December, President Bush issued a proclamation accelerating the elimination of import duties on several items under the U.S. free trade agreement with Chile. Of note, the list includes canned artichokes.

The recent drop in fuel prices along with lower demand for containers is pushing ocean freight rates down. So far, several lines have cut freight rates by about 10-15%. In order to stabilize pricing, steamship lines have, as of December 25, idled 165 vessels, effectively removing 430,000 TEUs (Twenty Foot Equivalent Units), representing 3.5% of the total world fleet in TEUs.

On February 18, 2009, the California port of Long Beach will begin collecting a Clean Trucks Fee of $35 per Twenty Foot Container. The fee is expected to raise about $1 billion over the next few years to accelerate the replacement of thousands of polluting cargo trucks.

Chinese New Year is today, January 26, 2009 - relatively early this year.

CURRENCY UPDATE
Trading in the U.S. dollar has been mixed: the dollar is slightly off of the highs it hit a few months ago, but stronger than the lows of last summer.

TUNA
Volatility is up in the tuna world. Financial pressure and panic brought end of year skipjack pricing to a several year low of just under $900/mton, down from $1200 a few weeks prior. However, poor catches in January forced the price within days to shoot up to $1050-1150. The initial steep drop caused fishermen to stop fishing, leading to raw material drying up, and a quick turnaround in the psychology of panicking packers and traders. While very little quantities were sold at the lowest prices, the market is now trying to stabilize at a level commensurate with raw material costs – which itself is trying to stabilize to a level commensurate with the catch. As panic subsides, true fundamentals will take hold: the most important of which are the fish catch, fish demand and fuel cost. As the single largest cost variable in fishing, fuel pricing peaked at about $150/barrel, pushing skipjack cost to $2000/mton, but oil is now around $40/barrel. While supply is variable, tuna demand is expected to hold up in the current economy as consumers turn to cheap proteins like canned fish. Currently, catching by Japanese boats is moderate, reporting 26 mtons per boat per day in Western Pacific; their Taiwanese and Korean counterparts performed at a level similar to last week with 15 mtons/boat daily. French and Spanish boats maintained catching in the Indian Ocean, taking in 15-20 mtons per boat/day. The whole Maldives remained poor, checking in only 70 tons each day. Skipjack-Yellowfin ratios is 85:15 in the Western Pacific; 25:75 in the Indian Ocean. Reported albacore price in Bangkok is $2600, up from $2450 in December. Local tongol catch is trading at Thai baht 51/kilo. To top it all off, according to Reuters, tuna catches in the south-western Indian Ocean are reportedly down 30% as pirates blocked access to tuna-rich waters off Somalia. From August-November 2008, fishing boats in the yellowfin rich waters beyond Somalia's Exclusive Economic Zone were attacked by pirates at least three times.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
After last year’s tight supply situation, this year’s crop is proving to be more abundant – not because of increased supply, but rather weaker world demand. Thailand’s next season is expected to come early as packers predict a March crop peak rather that the usual April peak. China’s pineapple exports to the US have been growing consistently since 2005 and the U.S. now accounts for close to 50% of China’s pineapple export market.

MUSHROOMS
While fundamentals reported by the packers should point to stronger market, the overall market remains extremely weak. China’s crop season is underway and growers are still reporting an estimated drop of 50% in raw material supply. In the Fujian province, which accounts for about 60% of China’s crop, the season started late due to unusually warm weather. Most farmers, discouraged by the current low prices, are reducing their output to minimize losses. However, it is also being reported that most Chinese packers have carry-over inventory from the 2007/2008 crop season. India continues to produce regularly and is generally keeping competitive with China to guarantee a continued order flow.

MANDARIN ORANGES
The Chinese crop season, whose peak started in mid-November, will be ending early this year because of the sooner than usual date of Chinese New Year. Volume is reported to be good this season with likewise good quality of fruit expected. While the above average quality is advantageous for whole segment production, it may actually cause a shortage of broken segment packs. The Spanish crop season has just ended as well and packers say that it was a good year in terms of raw material. However, with an anti-dumping duty in place on Chinese mandarins brought into Europe, Spanish pricing is artificially inflated and totally uncompetitive for shipment to the U.S. market.

ARTICHOKES
Peru and Chile have both ended their crop seasons earlier that forecasted. Farmers in southern Peru did not plant substantial quantities due to drought; the next crop cycle doesn’t begin until April. Chile has just been granted duty-free access to the U.S. (Peru already has duty free access), while Spanish artichokes still carry a 13.8% duty. The Murcia region in Spain was blanketed by a frost last weekend that may negatively affect as much as 30% of the crop. Some packers are reporting that only the first cut was affected; the second flowering is already on the plants and should be available soon. Other sources such as China, Ecuador, Egypt and Turkey have industries still in their early stages. Product quality from these countries is still far from that of Spain, Chile and Peru.

OLIVE OIL/EDIBLE OILS
Initial forecasts for the current season point to a total olive oil production of 2,351,000 mtons, down from 2,451,000 last year, but up from 2,526,900 the year before. Carryover, at 219,900, is similar to last year. Consumption is forecasted at 2,353,000 this year, compared to 2,433,000 last year resulting in a balance similar to last year. Estimated crop size by major producing country is: Spain 1,100,000 mtons; Italy 500,000; Greece 250,000; Turkey 150,000; Tunisia 120,000; Syria 100,000; and Morocco 70,000. Year-end financial pressures on the smaller packers and farmers caused significant weakening of raw material cost in December, while the stronger U.S. dollar further lowered costs for the U.S. market. On the other hand, January brought some firming in costs and a weaker dollar, for a higher market price.

PASTEURIZED CRABMEAT
A report from the Chesapeake Bay Foundation has concluded that pollution and overfishing have devastated the U.S. Chesapeake Bay's blue crab harvest. December saw some players – primarily importers heavily dependent on crabmeat – dropping prices for imported crabmeat in an attempt to raise cash before year end and to avoid defaulting on year-end bank covenants. However, January brought less panic selling and some stabilization to the market.

SHRIMP (frozen)
US Customs is sending a team to Indonesia to investigate the largest packer there, which they are accusing of transshipping Chinese shrimp to the USA in an effort to circumvent the US anti-dumping duty of 112.81%. With regard to overseas production, the second harvest season is almost nearing the end and raw shrimp arrivals should be over in a few weeks time. There is expected to be a prolonged dry season with the next crop harvest coming only by end May.

SCALLOPS (frozen)
A majority of the boats saved a couple of trips from the end of the year in the Elephant Trunk (ETAA) area and will be landing the allowable 18,000 lbs, with an average of 70% 10/20 size and 30% U/12 size. Landings were enough to cover the holiday business, but no over abundance is expected to flood the market and create lower boat prices. The New England Fishery Management Council (NEFMC) will meet in February 2009 to make final the scallop fishing regulations for the new season, presenting them to the National Marine Fisheries Service. The council is also working on a long range fishery plan that has to be in place by 2010.

TILAPIA (frozen)
Turmoil in the World’s economies has had an effect on tilapia markets. Prior efforts by Chinese producers to reduce their dependence on the U.S. market have been stymied with weakening economies of other potential markets such as Mexico and Russia. To avoid another freeze, Chinese farmers harvested most of their fish this year before winter, producing plentiful supplies of smaller fillets. While small fillet commodity pricing is down from last year, the market remains firm for higher quality product. Supply could be short as Chinese plants will be closed for the New Year holiday. Supply should improve by May 2009.

SALMON (frozen)
Despite a sharp change in the exchange rate of the Chilean Peso vs. the U.S. dollar, the market for Atlantic salmon remains firm due to ISA problems and forecasts of much lower production going into 2009. Production for 2009 is projected to drop more than 40% compared to 2008. Many Chilean producers are having serious financial problems and with the lower production, packers are predicting that prices could rise substantially come spring.

CATFISH (frozen)
After a slight price firming at the end of 2008, Chinese catfish supply remains steady at this time.

Dollar vs Euro (past three months)

REMA FOODS IMPORT MARKET FLASH December 15, 2008

TRADE/POLITICS
The US Department of Homeland Security’s new “10+2 Rule” for importers has cleared the White House and goes into effect on January 26, 2009. The rule requires importers to electronically transmit an Importer Security Filing (ISF) 24 hours before goods are loaded in the overseas port. Required information is extensive and goes so far as to identify where and by whom the goods were stuffed into the container. The process almost doubles the cost of entering product into the U.S. and heavily fines the importer for any errors. 10+2 holds the importer legally responsible for the accuracy and timeliness of the ISF, even for data beyond the importer’s control.

USFDA officially opened offices in Beijing, Guangzhou and Shanghai. In addition to China, FDA is planning to build a presence in India, Europe, Latin America and the Middle East. With these offices, the FDA will be in a better position to work more closely with manufacturers and share better manufacturing practices to further ensure food safety.

The Food and Drug Administration (FDA) is urging the government to amend its advisory that women and children should limit how much fish they eat, saying that the benefits of seafood outweigh the health risks and that most people should eat more fish, even if it contains mercury.

At this moment, the large tinplate manufacturers believe the concept of supply and demand does not apply to them. The reported global economic slowdown that has caused major commodity prices to tumble, including steel, is not yet affecting the price of tinplate. Tin manufacturers have announced 30-50% price increases for January 2009. Packers want to resist the increase, but given the near monopoly status of the large can makers, it appears to be a losing battle (for now at least).

The U.S. Trade Representative is considering adding products to the list of European products subject to increased tariffs as a result of World Trade Organization rulings against the European Union's ban on hormone-treated beef. Mustard already carries a 100% penalty tariff resulting from this dispute.

CURRENCY UPDATE
After reaching highs not seen since 2006, the dollar has tumbled a bit this past week. Above this report is an updated graph of the dollar/euro recent performance over the past three months (displayed as the value of the dollar in euros, so a higher figure represents a stronger dollar).

TUNA
Raw material prices continue to fall: Skipjack is down further to $1200/mton and there is talk of another significant drop on the horizon.. Yellowfin is trading normally at about $400 over skipjack. Tongol is relatively tight. Albacore remains stubbornly strong at $2450. One would expect Albacore demand to fall in the current economic climate, and skipjack, a traditional counter-recession protein to hold up well – exactly the opposite of what has been happening with pricing over the past month. Time will tell. According to government statistics, tuna imports for the first nine months of 2008 are up 3% in pounds and up 31% in dollar value. Supermarket dollar sales this year are running at a five year record and given the tough economy and declining tuna costs, it’s expected that unit sales will pick up in 2009 as consumers traditionally search for value proteins. According to the Philippine fisherman’s association, piracy is quickly becoming a significant factor in tuna fishing. Fishermen have petitioned the government there for permission to carry firearms.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
For the first nine months of 2008, pineapple imports are up 1.1% in cases and up 25.3% in value. As Thailand’s winter season intake peaked, and raw material prices came down to a more reasonable level of 3.7-4.0 baht/kg (from a high of about 6.00 baht/kg), demand from Russia tumbled along with the raw material prices. As the winter raw material peak is always short, packers claim the low price level won’t last. Still, the current market slowdown is keeping most buyers on the sidelines. Given the low prices and lack of demand, four Thai canneries have shut their lines and stopped taking in fruit.

MUSHROOMS
The Chinese mushroom season is on-going and packers report that total raw material available will be 40-50% less than last season. However, with some Chinese carryover brine stock still left over from last year’s crop, India shipping regularly and Holland recovered from their compost troubles of last year, the market is soft. For the first nine months of 2008, China has exported 341,523 mtons, compared with 294,650 for the same period last year and 244,033 the year before that. Russia was the second largest buyer after the U.S.

MANDARIN ORANGES
The Chinese crop season is on-going and is reported to be good but the season will be a little shorter due to an early Chinese New Year. Packers started out looking for a price increase (about 15%) from last crop due to the rising cost of cans, but weak demand quashed that. In addition, Europe has imposed exorbitant anti-dumping duties on Chinese mandarins that should force canneries to divert more quantities to the U.S.

ARTICHOKES
Two years ago, Spain exported about twice the artichokes of Chile and Peru combined. Over the past two years, this came full circle with Chile and Peru each exporting about as much as Spain does. This year however, dramatic currency swings are causing another reversal as a weakened euro is providing opportunity for Spanish packers once again to compete in the commodity artichoke market. After seeing their market share disappear on everything excluding specialty packs, the Spaniards are planning to compete again for commodity artichokes in 2009.

OLIVES
The season for green olives has ended. Packers are reporting a good crop for manzanillas but a short crop for queens. The manzanilla crop is estimated to have ended at 180,000 mtons (slightly less than last year’s 188,000 tons), but smaller sizes lowered processing yields. The gordal variety, used mainly for queens, ended quite short with only 21,000 mtons (vs. last year’s 35,000 mtons). The season for hojiblancas, used mainly for ripe olive production, is still on-going and is reported to be good.

OLIVE OIL/EDIBLE OILS
Initial reports point to a good new season for olive oil. Spain is reported to have about 200,000-300,000 mtons of carry over and this year’s crop is expected to come in at 2.3 million mtons. The expectation of a good crop, remaining carry over, the reality of slowing demand, and the current favorable exchange rate will all contribute to significant price decreases over the next few months as packers start shipping new crop oil. To combat fraud, several U.S. states are finally passing legislation to ensure the economic integrity of olive oil. So far, Connecticut and California have passed laws that closely match the International Olive Oil Council standard. The Association of Food Industries and the North American Olive Oil Association were both instrumental in the getting the bills introduced.

MUSTARD
Last crop’s fixation on alternative fuels has affected the growing areas available for mustard seeds, the majority of which come from Canada. Many Canadian farmers found it more attractive to convert their land to canola and wheat to receive subsidies from the government. This significantly affected the supply of mustard seeds resulting in an enormous 144% raw material cost increase. To make matters worse, the possibility of an increased duty rate on mustard (now already tariffed at 100 %) is being reviewed by the U.S. Government.

WATERCHESTNUTS
The new Chinese season for waterchestnuts is on-going and this year’s crop is reportedly much better than last year’s. Prices, which almost doubled last season, are expected to return to a more normal level this season.



PASTEURIZED CRABMEAT
The market in the U.S. is understandably quiet given the economic uncertainty facing consumers, and prices for crabmeat, one of the most expensive proteins sold in the U.S., have tumbled significantly. In Indonesia, Phillips shut down three factories and laid off all the workers associated with those plants and is now just operating two plants in Java. It’s been reported that several cash starved importers are using the current environment to get rid of poor quality packer label crabmeat.

SHRIMP (frozen)
For the first nine months of 2008, shrimp imports were up 2.7% in pounds, and up 4.6% in value.
Black Tiger arrivals in India for the second crop have just started but landing patterns clearly indicate minimal supplies with 30-40% less inventory than the first crop. Raw shrimp prices have been more or less stable with a slight weakening trend on most large sizes while prices on mid to smaller sizes have been strong due to very low arrivals. Black Tiger first crop arrivals in Vietnam are much lower than normal. More farmers are now tilting towards vannamei whites due to low viability on the tigers, but vannamei seasonal production is expected to taper off in the next few weeks. Given the economic climate, suppliers are closely monitoring sales as retailers brought in less shrimp than normal going into this holiday season.

SCALLOPS (frozen)
The Elephant Trunk Access Area (ETAA) re-opened on November 1 after being closed all of September and October for migrating sea turtles. The 275 trips that remain in this area need to be used by February 28, 2009. Most trips will yield 18,000 lbs each, so a total of approximately 5 million lbs should land during this 4 month period. Look for the 10/20 supply to be adequate, with limited availability on the U/12’s and U/10’s. The smaller sizes (20/30 and 30/40) will also have limited availability due to the ETAA yielding no smaller sizes. Traditionally the smaller sizes are landed from inshore areas.

TILAPIA (frozen)
Increased production, strength of the USD, and the desire by the Chinese producers to pull as much product from the ponds prior to Chinese New Year in January 2009 (in order to minimize risk against another “freeze” which was seen earlier this year) is putting some slight downward pressure on prices for smaller fillets, yet overall tilapia prices and sales remain strong.

SALMON (frozen)
ISA disease issues continue to hold down production; however a weak economic climate is so far preventing prices from increasing.

CATFISH (frozen)
Recently, a limited number of Chinese Catfish producers were removed from the FDA auto-detention list after they met FDA criteria for food safety. The result will be a reduction in import-related delays for imports of those company’s products.

5yr Graph of Dollar vs Euro

REMA FOODS IMPORT MARKET FLASH Nov 4, 2008

TRADE/POLITICS
What goes up can indeed go down. After more than a year of tight markets, the meltdown in the financial markets is bringing some relief to high food prices. While it may take some time for packaged good prices to decline at the local supermarket (if ever), prices on many commodities are falling. There are several reasons for the fall: (1) part is demand driven, as consumers that feel poorer are buying less; (2) part is cost driven, as for example, while skyrocketing oil/fuel costs pushed up the cost of fishing, the current lower oil costs are driving down costs; (3) part is financially driven, as packers unable to get credit are forced to liquidate inventory, while buyers without credit can’t buy as much and (4) part is psychological – with so many costs climbing over the past year, consumers begin to accept that cost increases were inevitable and producers believed that every cost increase could simply be passed on. Those times are over.

The North American Free Trade Agreement (NAFTA) was extended on October 16 for another year.

Effective November 17, a “Clean Trucks Fee” will be assessed on every container arriving into the Ports of Los Angeles and Long Beach. The fee is $35 per 20’, and $70 per 40’, and even includes intermodal shipments. This Clean Trucks Fee is in addition to the Traffic Mitigation Fee (Pier Pass) already charged for containers that move through these ports ($50 per 20’ and $100 per 40’).

CURRENCY UPDATE
If you think things are bad in the U.S., keep in mind that many in the market still believe it is worse overseas. Over the past couple of months, there has been a tremendous rally in the value of the U.S. dollar against virtually all currencies (except the Japanese yen, which is exceptionally strong). The dollar is now trading at 1.28-1.30 against the euro after reaching its lowest level sometime in July at 1.60. Against the Turkish Lira, the dollar is now 1.50, after reaching a low of 1.18 in July. Even the Canadian dollar, currently at 1.16, recently dipped to 1.28 to the U.S. dollar in comparison to 0.98 at its peak around mid year.

The above graph shows the dollar/euro for the past 5 years (displayed as the value of the dollar in euros, so a higher figure represents a stronger dollar).

TUNA
As oil/fuel prices have plummeted, so has the raw material cost of tuna. Raw material is at $1400-1500, falling from over $1800 just a month ago, due mainly to slower demand and lower fuel/oil costs. Even though raw material costs are down, fishing is not strong: catching by Japanese boats fell from the level of the previous week, reporting 27 tons per boat per day in Western Pacific, their Taiwanese and Korean counterparts also performed at similar levels. Catching by French and Spanish boats deteriorated in the Indian Ocean, checking in 20 tons per boat per day. The whole Maldives slowed down a bit, contributing 100 to 150 tons each day. Price of yellowfin is tracking down with skipjack as they are caught together in the same nets. Tongol has firmed slightly to 54.50 baht/kilo, but in dollar terms it is down a bit. Albacore market is still uncertain as packers attempt to raise pricing. The $700 billion bailout package passed in the U.S. Congress last month included a provision that continues duty free treatment for American Samoan tuna.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Thailand’s winter crop is under way. Raw material prices have come down from the “off-season” 8 baht per kilo to the “in-season” 5.5 baht/kilo. Interestingly, the relatively firm price in the U.S. over the past year has been caused primarily by strong demand: Thailand exported a record 410,691 mtons in the first seven months of 2008, with U.S. consumption up 5%, Germany up 9% and Russia up 20%. As demand from other softening global economies falls, more quantities might be channeled to the U.S. In the U.S., demand may hold, or even increase as consumers seek out cheap fruits. China’s crop is about to start; early reports indicate that the crop will be normal but final quality of fruit is still unknown. Chinese prices are expected to be about the same as last year if not a little higher due to increases in tinplate and other production costs. Indonesia is also reporting a normal crop, however fruit size is smaller.

MUSHROOMS
Market is soft as China is reportedly entering the new season with carry over quantities from the previous crop. The new season is about to start and it is still too early to predict the final output. Mushrooms in China are mostly grown outdoors and are therefore susceptible to climate changes. Some packers believe the crop may be 30% short as farmers reportedly planted less due to unattractive prices. Still, more important than what packers say is what they offer – and right now the offers are priced lower than last year, indicating a weaker market. There are reportedly two additional factories in China that will now be able to ship to the U.S. India has continued to ship consistently over the past few months.

TOMATOES
Global tomato production is reportedly finishing about 4.6% higher than 2007. Italy’s latest forecast put the total crop at 4.77 million mtons; slightly better than 2007, but down from earlier estimates of 5.0 million mtons. Reports show there is a minimal carryover from the previous season. This coupled with the slight increase in this year’s crop may not be sufficient to completely cover demand which is estimated to be growing at 3% annually. This situation is likely to cause speculative buying on the market. The recent surge in the value of the dollar could be a blessing for U.S. buyers.

PEACHES
Compared to California prices, initial indications point to good value for imported peaches this year, and buying activity has been strong. China is expecting a crop of 372,500 mtons, up 23% from last season. While Chinese domestic consumption is growing about 20% per year, most of the peaches head to the export market, and Chinese product is proving to be most competitive for U.S. buyers. Greek fruit is still uncompetitive even at the new dollar rate – but that may change as the dollar firms.

MANDARIN ORANGES
The Chinese mandarin season has started, and early reports predict the available raw material will be greater than last year. Spain is also expecting a good crop. There is an impending EU quota that may be imposed on Chinese mandarins going to Europe. Should this EU quota pass (a decision is expected around mid-November), more products may be available for the U.S. market. Due to the rising cost of tinplate and other production costs, opening prices are about 20% higher than last year, but supply and demand will set the true market price. The Chinese mandarin season is also expected to be a short one this year due to the early Chinese New Year.

ARTICHOKES
Peru’s unusual cold weather is affecting timely shipments of artichokes. Meanwhile, Spain’s artichokes may prove to be competitive once again as the dollar gains over the Euro.

OLIVES
Favorable weather conditions have led Spain to experience good crops of manzanillas and hojiblancas. This situation coupled with the strengthening of the dollar against the euro may lead to more competitive pricing for Spanish olives in the market. The situation is less bright for queen olives due to smaller olive sizes and no carryover.

OLIVE OIL/EDIBLE OILS
Reports indicate that there are about 150,000 tons of carryover from the previous season, the new season is expected to be good, and the dollar is strong. Last year’s high prices seem to have affected consumption levels in major olive oil markets. Extra Virgin, which reached about 3.00 Euro/kg around August, is currently at about 2.25 Euro/kg. In the blended oil market, prices are down due to falling soybean oil costs.

SAFFRON
Saffron, already the world’s most expensive spice, is reported to be about 40% short again this year. Farmers, speculating that the drought will continue, are reported to be still holding about 50 mton of saffron, hoping to get higher prices for this stock.

LEMON JUICE
Current shortages in the lemon juice market may be alleviated soon by the good new citrus crop expected in Spain. The crop, though running a little late, is expected to provide abundant raw material for the industry and the quality of the fruit is also reported to be good.

PASTEURIZED CRABMEAT
Hot summer weather has negatively affected the size of crab being caught with an average of 13-16 pieces and smaller. Jumbo and Colossal make up 14-15% of containers with larger amounts of Petite Jumbo, Backfin and Tiny Clawmeat. Production from Thailand continues to be poor over the last month although inventories are said to be adequate, while inventories in Indonesia are reported to be lower. In the U.S., demand is holding up, especially for the smaller grades. Some trading is evident in the larger, more expensive grades.

SHRIMP
Vannamei (white) prices remain firm on smaller sizes (31/40 and HLSO equivalent sizes) and demand is strong. Indian shrimp farmers are preparing to raise Pacific white shrimp after the government recently cleared the way for the species’ introduction into the country. Once the regulations have been sorted out, it is expected that Indian farmers will begin raising Vannamei within months. Inventories of Black Tigers continue to dwindle as demand is rated as fair. The market is awaiting the arrival of new season production which begins arriving in the U.S. this month.

SCALLOPS
Volume has been low on 10/20 and 20/30 and there has been no volume on the U/10. The Elephant trunk area reopened November 1st and will remain open until February 28, 2009. This will allow any vessels that have any days left from this year’s quota to go out and finish up. Most of this fishing will be done over the next 60 days before Christmas. Prices are expected to remain strong for 10/20 and 20/30.

TILAPIA
Farmers continue to harvest early, causing the supply of smaller 2/3 oz and 3/5 oz fillets to improve, while the supply of larger 5/7 oz and 7/9 oz fillets remain short. Frozen tilapia fillets, the main product traditionally supplied by China, have increased in price by 63% compared to September 2007. Further price increases are likely, at least until the new Chinese production will reach the market in mid 2009. Frozen tilapia fillet imports to the U.S. market were 43,200 mton in the first half of 2008, down from 48,100 mtons in the same period of 2007.

SALMON
Market prices have caught up with firming raw material costs overseas. Supply is down as the spread of infectious salmon anemia (ISA) continues to hamper production. SalmonChile, a Chilean farmed salmon industry association, predicted that salmon production could fall by as much as 20% this year, possibly dipping as low as 275,000 metric tons. Chile, the world's second-largest producer of farmed salmon, produced nearly 400,000 metric tons of salmon in 2007 worth more than $2.2 billion.

IMPORTED CATFISH
A slightly higher price is expected for 2009, but supply should become more consistent as some of the better Chinese factories are taken off auto-detention.

Value of the US Dollar in Euros

REMA FOODS IMPORT MARKET FLASH September 26, 2008

TRADE/POLITICS
Packers around the world are worried about the events on Wall Street - concerned that credit will get tighter and the dollar will get weaker.

FDA is proposing that imported food that is refused entry into the U.S. would have to be labeled as such. It is proposed that labels stating “UNITED STATES: REFUSED ENTRY” be permanently affixed and prominently displayed on the shipping packages, as well as any documents accompanying such food (including electronic documents). The hope is that this will be a deterrent for companies that tend to “port shop”, whereby products rejected in one port are redirected to other ports for entry.

The Federation des Aliments Conserves warns that the price of empty cans will rise by 12-15% over the next few months and another 15-30% in 2009. The cost of the tinplate raw material has gone up 50% since January due to strong demand for iron ore in China, India and Russia.

On December 31, 2008, both the Generalized System of Preferences (GSP) and the Andean Trade Preference Act (ATPA) are scheduled to expire if Congress does not renew the acts. Currently, legislation is before Congress to renew them but it remains to be seen if action to pass the renewal legislation will occur. Both of these acts provide duty free benefits to imports of merchandise from developing beneficiary countries (GSP) and from Peru, Columbia, Bolivia and Ecuador (ATPA).

Hurricane Ike forced the temporary closure of the port of Houston. Some steamship lines declared Force Majeure and rerouted cargo bound for Houston to other ports such as New Orleans. Customs offices had been closed until last week due to power and/or water supply issues, although Customs was manually processing hot shipments at the airport. Most operations are now running but backlogs exist.

CURRENCY UPDATE
The dollar has spent the past month on a roller coaster, ending down a bit from its recent highs. After falling a couple of months ago to a low of 1.59 dollars/euro, the dollar shot up to a peak of 1.39, before falling last week to 1.49 given the meltdown on Wall Street. The dollar closed most recently at 1.46 to the euro. Overall, we’re back to where we were about 7 months ago. A graph of the dollar/euro for the past year can be found on this site, above this post (displayed as the value of the dollar in euros, so a higher figure represents a stronger dollar).

TUNA
As predicted, lack of demand has caused skipjack pricing to ease – it’s now trading around $1820-1860/mton. Catch is reasonable at average 22 mton/boat/day, but with the lower pricing, demand is picking up so the future direction of raw material is less clear. Yellowfin is running at $2200/mton, down from $2400 and the yellowfin/skipjack ratio has increased in recent weeks. Tongol is running at 53 baht/kilo. Albacore cost is continuing to climb, which at $2900, is up more than 10% over the past two months. After months of price convergence for all the various grades of tuna, markets are now returning more to normal with spreads widening between light and white tunas. For Thai factories, the U.S. is still the largest buyer worldwide (44,000 mton Jan-June 2008), while Egypt has jumped to the second largest position market (at 22,000 mtons). In Indonesia, ownership of one of that country’s largest factories has changed hands, with 10 investors from the Philippines (80%) and Indonesia (20%) taking over.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Thai winter crop is on-going but not looking very promising. Opening prices for raw material have reached 8.00-8.50 baht/kg, while normal price level should be around 5.00-6.00 baht. Furthermore, while weather is normal at the moment, the threat of rains and floods remain during this crop season. Demand for pineapple continues very strong globally and the shortage of tinplate has caused packers to run behind in their delivery schedules. It is reported that the large national brands in the U.S. market are now on allocation, and buyers are scrambling to make up the difference with private label. Clearer prices for the winter crop will be available in October. Overall, the pineapple market in 2009 is shaping up to be even worse than in 2008.

MUSHROOMS
All eyes are on China as the new crop approaches. It appears that brine pack raw material from the previous crop is still readily available, forcing pricing down over the past few months. According to sources, growers are demanding high prices for new crop raw material but packers are not giving in because of their inventory position. India is reporting stable supply.

TOMATOES
Italy’s crop is finalizing better than the dire early season predictions. Still, at 4.6 million mtons, the crop is considerably shorter than last year, and the nationally agreed upon raw material pricing is 60% higher than last year. On top of this, the tinplate prices have continued to rise and are even expected to increase further in 2009. The US dollar’s strengthening against the euro has alleviated some of the price increase, but in general, this year’s price in dollars is predicted to be 10-12% higher than last year.

PEACHES
California crop finished better than initial estimates, but still 14% less than 2007 (70,000 tons less). Yields per acre also declined and canned inventories are expected to be tight. Greece is expecting an excellent crop, but most of their product is destined for Europe and South America. China’s final crop is still uncertain, but initial expectations point to a good season and a good competitive position for Chinese peaches in the U.S. market.

PEARS
Chinese pear crop is just starting and is expected to be normal.

MANDARIN ORANGES
It’s still at least a month before good estimates will be available from China with regard to new crop raw material; however it is a certainty that tinplate, labor, and similar expenses are up this year in China.

ARTICHOKES
Chile and the U.S. are in negotiations to speed up the removal of duty on Chilean exports of artichokes to the U.S. The U.S. Trade Representative's office is preparing to submit to Congress a report outlining the proposed changes. Congress will then have 60 days to review the proposal.

OLIVES
Spain is now expecting a mixed crop with initial estimates differing by olive variety. The manzanilla crop (normally used for green olives) has begun and early indications point to a good crop; however sizing of the fruit may be a bit smaller than average. For queens (large green olives), crop is predicted to be 30-40% worse than last year, with a lack of carryover from last year’s bad queen crop. For hojiblanca olives (mainly used for ripe olives and olive oil), outlook is good; but the hoji crop comes in last and doesn’t begin until October.

OLIVE OIL/EDIBLE OILS
Olive oil prices have started coming down due to the improved exchange rate between the dollar and the euro. Positive crop forecasts are also affecting current offers, even though new product is not yet available.

PEPPERS
Pepper prices from Turkey have leveled off a bit. This year’s opening crop prices started about 30% higher than last year due to initial predictions of strong demand from pepper paste producers and a short crop. The crop however came in better than expected, the pepper paste producers are not buying up all the production, and the dollar has strengthened against the Turkish Lira. Peru’s production is also on-going and is not experiencing any shortfalls.

VEGETABLES
As European packers continue to consolidate, Bonduelle of France is buying the Belgium canner La Corbeille. La Corbeille, with sales of $102 million, packs vegetables in cans and glass jars.

ASPARAGUS
Initial indications point to a good crop in Peru this season. The harvest is expected to start earlier than usual.

CAPERS
While it’s a bit early to make predictions, insufficient rainfall is expected to reduce the crop around 10% compared to last year. In addition, picking, processing and labor costs are up while carry-over stocks from last year are minimal

PASTEURIZED CRABMEAT
Landings of blue swimming crab continue to improve in the major producing countries, and prices have eased slightly. Demand however remains high and although gasoline prices have dropped, cost of bait and supplies as well as labor wages have remained strong. Tin plate shortages are causing severe disruptions to the pack, as packers are unable to source the lithographed cans commonly used for crabmeat production. Even with all the difficulties, the outlook is brighter for foreign packers than those in the U.S.: last Tuesday the Chesapeake Bay blue crab fishery was declared a federal disaster, opening the door to possible loans and financial aid from the government. Congress, however, still must approve funds for the ailing players in the domestic crabmeat market.

SHRIMP (frozen)
By the end of August, the conventional summer aquaculture crop of Black Tiger shrimp has come to an end in India and Vietnam. India experienced a 40% fall in the harvest quantity as compared to the same period in 2007, while the crop in Vietnam is down about 20%. Estimates for the winter crop in both countries are projected substantially lower compared to earlier years. Slow demand from the U.S. market however has so far prevented pricing from going up. Vannamei (white) medium to small sizes (31/40 and smaller headless equivalent sizes) are in heavy demand and prices have increased on these sizes. Farmers will be targeting these smaller sizes for the next harvest causing the supply of larger sizes to decrease in early November.

SCALLOPS (frozen)
Recent landings have yielded primarily 10/20 and 20/30 count per lb. U/10 landings have been light causing prices to rise. Overall a 10 day trip has been yielding 15,000 to 20,000 lbs. The ETAA (Elephant Trunk Access Area) is currently closed until October 31 to protect sea turtle migration through the area, but will re-open November 1 with approximately 100 trips remaining that will take in approximately 1.8 million lbs.

TILAPIA (frozen)
Farmers are harvesting early in order to take advantage of the current high raw material prices, causing better availability of smaller 2/3 oz and 3/5 oz fillets. Extremely high demand caused by customers trying to restore inventory levels is expected to keep prices high until summer 2009. While farmers predict that higher input costs as well as increasing world wide demand will prevent prices from ever returning to the very low levels of 2006/2007, long term supply and demand will determine the final outcome.

SALMON (frozen)
Poor supply coupled with strong demand from Russia, Europe and Asia has pushed prices up of over a dollar per pound as compared to just eight weeks ago.

IMPORTED CATFISH (frozen)
Prices overseas are up, and offer levels in the U.S. are expected to soon follow suit. Lab testing for all Chinese processors will continue until notice is given by the FDA for exempt factories. Supply is expected to be steady through the winter and into next year. Imported product will continue to represent the better deal over domestic fish, as domestic catfish farmers deal with the cost of fishmeal that has risen from $800 to $1800/ton over the past year (blame the rising costs of corn, soy and wheat). Domestic prices continue to rise as multiple farming areas in the U.S. are closed down.

REMA FOODS IMPORT MARKET FLASH Aug 26, 2008

TRADE/POLITICS
Finally, basic commodity prices have started turning around. Oil, corn, soybeans have all fallen. The Department of Agriculture is now forecasting the second largest corn harvest on record.

The Wall Street Journal’s editorial page summed it up: “Byrd’s Bad Idea is Back.” Senator Byrd (D., W.Va) is reportedly trying to reinstate the Byrd Amendment, which directed anti-dumping tariff money to the U.S. companies filing cases rather than the Treasury. As of 2007, some $1.9 billion was handed out and for several years, more than half went to just five companies. After the World Trade Organization (WTO) ruled the law illegal and authorized other countries to impose retaliatory tariffs on American exports, Congress finally repealed it. As the Journal points out, a revived Byrd Amendment “would trigger more retaliation, and at a time when exports are the main source of U.S. growth.”

A bipartisan group of House lawmakers want the Homeland Security Department to delay a cargo security rule from taking effect, saying it would likely disrupt the balance between security and commerce.
The proposed rule would require importers to submit 10 new categories of data on cargo containers before they are shipped to the United States by sea. Customs could put the rule into effect as early as November.

A California bill imposing a $30-per-TEU statewide fee on all containers moving through the ports of Long Beach, Los Angeles and Oakland is now headed to Gov. Arnold Schwarzenegger’s desk for a signature, following a 22-9 concurrence vote in the state Senate. Schwarzenegger has already indicated he supports the bill and is expected to sign it. The Ports Investment Bill (SB974) is projected to raise $400 million to $500 million a year.

USDA issued an interim rule for the mandatory country of origin labeling (COOL) program that will become effective on Sept. 30. The rule covers muscle cuts and ground beef (including veal), lamb, chicken, goat, pork; perishable agricultural commodities (fresh and frozen fruits and vegetables); macadamia nuts; pecans; ginseng; and peanuts - as required by the 2002 and 2008 Farm Bills. USDA implemented the COOL program for fish and shellfish covered commodities in October 2004. Commodities covered under COOL must be labeled at retail to indicate their country of origin. However, they are excluded from mandatory COOL if they are an ingredient in a processed food item.

The Food Safety Modernization Act written about in prior market flashes has now been officially introduced by Sen. Judd Gregg (R-NH) and Sen. Dick Durbin (D-IL) and co-sponsored by Sens. Tom Harkin (D-IA), Chris Dodd (D-CT), Richard Burr (R-NC) and Lamar Alexander (R-TN). Although it's unlikely any food safety legislation will pass this year, this bill has the best chance in being passed, and if not, will most likely be the base of any legislation introduced next year.

U.S. Customs & Border Protection (CBP) issued a General Notice in the August 7, 2008 Federal Register requiring all maritime containers arriving on or after October 15, 2008 to be sealed with a seal meeting or exceeding certain standards for strength and durability so as to prevent accidental breakage, early deterioration (due to weather conditions, chemical action, etc.) or undetectable tampering under normal usage. Each seal must also be clearly marked with a unique identification number.

This year, China has for the first time become a net IMPORTER of food, in value terms, with a deficit of US$5.78 billion on its trade in agricultural products in January-June 2008. The main agricultural imports are grains and cereals, soybeans and edible oils. China is still the world’s second largest overall exporter after Germany.

CURRENCY UPDATE
The US Dollar has been showing signs of improvement against the euro. It has gained several percent since last July. Current exchange rate is hovering around 1.46 to 1.49 euro compared to about 1.57-1.59 a month ago.

TUNA
Slower demand along with a better than average seasonal kinkai catch (17,500 mtons) have stabilized the skipjack market with raw material holding around $1940-1990/mton (kinkai is a dark, oily fish not normally shipped to the U.S., but its supply has an impact on overall light tuna supply and thus price). After a long string of steady increases, the market has now gone six weeks without any firming, and some slight easing may even be in sight. The big question is which will pick up first: demand or the catch. With the kinkai season coming to a close, fish traders believe the relief seen now will be short lived. Catch is stable but already at lower than normal levels: Taiwanese boats are catching an average 21 mtons/day; Korea 20 and Japan 19. South American packers, short for fish, are importing supply from the Far East at over $2,000/mton. Yellowfin and tongol remain very tight, especially the better grades (high end tongol now costs more than low end albacore). After stagnating much of last year, albacore has firmed to $2850/mton, up from $2680 a month ago.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
As Thailand’s summer crop is coming to an end and raw material becomes tighter, prices have increased to about 7.5-8.0 baht/kg, up from about 4.0-5.0 in the beginning of the crop. The smaller winter crop is expected to start around early October, but at this point it is still too early to predict the outcome as much is dependent on weather. China is undergoing a similar situation as Thailand. Indonesia, which suffered through severe flooding last year, is hoping to recover by October. Meanwhile, demand for pineapple for non-traditional export countries such as Russia and other Eastern European countries have significantly increased. Thus far in 2008, government statistics show pineapple import tonnage into the U.S. is up 5%, while the corresponding dollar value is up 26%. The major national brands are pulling back on holiday promotions and bids, and are now allocating to some customers, claiming shortages will last well into 2009.

MUSHROOMS
The supply situation seems to have considerably improved compared to last year’s shortages. China is reported to have quantities available in brine pack, but no fresh pack remains. India is the main source of fresh pack mushrooms at the moment.

PEACHES
The U.S. imported a record amount of canned peaches last season - 4.21 million cartons. China represented more than half the quantity, with Thailand surprisingly coming in second (while Thailand doesn’t grow peaches, they repack large quantities of peaches in plastic fruit cups destined for the U.S.). In foodservice sizes, thus excluding plastic cups, China’s peaches comprise 92% of current U.S. imports. For the new season, China’s crop is underway and is reportedly good. Costs however are a bit higher due to increased tin plates, labor and general manufacturing costs in China’s overheated economy. Greece is expecting an excellent crop; about 3-5% better than last year, but pricing in dollar terms is still expected to open significantly higher than from China, as has been the case the past few years. Meanwhile, California’s peach crop is underway and it appears that the final harvest may come in better than the forecasted “frost-affected revised estimates,” yet the base price for peach raw material has been set at $321/ton, up from $268/ton last year.

MANDARIN ORANGES
So far in 2008, imports into the U.S. are up 9.3% in tonnage, but up 22% in value. It’s still too early to gauge expectations for new crop.

ARTICHOKES
Unusual weather conditions in Peru have delayed the artichoke crop by 30-40 days. Volume will be significantly reduced and opening prices are up. Spain, on the other hand is expecting an excellent crop, so worldwide supply should be relatively stable. Unfortunately for U.S. customers, Spanish artichokes face a 14.8% duty, while Peru’s artichokes are duty-free.

OLIVE OIL/EDIBLE OILS
Olive oil prices overseas have come down slightly due to the stronger dollar. Soy bean oil prices have fallen significantly on the CBOT with more favorable weather conditions in the Midwest. Argentina’s decision to repeal the increased export tax, which mainly affected soybean exports, has altered the worldwide supply picture.

OLIVES
It’s still a bit early to gauge the European new crop prospects, but early indications are encouraging. In the U.S., the 2008 California crop is forecast at 65,000 tons, down 51% from last year’s crop of 132,500. Lack of rain and erratic temperatures are to blame.

SESAME SEEDS
Over the past two years, raw material costs have almost quadrupled as legislative changes in China flipped that country from a net exporter to a net importer overnight. Raw material prices were at $750/mton in 2006, climbing to $1030/mton in 2006, and to $2750/mton this year. Expect higher prices on sesame seeds as well as sesame oil, tahini and other related items.

CITRUS
Argentina, one of the major sources of lemon juice and concentrate, has reported a 40% decrease in production brought about by weather issues. Similar climate disruptions were experienced in Spain, U.S., Italy and Turkey. January through May export figures from Argentina over the past three years show lemon oil exports falling from 1445 mton in 2006, to 1080 in 2007, to only 668 in 2008. The shortage has firmed the market price of lemon juice concentrate to about $5,000/mton for 400gpl.

TOMATOES
It’s now becoming clearer that very hot weather in Italy will reduce the early variety yields by about 30%. The major problems are in the North and it’s hoped a good crop in the South could alleviate some of the shortfall. China, on the other hand, is still expecting a relatively good tomato paste crop (no significant quantity of whole tomatoes is exported). In the U.S., a relatively weak dollar and higher profit potential have led U.S. firms to substantially increase exports over last year. In Australia, police seized $440 million worth of ecstasy pills hidden in 3,000 cans of tomatoes, while in the U.S., a federal bribery lawsuit was filed against a U.S. tomato paste processor for allegedly funneling hundreds of thousands of dollars to buyers at companies including Frito Lay, Kraft, Conagra and Heinz.

PASTEURIZED CRABMEAT
Landings of blue swimming crab in the major producing countries improved over the past 30 days although the overall market remains very tight. Fuel costs dropped from all time highs but operating costs associated with bait costs and labor as well as overall demand for product have continued to increase the cost of raw material.

SHRIMP
Vannamei (white) shrimp has seen prices shoot up roughly 20% since April, as a result of rising production and fuel costs, as well as a concerted effort by the Asian farmers to harvest larger shrimp because of poor profitability in the smaller sizes. As a result price increased and demand fell, while tigers, having fallen in price, became a bargain. Against relatively weak demand, supply of white shrimp is improving and 30-40 through 60-70 count head on shrimp prices have begun to drop slightly. Black Tiger market is steady and prices remain attractive.

SCALLOPS
U/10 scallops from the Elephant Trunk and Nantucket Lightship have been commanding higher prices from the vessels. The Elephant Trunk area is located southeast of Delaware Bay and is close to 1,565 square nautical miles in size. It contains the highest density of scallops ever recorded in the Northeast region. The Elephant Trunk will be closed for the months of September and October causing scallops to be only caught from the open areas. Boats will be spread out and will have to fish longer to get their catches, causing price increases.

TILAPIA
Reports estimate that as much as 80% of the tilapia production in China was affected by the long, intense winter weather. Demand for Chinese tilapia exports has grown from 90,000 mtons in 2004 to 210,000 mtons in 2007. Supply remains extremely short but should continue to improve as the ponds recover.

IMPORTED CATFISH
Farm raised catfish production totaled 45.2 million pounds round weight for the month of June 2008, an increase of 21% from June 2007. Exporters believe higher operating costs, an appreciating Chinese yuan and strong demand will bring about higher pricing by the end of the year. Domestically, the four major producing states in the U.S. had 660,000 broodfish on hand on July 1, down 17% from last year.

SALMON
The Chilean Fisheries Authority (SERNAPESCA) issued a complete report on the infectious salmon anemia (ISA) problem in Chile, concluding that 11,000 mtons of salmon have been lost as a result of the year-old outbreak. So far this summer, Alaska's wild salmon harvests have fallen short of projections. The overall harvest through Aug. 1 is estimated at 72.8 million fish, below the original forecast of 132.5 million fish. Many predict even the lower figure won’t be reached.

TENTATIVE DEAL: MARATHON WEEKEND PAYS OFF FOR PMA-ILWU

The Pacific Maritime Association and the International Longshore and Warehouse Union announced a tentative agreement on a new six-year contract today after a marathon weekend bargaining session.

The contract still has to be ratified by the union members and by the companies that employ them.

The parties have agreed not to discuss details of the agreement until the union and PMA leaders have briefed their respective membership.

REMA FOODS IMPORT MARKET FLASH July 28, 2008

TRADE/POLITICS
As the current labor contract ended July 1, 2008, the Pacific Maritime Association, which represents 71 cargo carriers, terminal operators and stevedores, and the International Longshore and Warehouse Union, representing 26,000 union members serving 29 West Coast ports, have been negotiating actively since March. While initially a quick and amicable negotiation was expected, the situation has become heated over the past two weeks. Southern California marine terminal operators are now reporting that union dockworkers have engaged in "work to rule" actions at the Long Beach-Los Angeles port complex, the nation's busiest port. Operators estimated that the slowdown actions are trimming up to two hours per shift from actual work time and reducing terminal productivity by 20 to 30 percent. An aggressive offensive by the PMA to achieve contract concessions during the 2002 contract negotiations, further exacerbated by a union "work to rules" slowdown, resulted in a 10-day PMA lockout of ILWU workers that cost the national economy upwards of $1 billion per day in losses. CBS.MarketWatch.com listed West Coast longshoreman in its list of the “Ten most overpaid jobs in the U.S.”

The upcoming Olympics in China are apparently having a greater affect on Chinese exports than originally expected. In order to clear the air of smog, the government has halted production at many plants (excluding those working around the clock to prepare for the Olympic Games). The shutdown continues until both the main Olympic and Paralympic Games (for handicapped athletes) conclude on September 17. According to Business Week, factories that consume a total of 13 gigawatts of electricity could be taken off-line – the equivalent of nearly half of Mexico’s total industrial capacity. In Beijing, drivers are now only permitted into the city on certain days based on an even/odd license plate rule (resulting in executives buying two cars to cover both license plate designations)

Every year, the US government analyzes the GSP duty free designation given to many imported products. When imports of an item from a particular country increase over a threshold, or become more than 50% of US imports, the duty free classification can be lost resulting in higher selling prices. The President has the ability to waive the change under various conditions. For the major food items covered in this report, there were no significant changes this year. A full list can be viewed at: http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/GSP_2007_Annual_Review/Section_Index.html

The 2007 per capita seafood consumption figures have been released and it shows that U.S. consumers are eating much the same top 10 items as recent years. Consumption of tilapia and salmon increased the most from last year. Overall, Americans ate 16.3 pounds of seafood in 2007, down from 16.5 in 2006. The top ten items (with per capita consumption) are: shrimp (4.10 lbs), canned tuna (2.70), salmon (2.36), pollack (1.73), tilapia (1.14), catfish (0.88), crab (0.68), cod (0.47), clams (0.45) and flatfish (0.32).

USA Today reported that FDA may loosen restrictions imposed last year on Chinese seafood processors, following recent FDA inspections/audits of 13 Chinese seafood processors, including some of China's largest. Impressed with their findings, FDA will decide within weeks on whether to relax the restrictions. If this happens, the FDA will rely more on Chinese certifications.

In Argentina, the long drawn out protest/strikes staged by farmers have finally come to an end as the government rescinded the export tax increase that was levied in March 2008.

CURRENCY UPDATE
Unfortunately, with U.S. banks reporting ever worsening financials, the dollar has resumed its tumble and is once again approaching its record low against the euro, at about 1.58.

TUNA
Skipjack raw material costs may have peaked as packers’ expectations for $2000+ fish has not materialized. Highest levels remain stuck at $1980/mton in Asia, but about $300 lower in Ecuador. Ecuador however has decided to stop fishing for 42 days for its annual eastern Pacific fishing ban. Packers still predict a firm market through the end of the year, but market demand has been weak at the current levels, and any improvement in catch could bring about a decline in pricing. Major storms for the Philippines now in their monsoon/typhoon season have been playing havoc with local supply. Catching by Japanese boats slowed down to 18 tons per boat per day in the Western Pacific, while their Taiwanese and Korean counterparts recorded only 12 tons of tuna per boat daily. French and Spanish boats continued to anticipate poor catching in the Indian Ocean, providing less than 10 tons per boat/day. Daily catch in the whole Maldives showed no sign of improvement, reporting 100 tons of materials. Supply of the seasonal kinkai fish is expected to be less than half compared to a normal year (kinkai is a dark, oily fish not normally shipped to the U.S., but its supply has an impact on overall supply and thus price. Be aware of very low offers as thry could be kinkai). Skipjack-yellowfin ratios are running 92:8 in Western Pacific; 85:15 in Indian Ocean. It’s reported that tuna boat owners' associations in China, Japan, South Korea and Taiwan collectively grounded their fleets last week due to increasing gas prices. Yellowfin is trading in Bangkok at $2350, in Japan/Korea at $2500, and in Spain at $2900. Albacore is trading in Bangkok at $2680. Chinese exports of canned tuna for the first half of 2008 soared to 16,193 mtons, up from 10,827 in 2007 and only 2,281 in 2005. While impressive, the figures are still minuscule compared to Thailand which exported 211,980 mtons in the same period. Finally, the deal for Starkist to be sold by Del Monte to Dongwon, a South Korean company, was completed at $363 million.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
The largest national brand in the U.S. is pulling back on holiday promotions and bids, and is now allocating to some customers, claiming shortages that are expected to last well into 2009. Thailand, Indonesia and Malaysia all report having very little raw material available for processing. This situation, coupled with rising production costs continue to push up prices. China is still a few months away from its new crop season which begins in October.

MUSHROOMS
The market is weakening slightly as China offers its brine pack mushrooms. India is reporting regular production but might have to cut pricing to compete. Holland seems to have recovered from their compost problems of last year; however the euro/dollar exchange rate makes Dutch mushrooms uncompetitive.

TOMATOES
Italy’s early Northern harvest will be at least 10% lower than original estimates, while rain and humidity reduced yield by over 20%. Combined with what they call “extreme” production cost increases, some packers are floating talk of a 40+% price increase. It’s still too early to judge though, as later varieties could still alleviate the early crop shortage. At this point, anything could still happen.

FRUIT/PEACHES
The California Clingstone crop is forecast at 380,000 short tons, down 24% from last season. The California Canning Peach Association (CCPA) ratified its 2008 price agreement with Del Monte Foods setting a base price for peaches at $321/ton, up from $268/ton last year. Greece is expecting 285,000 metric tons (314,000 short tons) this year, close to last year’s number. The Greek price to the farmers is averaging euro 0.27/kg compared to euro 0.24/kg last year, and of course the dollar is significantly weaker this year compared to last. China remains the best hope for the U.S. market.

PEARS
Chinese pear exports surged dramatically last year to 61,073 mtons, up from between 22,714 and 16,079 mtons over the past four years. The U.S. was by far the largest customer, and China is now by far the leading pear exporter worldwide.

PEPPERS
Spain ended its season shorter than forecasted with some packers withdrawing offers midstream. Turkey is expecting a normal crop, but opening prices are about 15-20 % higher than last year's pricing, mainly due to rising production costs and the weakening of the dollar against the Turkish Lira.

JALAPEÑOS
Heavy rains in the north have led to a disease that has drastically cut Peru's production of jalapenos this year by 80% compared to last season.

PEPPERONCINI
As with other peppers, Turkey is expecting a normal crop but this year’s prices are up due to the appreciation of the Turkish Lira and higher production costs. Although Greece is also reporting a normal crop, the euro is 18% stronger now than in the same period last year.

OLIVE OIL
Coming from the 2007 crop, it is reported that raw material available for the manufacturing of pomace was extremely short. This is due to several factors:
- As refineries become more efficient, there is less oil left behind for further processing.
- With rising fuel costs, some have found rendering of pits for fuel a more profitable option.
- Tinplate cost has increased about 20% and freight rates from Italy have increased $400-600/TEU.
- Lastly, the euro has strengthened against the dollar.
Domestic oil prices have come down slightly in the last week, with the Soybean contract on the Chicago Board of Trade down a few cents.

SAFFRON
Prices remain firm and are not expected to soften any time soon. New crop won’t be available until October.

CITRUS/GRAPEFRUIT SEGMENTS (GFS)
Florida’s orange crop has rebounded and is up 32% in volume compared to last year. The grapefruit crop at 26.6 million boxes is about even with last year’s 26.5.

PASTEURIZED CRABMEAT
Hot temperatures have negatively affected landings of blue swimming crab in the major producing countries. Rising fuel costs have caused fishermen to catch in shallow areas resulting in smaller crabs. The crab landing has slightly improved but the prices continue to rise. Domestically the Chesapeake crab processors are struggling with strict new regulations designed to protect dwindling crab production in the Chesapeake Bay, which according to Virginia and Maryland fisheries managers has seen stock drop 70% since 1990 due to overfishing and water pollution.

SHRIMP
Black Tiger prices remain attractive and shifts in buying are being recognized in the industry as White Shrimp prices continue to remain relatively high. The US Dept of Commerce issued final results of the antidumping duty margins in the administrative review of frozen warm water shrimp from India covering the period February 1, 2006 through January 31, 2007. The final results for the major Indian exporters are all minimal, ranging from 0.35% to 1.69%. In Thailand, antidumping rates are generally between 2.29 and 6.82%, and the industry projects shrimp production will be 430,000 mtons this year, a drop from 470,000 mtons last year. The World Trade Organization (WTO) ruled in favor of Thailand and against the U.S. Continuous Bond requirement for shrimp, which could force the government to return $360 million in bonding fees covering Thai shrimp alone. In a positive step, FDA is using the shrimp-farming industry as a test case with the goal of drafting guidance for third-party certification programs to ensure imports meet FDA requirements.

SALMON
According to Chile’s Directorate of Fisheries (SERNAPESCA), the Infectious Salmon Anemia (ISA) epidemic has reached its peak and the number of infected farms is expected to decline over the next few months. SERNAPESCA has enacted stricter measures to prevent the spread of ISA, including requiring all ova producers, mainly from Norway and Scotland, to undertake a full check of their brood stock and to certify that their ova are not infected. In the meantime, with production declining, pricing is firm. In the U.S., a fire destroyed the only processing plant in Chignik Bay (one of Trident Seafood’s plants).

SCALLOPS
Prices continue to be strong. The boats that are fishing in the open areas (Channel and Mid Atlantic region) are catching 10/20 and 20/30 and the prices are beginning to climb. Additional boats will fish in the open areas in the next 30-60 days.

TILAPIA
Supply remains extremely short. Even with demand and per capita consumption on the rise, imports have dropped 9.4% for the first five months of 2008 due to the freeze related supply disruption from China earlier this year.

CATFISH
Look for possible increases in new season pricing towards the latter part of the year due to higher operating costs and exchange rate appreciation of the Chinese Yuan. 2/3 and 7/9 sizes are short at this time. According to the New York Times, the soaring cost of soybean and corn feed have forced many domestic U.S. catfish farmers in the South to drain their ponds. Compared to that of beef and pork production, feed is a larger share of the cost to raise catfish (more than half). For example, Dillard & Company, which last year raised 11 million fish, will raise none this year, calculating that they lost 33% on each catfish they sold. Imports of catfish and pangasius into the U.S. rose 30% in volume for the first five months of 2008 as compared to 2007. Interestingly, worldwide Vietnamese pangasius exports are projected to surpass 500,000 mtons this year, generating over $1.2 billion. Sales in the U.S. are limited by stringent anti-dumping measures put in effect to protect domestic catfish farmers.

REMA FOODS IMPORT MARKET FLASH June 23, 2008

TRADE/POLITICS
Effective 15 October 2008, U.S. Customs and Border Protection (CBP) will require all containers in-transit to the U.S. to be secured with a high-security bolt seal. Importers are responsible for ensuring their containers are sealed according to regulations. Although this is a new regulation, it is not a new industry practice, as virtually all maritime cargo containers entering the U.S. are already secured with a high-security bolt seal as mandated by C-TPAT.

Truckers around the world are causing havoc as they strike to protest the high cost of fuel. While this obviously did nothing to lower the cost of fuel, strikes in Spain, France and Greece halted virtually all commerce for several days. Argentina likewise is suffering from an agriculture strike as farmers protest an export grains tax increase of more than 10% levied in March.

China is busily preparing for the upcoming Olympics. This has affected some factories as they have been ordered to stop production in order to minimize air pollution. Stricter inspections at the ports are also causing delays in shipments.

For some canned vegetables, imports will be a welcome help in alleviating the Midwest flood induced shortages that are expected for 2008 and even 2009. Major vegetable for canning states such as Wisconsin, Indiana and Illinois have been severely affected. Grain corn and soybean supplies look to be historically tight going forward.

Greenpeace released a report titled "Carting Away the Oceans: How Grocery Stores are Emptying the Seas" ranking retailers according to their sustainable seafood purchasing policies. While Wegmans and Ahold scored the highest, the report generally gave failing grades to the entire retail sector. The National Fisheries Institute called the report misleading and alarmist.

The latest government statistics show wholesale food prices are up 6.3% for the Jan-May 2008 period.

CURRENCY UPDATE
The dollar has temporarily stabilized with no significant movement over the past month.

TUNA
Skipjack raw material continues to break records with sales occurring at $1950/mton and packers talking about $2000. Amazingly, skipjack pricing today is higher than albacore pricing was just last year. Catch in the Western Pacific is averaging 37mt/day/boat; Indian Ocean only 10mt/day/boat (20%YF mix), and Maldives only 100mt/day total. The yellowfin percentage of the catch (vs skipjack) has been declining and prices are climbing accordingly. Tongol, a species caught locally off Thailand and Indonesia, is almost nonexistent. Albacore, which months ago dipped to a recent low point in price has started to firm (now at $2650/mton) but still represents good value compared to light tuna. The 2008 World Tuna Conference just finished up in Bangkok with much discussion given to sustainability and the data showing that (1) skipjack, which makes up the majority of tuna caught worldwide, and albacore are sustainable and able to grow further to meet growing world demand, while (2) yellowfin is not at this moment overfished but needs to be watched, but (3) bluefin is already overfished and not sustainable unless drastic action is taken. Given the strong worldwide demand and the increased cost of key factors such as oil/gasoline, the director of Infofish in his speech summarized: “the term ‘cheap tuna’ is a thing of the past.” In the branded world, it looks like a deal may be imminent for Starkist to be sold by Del Monte to a South Korean company.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Pineapple raw material has just hit a record high price of 7.5 baht/kilo. Tinplate is short, and with the current season coming to an end, some packers in the major producing countries are reporting late raw material receipts are down 80% from the expected volumes. Overall, packers and the industry in general are bracing for a very tough 2008. China, a relative newcomer in the pineapple industry, had a record year last year shipping 80,900 mtons as compared to about 64,000 mtons last year. At 37,200 mtons, the U.S. was the largest customer. Unfortunately, compared to established sources like Thailand, Indonesia and the Philippines, the Chinese production, while rising, is still minimal.

MARASCHINO CHERRIES
According to the National Agricultural Statistics Service (NASS) and USDA, U.S. tart cherry production is forecast at 177 million pounds, 30 percent below the 2007 production and 33 percent below the production in 2006. Michigan, the largest producing State, expects a crop of 135 million pounds, down 30 percent from the 2007 crop and 29 percent below 2006. Multiple spring freezes and wet weather during pollination hampered fruit set in the northwest and west central regions. However, growers in the southwest region were more optimistic about the crop potential. U.S. sweet cherry production is forecasted at 249,580 tons, down 23 percent from 2007 and 15 percent below 2006. Note picking starts now – processing is still about 6 weeks away.

TOMATOES
USDA released its 2008 California crop estimate at 10.6 million tons, 2% below last year. Growers and processors at the World Tomato Congress (held this year in Toronto) however, believe the estimate is too high, and 9.6 million tons is a more likely outcome. Chief concerns are water and labor. Another talked about topic at the Congress was the EU’s Common Agricultural Policy (CAP), which will phase out all tomato subsidies between now and 2011 and turn instead to government income support per acre. The new support structure is estimated to cause production to decline by 10.1% over the next 6 years. Meanwhile, global demand is growing and is expected to increase by about 1 million tons per year with world consumption reaching 39 million tons by 2010. China, now the second largest world producer after the U.S., is growing its production by 15% per year and is the source most likely to fill unmet worldwide demand.

FRUIT/PEACHES
The California Canning Peach Association is projecting a 2008 peach crop of 377,900 short tons, down 23% from 2007. Average yield is projected to be down 19% from last year. China is still quiet about its peach prospects, but initial reports point to a good production with opening prices about 5-10% higher than last year. Greece is expecting a very good season, but strong demand and a weak dollar might price them considerably higher than last year. With most Greek packers now sending their lower end peaches to the puree line, the majority of their canned product will be high choice/fancy quality with very little production of irregulars. China, on the other hand, should be competitive throughout the line and could be in a position to offer relief to the shortage in California. In South America, only about 2% of the Argentinean and Chilean crop went to the U.S. – the vast majority was exported to other South American countries such as Mexico, Peru, Brazil and Columbia.

PEPPERS
While it’s still early in the season, Peru suffered flooding last month which damaged some of the crops. Spain is reporting a short crop as farmers, worried about aggressive competition from Peru and Chile, did not plant extensively. To make matters worse, demand in the Spanish fresh and IQF market are strong. Turkey seems to have more acreage planted this year; but strong demand for IQF peppers and pepper paste in Europe will leave less available for canning. The best case scenario seems to be that prices will be the same as last year.

SAFFRON
While most U.S. saffron is imported from Spain, the world market is actually dominated by Iran. After the Iranian government several years ago started buying saffron at high prices and selling directly to exporters, the market has now skyrocketed to $2800/kg. To put this unbelievable increase into perspective, the market was only $400 just three years ago.

CITRUS
The Florida Dept of Citrus (FDOC) put aside $20 million, a third of its 2008/9 budget, to finance research on “greening,” a disease that’s been labeled the most serious problem ever seen in Florida. In South Florida, infection rates in some groves have already hit 60%.

PASTEURIZED CRABMEAT
Blue swimming crab continues to rise in price, with shortages most apparent in claw meat. Packers are not projecting any improvement in the immediate future. Meanwhile the Chesapeake Blue Crab Harvest is off to a good start.

SHRIMP (frozen)
A decline in tiger pricing is bringing excellent value and opportunity to the sector, especially compared to the relatively high price of white shrimp. In India, value added black tiger shrimp is shipped mainly from the Province of Andhra Pradesh (North of Chennai on the South East Coast of India). First crop harvest began there about one month ago and arrivals compared to 2007 are down by about 30%.

SCALLOPS (frozen)
Prices have been strong over the last month as the volume has dropped off on per day production. Most of the boats have been fishing in the open bottom area (Channel and Mid Atlantic region). Minimal catches of the 10/20 and 20/30 sizes along with higher summer demand should push pricing higher in late June and early July.

IMPORTED CATFISH (frozen)
Steady to rising demand though 2008 and into 2009 Lenten season is expected. Imported tilapia is very short while rising feed and fuel cost is creating a burden for domestic U.S. catfish farmers, causing domestic farms to downsize and/or possibly shut down. Taken together with the strengthening Chinese currency, packers are looking for higher prices in the near term future.

REMA FOODS IMPORT MARKET FLASH May 21, 2008

TRADE/POLITICS
With everyone starting to think “green,” a recent study shows that imports can actually have a lower carbon footprint than domestic product. The New York Times ran a cover article entitled “The Environmental Cost of Shipping Groceries All Over the World.” The article showed that the carbon footprint of a bottle of red wine in New York was significantly lower for a European wine as compared to a California wine (1371gm vs 2514gm), mainly due to the vastly lower pollution produced shipping a container across the Atlantic as compared to driving a truck across the United States.

China has experienced a devastating earthquake. While tragic for the loss of life, initial indications are that given the region that was hit, it is not expected to have a major effect on food exports.

Most steamship lines finalized their rate increases at $500 to $700 increase per container, depending on the vessel route.

Rep. John Dingell (D-MI) circulated a draft bill whose main provisions address the following: Registration of food facilities and importers, food safety plans, certification program, laboratories, mandatory notification and recall, civil fines, and country of origin labeling.

CURRENCY UPDATE
As usual, when the dollar has no place to go but down…..it goes up. After reaching a record low point of 1.60 last month, the dollar firmed up recently to 1.55, but has unfortunately traded off a bit over the past couple of days (higher number represents a firmer euro, weaker dollar). While the dollar is still significantly down for the year, many on Wall Street are now predicting a firming dollar through the rest of the year.

TUNA
Higher tuna costs are about to change what you buy in the supermarket: the long established 6oz tuna can will soon be switching to 5oz, with Starkist leading the way. With traders wondering how high it can go, skipjack pricing is breaking through yet another record peak as raw material traders offer at $1800/mton. While western Pacific catching is improving for Taiwanese, Korean and US fleets, the Indian Ocean catch is poor and catching has declined in the Maldives. Strong worldwide demand, higher fuel/oil costs and weak catch are having the greatest impact. Oil, now the single greatest cost component of tuna, is over $130. Domestic production continues to fall as Starkist announced layoffs in American Samoa because of a minimum wage increase (Note: Del Monte is still trying to sell their StarKist division). Yellowfin raw material is up significantly, offered at $2500/mton vs $2350 last month. Due to heavy monsoons, tongol is virtually nonexistent and higher qualities are now trading above the price of albacore. Albacore is up $50 to $2450/mton and still represents the best bargain in the tuna world. Import statistics confirm that most buyers agree and are promoting albacore instead of light tunas. Thai albacore shipments to the U.S. for the first three months of 2008 are up 49.5%, while Thai light tuna shipments for the same period are down 32.3%.

PINEAPPLE
In Thailand, the continued tinplate shortage and the lack of coated cans is severely affecting production. Raw material prices are trading at 5.00-6.00 Baht/kg. As a lower cost fruit, pineapple is one of the fruits most affected by surging worldwide demand from newly emerging markets such as Russia and the Middle East. In China, the domestic demand has been very strong, leaving very little raw material available for canning. As a result, China’s prices have gone up 35% from last year.

TROPICAL FRUIT SALAD (TFS)
While pineapple and tropical fruit pricing normally move in concert, the current environment is seeing firm pineapple pricing concurrent with weaker tropical fruit pricing. The cause is papaya – while a severe shortage last year caused TFS prices to rise faster than pineapple, the much better crop this year has helped to offset increases due to pineapple and tinplate.

MUSHROOMS
As the fear of severe shortage has died down, prices have stabilized at levels slightly lower than last year. India, while still behind in shipments, continues to ship some quantities regularly. China’s season is over so availability of fresh pack mushrooms is now limited. It is reported however that a normal quantity of brine pack will be available for the year, as it appears the earlier freeze did not materially hurt the crop.

MAPLE SYRUP
Maple syrup production has been experiencing a shortfall for the past two years. The 2008 season is expected to end with approximately 55 million pounds - 30 % below normal production, while demand for maple syrup is reported to be over 100 million pounds. Needless to say, the available product is being sold at a steep premium

FRUIT/PEACHES
Unusually cold weather for a few days in April has badly affected the peach crop in California. Early assessments show that some orchards were damaged by as much as 30-35%. It is widely believed that the 2008 crop will be down at least 25% from last year and may be close to the 355,000 tons delivered in 2006. Overseas suppliers are gearing up for the expected stronger U.S. demand. China is only about to begin its season, more will be known next month. Greece is reporting a good crop season but currency will determine competitiveness.

ARTICHOKES
While for many years South American prices have been trading at levels well below those from Spain, we’re starting to see convergence as Spanish price fall while South American prices rise. Spain just finished a very good season, and while euro FOB prices are down significantly, the fall is muted by the currency impact of the euro/dollar conversion. The Peruvian season will be commencing soon and initial indications there point to a very short crop and higher pricing than last season. One of the largest producers was forced to shut one of its two plants because of the earthquake that hit Peru last August. Chile is also about to begin its season and has reported a significant decrease in total acreage dedicated to artichoke planting. While exports are expected to be off 50%, the U.S. International Trade Commission (ITC) might soon propose duty free status for Chilean artichokes (currently a 8.7% duty is imposed on Chilean artichokes, while Peru is already duty-free, and Spain has a 13.8% duty rate in the U.S.).

RICE
As the rice shortage continues, India will limit the export of Basmati rice by imposing a rice export tax; a compromise solution reached against demands by some for a total ban on exports. The price of Jasmine rice has soared 30 % in just the past few weeks.

PASTEURIZED CRABMEAT
Blue swimming crab continues to be extremely short, with pricing up substantially from the beginning of the year (up over 50% on some items). Landings in the major producing countries remain poor but are expected to improve soon. Still, it will take some time for market supply to recover. Packers are quick to point out that prices are not expected to return all the way down to the old levels because of the severe appreciation of the Far East currencies against the dollar and the higher cost of oil.

TILAPIA (frozen)
Because of the freeze earlier this year, the Food and Agriculture Organization projects that Tilapia production in China may be down 80% compared to last year. The Guangxi province suffered the most damage, while the other two main tilapia producing provinces, Hainan and Guangdong in Southeast China, were not as badly affected. The group forecasts a tight market for the next 8 to 12 months.

SHRIMP (frozen)
The price advantage of white (vannamei) shrimp over Black Tigers continues to erode as white pricing goes up while tiger pricing goes down. In fact, farm level pricing for black tigers in some countries is reportedly at a record low, and according to the Financial Express, some farmers are questioning whether to bother seeding their farms. Shrimp shipments to the United States during the first three months of 2008 totaled 123.8 million kilograms, a 2 percent drop from the same period last year. According to the regional trade advisor for the European Commission for Indonesia, U.S. trade officials have officially warned their Indonesian counterparts they must ensure shrimp isn't transshipped through Indonesia to avoid antidumping tariffs. The union group, the AFL-CIO American Center for International Labor Solidarity issued a report entitled “The True Cost of Shrimp” that alleges abuse of shrimp processing plant workers in Thailand and Bangladesh. Producers, especially those in Thailand, vehemently deny the accuracy of the report.

SALMON (frozen)
As an Infectious Salmon Anemia (ISA) outbreak in Chile has killed millions of salmon, production is down and plants continue to forecast higher prices and rougher times ahead. The New York Times ran an article last month about ISA, accusing the Chilean farmers of using antibiotics, but several weeks later the paper issued a “correction.” The stock market pricing for the main publicly traded salmon company was up on the news, and the salmon industry has called the article “nothing more than a smear attack against the industry.”

REMA FOODS IMPORT MARKET FLASH Apr 23, 2008

TRADE/POLITICS
In Washington, the Democratic leaders of the House Energy and Commerce Committee proposed various new regulations including mandatory country of origin labeling on produce, and a requirement that every food manufacturer identify on their corporate Web site where each ingredient in every particular food product originated. The Grocery Manufacturers Association replied: “At a time when thousands of Americans are being forced out of their homes and losing their job, it makes little sense for Congress to arbitrarily increase the price of food.”

It’s becoming repetitive, but new food pricing records continue to be broken - The Consumer Price Index shows food inflation at 5.2% in the first quarter of 2008, a 17 year high. Rampant food inflation and shortages even made the cover of the New York Times a few days ago with the headline: “Across the Globe: Empty Bellies Bring Rising Anger.” With basic foods such as soybeans and wheat rising in cost by as much as 100% over the past year, combined with the increased worldwide global demand, the U.N. states we are now in “the worst crisis of its kind in more than 30 years.” Don’t expect demand to soften: while the U.S. and Europe make up 5% and 12% of the world’s population, respectively, Asia countries (including India and China) with their newly emerging middle classes, make up 62%.

Lastly, the cost of oil has broken through $117 per barrel, directly impacting costs of manufacturing, ocean freight/transportation, fishing, etc and indirectly affecting costs of food crops now competing as bio-fuels. As expected the steamship lines are re-pricing ocean freight contracts with the popular Asia to U.S. route going up about $500/container, plus peak season surcharges and fuel surcharges/bunkers.

CURRENCY UPDATE
The US dollar hit another all time low against the euro this week, breaking through the symbolic 1.60 level. Beijing, signaling its focus on controlling increasing inflation (currently 9%), will allow further appreciation of the yuan. Last Thursday, the dollar broke through the symbolic 7 yuan to the dollar level, closing at 6.99. Just a few years ago, it was trading at 8.25. In the bank traded derivatives market, the “non-deliverable forward” for the yuan is trading at 6.4, meaning investors are already predicting another 9.2% gain against the dollar over the coming year. Inflationary pressures are mounting throughout Asia: Vietnam’s inflation rate is currently a staggering 19.4%.

TUNA
For skipjack, after reaching an all time high last year of 1650/mton, then dipping to a very short-lived low of about $1400 early this year, pricing has already passed $1600-1650 and is now anticipated by fisherman to go to $1700-1750 in the coming weeks. Fearful packers are trying to price their offers accordingly. Yellowfin pricing has increased to $2350 in the Far East, and $2750 in Spain. Tongol is trading thinly at 52 baht/kilo. Albacore, as predicted, has firmed to $2400 for Japanese long line raw material. With the catch weak, boats use more fuel to catch the same amount of fish, and with the higher cost of oil, fuel now accounts for more than half the cost of tuna fishing.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Even with the anti-dumping being repealed, the 2008 pineapple market is now expected be one of the most tumultuous on record – even worse than in 2007. Raw material is relatively firm at 6 baht/kilo, but the biggest problem facing canners is the shortage of tinplate. As a high acid fruit, pineapple production requires specially coated cans, which have put pineapple packers in the worst position of all the food manufacturers experiencing tinplate shortages. With strong pineapple demand from other overseas buyers, supply will be very tight and pricing extremely firm.

MUSHROOMS
In India, the situation remains status quo, although there appears to be signs of improvement on the horizon. Shipments are still coming slowly, but more regularly. China is almost finished with their crop and indications show that the cold spell that hit them early this year might not affect the crop as much as originally thought. While raw material prices were high right after Chinese New Year, they have since stabilized to a more realistic level - but currency and tinplate are negatively impacting costs.

MANDARIN ORANGES
Market is generally quiet with prices inching upwards due to the continued strengthening of the Chinese currency against the dollar.

TOMATOES
Flash shortages are developing in the US market on whole peeled tomatoes – unfortunately imports can’t help much before the new U.S. crop. Interestingly, while U.S. canners have run short for their home market customers, their exports of U.S. canned tomatoes from the U.S. to other markets grew in 2007 by 8% in volume and 24% in value, to their highest level on record. In Italy this past season, even with higher pricing, packers were able to maintain their export volume of canned tomatoes to the U.S. as buyers have come to appreciate the high quality.

FRUIT/PEACHES
California packers are expecting a good 2008 crop. Greece is optimistic about its crop as well, although it’s still too early to gauge competitiveness in dollar terms. Last year, the U.S. took only 8 mtons of Greece’s 296 mton crop. China has not yet reported on their crop, but they have lately become the major supplier to the U.S. import market. Poor prospects in South Africa have seen declines in export volumes for most fruit products – unfortunately with the weakness of the dollar, the U.S. doesn’t even make their list of top ten worldwide buyers anymore.

OLIVES
Argentina continues to struggle with a very poor new crop outlook – the result of their earlier severe frost.

ARTICHOKES
Spain has just completed its season, with much better yields than last year. FOB costs in euros are actually lower than last year; however, the exchange rate crisis has negated the decrease for U.S. customers. In Chile, one of the larger packers declared bankruptcy early this year, leaving few other players. It is reported that the total acreage planted this year will be decreased by almost 50%, primarily due to rising labor costs, tin plate costs, lower exchange rate and overall low profit margins. Opening FOB prices in Chile are about $ 6.00 higher than last year’s prices. In Peru, now the major player to the U.S. market, the crop is expected to be short. While the earthquake last year in the Southern part of the country caused labor shortages, very cold weather in Peru delayed the season considerably. Combined with 10% appreciation of the “sol” against the dollar, increased tinplate, labor and fertilizer costs have opening offers for Peruvian artichokes up several dollars over last year.

RICE
A worldwide rice shortage has pushed pricing upwards. Rice, the staple food for about 3 billion people, rose to a record high early this month after doubling in the past year. Higher imports by the Philippines, the biggest buyer, and reduced exports by China, India, Egypt and Vietnam pushed up prices, contributing to food riots in Ivory Coast and anti-hoarding campaigns in Pakistan and the Philippines. Expect sharp increases in the cost of imported rice varieties such as basmati and jasmine.

SAFFRON
With the market tight and new crop not available until the end of the year, farmers are pushing up prices by holding back stock.

REMA FOODS IMPORT MARKET FLASH Mar 27, 2008

TRADE/POLITICS
Simultaneous forces continue to hammer world markets: major weakness in the dollar, strong demand from emerging markets in Eastern Europe, India, China, etc, the move to biofuel production and skyrocketing agricultural commodity costs. Now, add two more to the list: Can costs and Ocean freight. Steel shortages are forcing cost increases of 20-25% in can tinplate costs. Large monopolies control much of the world’s can making, leaving little alternatives for packers worldwide. With oil over $100/barrel, steamship lines are planning significant increases in ocean freight rates (as in fuel surcharges in domestic trucking as well). The current proposed increase from the 15 major TSA (Transpacific Stabilization Agreement) carriers is $600/40’ fcl, plus $400 peak season charge, plus a “floating” bunker fuel surcharge.

The U.S. Food and Drug Administration last week announced it had received approval from the U.S. State Department to permanently establish eight full-time positions in China, pending approval from the Chinese government.

As predicted in the previous market flash, Congress approved the Andean Trade Preferences Act (ATPA) extension and the President signed it into law. Note the extension is short term – only until December 31, 2008.

CURRENCY UPDATE
As the Federal Reserve continues to lower interest rates in an effort to boost the economy, U.S. bond investments remain less attractive to foreigners, thus cutting the demand for dollars. As rates and confidence in the U.S. economy fall, so does the dollar, which again this month dipped to new record lows against the euro and most other world currencies. Keep in mind, every 1% change in the dollar forces a full 1% change in the price of many imports, so weakness in the dollar of several percent each month is having a dramatic effect on the costs of most imported goods. The Thai baht has gained about 14.08 % vs. January 2007; the Chinese RMB has gained 8.8% over the last 12 months. Amazingly, against the euro, the dollar was 85% stronger in 2001 than it is today.

TUNA
After dipping last month to $1420-1450/mton, skipjack raw material costs have climbed again to the $1530-1550 level. Catching in the Western Pacific is only moderate for Japanese boats and poor for Taiwanese, Korean and US fleets. Yellowfin remains firm at $2300/mton. Tongol is tight at 52 baht/kilo, and albacore pricing in on the move, up to $2350/mton, from $2300 last month. Official figures show overall Thai tuna exports declined 16% from 559,414 mtons in 2006 to 467,957 mtons in 2007. The U.S. remains the largest importer, but saw imports decline by the same 16% year to year. With consumption down, the domestic canneries are also having a tough time: StarKist is still on the auction block, while the parent company of Bumble Bee just announced their 2007 processed meat recall costs topped $100 million, causing the value of the company’s stock to fall by 50% over the past few months.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Good news and bad news in the pineapple market. The good news is that the Department of Commerce has finally issued a preliminary determination to revoke the antidumping duty order on canned pineapple from Thailand since Maui Pineapple has stopped production, leaving no domestic canned pineapple. Maui has submitted a letter indicating it has no objection to the review or revocation of the order. Commerce is expected to announce its final determination within 45 days. The bad news is that at this moment there’s not much pineapple or tropical fruit to ship. While raw material cost was just beginning to ease with hopes of a good summer crop, poor yields have driven up costs and limited availability to the point that some of the leading national brands have withdrawn from various markets. Coupled with the substantial tinplate cost increases and the weakening of the dollar against the far east currencies, large packers are now withdrawn, expecting to reoffer later at even higher levels than last year. Worldwide demand is also up: Russia in the last 3 years has increased its imports from Thailand by about 75%, and because of the weak dollar, they can afford to pay the packers a much higher price.

MUSHROOMS
The real effects of the snowstorm/freeze that hit China last month is not being openly disclosed by most Chinese packers. However, shipments seem to be trickling in. In India there’s only one major packer remaining, facing strong worldwide demand and still recovering from production difficulties last year. India’s ministry of agriculture, seeing “huge potential for mushroom cultivation,” has initiated two programs to promote production. These are however long-term initiatives that won’t bring much relief this year. Holland may have some improvement in their supply situation; however, the current euro/dollar exchange rate makes the Dutch prices totally uncompetitive.

TOMATOES
With Chile’s tomato crop ending next week with about 500,000 mtons as compared to 670,000 mtons last season, the processors there are basically sold out and only shipping long-standing customers.

OLIVE OILS
Olive oil production for the current 2007/08 season from the major production countries is now estimated as follows:
Spain: 1275 mtons
Italy: 450
Greece: 375
Portugal: 35

WATER CHESTNUTS
There seems to be a conflicting report about the real situation on this item. On one hand, there is a reported shortage of the product that was brought about by the cold weather in China. On the other hand, there are reports that supply is available and most packers are artificially inflating prices by holding on to their stocks. The situation should be clearer in a few weeks.

PEPPERS and JALAPENOS
Peru is experiencing severe rains/flooding. Along with recent 12% appreciation of their currency (the sol) against the dollar, some packers are now attempting to renegotiate outstanding contracts.

CBOT Soybean Oil Weekly Averages (2006-2008)

REMA FOODS IMPORT MARKET FLASH Feb 28, 2008

TRADE/POLITICS
FDA is considering opening satellite offices in U.S. embassies overseas as part of its effort to improve the safety of food, medicine and other products exported to the U.S. The agency's commissioner, Dr. Andrew von Eschenbach, noted five regions where FDA inspectors and technical advisers could be staffed: China, India, Europe, Central and South America, and the Middle East. To quote the commissioner, FDA will have “boots on the ground” overseas.

With the Andean Trade Preferences Act (ATPA) set to expire at midnight on February 29, the House of Representatives yesterday approved a 10-month extension. In the Senate however, a positive vote is still not a sure thing as a “super majority” is needed (60 votes) and some Senators are vehemently opposed to Bolivia and Ecuador’s inclusion. ATPA affects imports from Bolivia, Colombia, Ecuador and Peru (although Peru is also covered by their Free Trade Agreement with the U.S.). Hopefully the Senate approves the bill today or tomorrow so the President can sign it into law before expiration.

CURRENCY UPDATE
The dollar has crashed again - this time to 151.3 against the euro – an all time record low, and a 5% drop since December. The inflationary pressure of the record weak dollar is complicating Federal Reserve Chairman Ben Bernanke’s management of the economy, as was evident in his Congressional hearing yesterday.

TUNA
With Chinese New Year coming to an end and fishing boats returning to the sea, skipjack raw material is trading down a bit to $1450/mton (isn’t it amazing that $1450 is actually starting to sound good). Fishing in the Western Pacific, which represents 50% of the world catch, has started to improve while the Indian Ocean catch is still poor. Albacore is steady at about $2300/mton. Interestingly, the high price of light tuna coupled with the relatively low price of albacore has affected imports just as one would expect: for 2007, imported canned light tuna tonnage was down 9.6%, while canned albacore imports were up 12.8%. The retail market in general remains in disarray with the brands battling for market share as Del Monte tries to sell its StarKist division.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
In a sign of the changing pineapple industry, after the two remaining pineapple canneries in South Africa merged last year, they’ve now officially stopped producing pineapple and/or juice. In the Far East, packers are still hoping for an improved summer crop, after a disappointing winter season.

MUSHROOMS
Just a few weeks ago, all the stars seemed aligned for an excellent Chinese mushroom crop. Now, after a devastating freeze has hit the southern part of China, packers believe output may actually fall 30%. Packers are withdrawn; a better picture of the situation should be apparent by mid March.

PEACHES
Chinese peach exports to the US more than doubled in 2007, growing from 20,390 to 46,876 mtons (and this is up from only 8,633 mtons just a few years ago). Chinese exports to Thailand increased eleven-fold, with almost all those peaches going towards plastic fruit cup production – which ultimately heads mainly to the U.S. Overall Chinese peach exports worldwide increased from 92,529 mton in 2006 to 148,473 in 2007. In the U.S., the International Trade Commission released a report finding that, based on market share analysis, the domestic U.S. deciduous canning industry is losing its edge to international producers.

ASPARAGUS
Pricing in both China and Peru is up considerably with new pack, while strong demand continues to boost trade. Peruvian packers have increased their total exports over the past few years from 35,867 to 50,628 mtons, while exports to the U.S. more than doubled in that same period. By contrast, exports from the U.S. are down to only 459 tons last year, compared to 3,660 tons ten years ago.

TOMATOES
In California, processors are offering farmers 11% more for their tomatoes ($70 vs $63/ton), but farmers complaining about water restrictions say it’s too little, too late. In China, figures are in for 2007, and China has claimed the crown of the world’s largest exporter of tomato paste at 850,285 mtons, an increase of 34% from 2006. Production is expected to increase 10% in 2008.

OLIVE OIL
The dash to find alternative fuel sources has severely affected the oil market and Canola & Soybean pricing remains on fire. In Europe, market for olive oil is uncertain with some rumors speculating that Spain has ended up with a shorter than expected crop: 1.1 million tons vs.1.35 originally projected. Pomace continues to tighten, as more efficient refineries continue to leave less oil byproduct needed for pomace production.

ARTICHOKES
An extremely hot summer in Peru is hurting the upcoming harvest in the Southern part of the country. On the other hand, Spain is reporting a better than normal crop with good fruit quality; however, the euro/dollar exchange rate is negating any possible price advantage for Spain. Other emerging sources of artichokes to be watched this year: China, Morocco and even Egypt

SAFFRON
After prices tripled a year ago, packers were pleasantly surprised to see sales hold up throughout the year.

CBOT Soybean Oil Weekly Averages (2006-2008)

CBOT Soybean Oil Monthly Averages (2002-2007)

U.S. dollar vs euro

U.S. dollar vs Thai baht

U.S. dollar vs Chinese yuan

U.S. dollar vs Canadian dollar

REMA FOODS IMPORT MARKET FLASH Jan 14, 2008

TRADE/POLITICS
According to a feature article in The Economist, food prices have risen by 75% since 2005, after having fallen dramatically over the past 25 years. According to the article, it’s been more than 160 years since prices on food products have risen so substantially. In addition to biofuel production, an increasing global population and higher rates of income worldwide are exerting inflationary pressure on food products.

The U.S. and China signed an agreement calling for a greater American role in certifying and inspecting Chinese food products, including the presence of American officials at Chinese plants. The pilot project includes mushrooms, olives and farm-raised fish.

As oil hits $100/barrel, steamship lines are implementing “Emergency Bunker Surcharges,” generally raising ocean freight rates worldwide by $50-200 per container.

CURRENCY UPDATE
Above are four graphs of the U.S. dollar plotted against the euro, Chinese yuan, Thai baht and Canadian dollar. The euro graph covers the past two years, and shows the dramatic decline in the dollar of almost 20%. While most everyone is familiar with the situation of the euro, the other three graphs show some changes that many overlook. The graph of the Chinese yuan runs for the past 5 years and shows a perfectly stable currency until mid 2005, after which there has been a drop in the value of the dollar of about 12% - and the rate of decline has increased over the past few months. The graph of the Thai baht similarly shows stability for many years, but a fall in the dollar’s value of 29% over the past 2 years. Even against the Canadian version, the U.S. dollar has fallen by about 15% over just the past year alone.

The decline in the value of the dollar has raised the cost of imported product. How much impact is felt in the market is generally a function of the extent of the decline, and also longer term competitive issues. For example, if an item is always imported (such as Spanish Green Olives), there will be a more direct impact between currency and price. If there are competitive items from other countries that can substitute, then there could be less of an increase (for example, ripe olives, imported peaches, or for that matter imported Hondas which need to compete with domestic olives, peaches and cars).

TUNA
After a month of stability, raw material costs are again firming. Skipjack is trading at $1550-1580/mton, up from $1450. Yellowfin is at $2150-2200, up from $2100. Albacore is at $2350, up from $2250
Tongol, which is a local fish of Thailand, Indonesia and Vietnam is now off-season. Philippine packers are complaining that their exports to the U.S. have fallen to the lowest volume in six years. The single duty for 2008 is estimated to have been filled in a matter of seconds, continuing the trend of the past few years.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Raw material situation has improved over the last few months but demand remains strong and market is tight with packers still facing backlogs. China, initially thought to be a viable option to cover some of the shortfall of the traditional sources (e.g. Thailand, Indonesia, Malaysia, etc), fell short of its expected export volume. Thailand is expecting a total crop of 1.8 million mtons, compared to 2.4mm last year. Significant improvement is not expected until the middle of the year.

MUSHROOMS
China has begun the first cycle of their harvest season; while the initial weeks were good, the last few weeks have reportedly slowed down. The next round in the harvest is not expected until after the Chinese New Year (mid February). India is still shipping slowly and remains bogged down by compost issues.

TOMATOES
In a telling sign of the condition of the Italian tomato harvest, the USDA reports that in the second half of September 15,000 tons of tomato paste was shipped from California to Italy and further tonnage is being negotiated. In addition, forthcoming subsidy changes (Common Agricultural policy reform) are pushing Italian farmers to cut acreage. In China, the tomato crop is estimated at 4.6 million metric tons for 2007, just behind the U.S. according to the World Processing Tomato Council. About half of China's output of tomato products emanate from a single company - Cofco Xinjiang Tunhe. The company supplies bulk paste to H.J. Heinz Co., and Unilever NV and may be "ripe for picking" itself according to a report in The Wall Street Journal.

MANDARIN ORANGES
As previously reported, prices are up slightly from last year due to continuing labor shortage in the major fruit producing regions and the stronger Chinese yuan. Fruit quality is good.

OLIVE OIL
Even with a decent olive crop, prices for olive oil have firmed considerably over the past two months, primarily because of the strong euro vs the dollar. In addition, large Spanish cooperatives are rumored to be strategically holding off selling with the goal of pushing up prices. On the domestic oil front, crude soybean and canola oil prices have been hitting all time highs, translating into higher prices for blended oils. Above is a graph of the soybean futures market plotted for each year from 2002 through 2007. The recent dramatic rise is displayed by the yellow line on the graph.

ARTICHOKES
Chile has reportedly suffered a 20% decrease in production due to unusually cold weather during the harvest. Peru is also running a bit late because of weather conditions.

BABY CORN
The winter crop is ending and the summer crop which lasts from Feb to June in beginning. Crop is normal however prices are on an uptrend due to rising fuel and fertilizer costs, and the tumbling dollar against the Thai baht.

SAFFRON
With the crop now complete, Spanish saffron packers have withdrawn their earlier predictions for a price decline. While the crop is reportedly better than last year, the strong euro coupled with strong demand is keeping the price steady. In addition, a number of non-traditional export markets (such as Dubai, Bahrain and the other Emirates) have emerged keeping demand strong.

KALAMATA OLIVES
The crop is reported to be average; however, lack of carry-over stock and the weak dollar have firmed prices.

FRUIT
Chinese exports continue to grow – last year by 28% over 2006. The U.S. remains the largest importer of Chinese fruits.

CITRUS/GRAPEFRUIT SEGMENTS (GFS)
Florida is expecting orange and grapefruit production to fall significantly over the next decade. For grapefruit, the chief economist at the FDOC projects that Florida production will fall long term from 25 million boxes last year to 13 million boxes by 2017. Israel on the other hand is expecting a larger crop this season.

REMA FOODS IMPORT MARKET FLASH Nov 25, 2007

TRADE/POLITICS
On Nov 8, the U.S. House of Representatives passed the US-Peru Trade Promotion Agreement (TPA) by a wide margin, with 109 Democrats joining 176 Republicans voting in favor of the deal. Senate approval is expected any day now.

The recommended action plan presented on Nov 7th to President Bush proposes many new stringent import requirements, including mandatory certification by foreign governments or accredited third parties, a “Good Importer Program”, increased penalties and bond amounts including forfeiture of assets and proceeds, and increased FDA presence overseas.

On Nov 19, in a rare move, the U.S. ITC ruled against the domestic U.S. paper industry’s request for protection from imports and threw out the antidumping duties on Chinese paper that had been authorized by the Bush administration earlier this year. Along with the repeal of the Byrd amendment last year, maybe the tide is finally turning on antidumping actions.

CURRENCY UPDATE
The once almighty dollar continues to lose strength against virtually all major currencies, hitting another record low against the euro this month after losing an unbelievable 70% over the past few years. Even the state-controlled Chinese Yuan gained almost 3.5% against the dollar over the past 6 months ago. The Indian Rupee now exchanges 39.18 to a dollar vs. 44.21 in the beginning of the year. The Thai Baht is now at 31.57 vs 35.2587 in the beginning of the year. The situation is getting so bad that even European Central Bank President Trichet described the euro’s recent ascent as “brutal” and not welcome. Just keep one thing in mind – when the market appears to have no place to go but one direction, it often does just the opposite (think housing prices, tech stocks, etc). I wouldn’t be surprised to see a firmer dollar a year from now vs the euro, though probably not against the Asian currencies.

TUNA
The tuna market has been relatively stable lately. Catching has been extremely poor in the Indian Ocean esp. for French / Spanish fleets (average catch per boat of less than 10mt/day). In contrast, catching in the Western Pacific and Maldives is better (30mt/day). Generally, flow has been scarce, with packers bidding $1400/mton and large fish suppliers offering about $1450/mton. Yellowfin is steady at $2100/mton. Tongol remains very scarce as monsoons are hitting the local fishing grounds. Albacore, still trading at very low price levels ($2250/mton), represents the current bargain of the tuna world, but is expected to firm soon.

In order to prevent widespread catching of small or juvenile tuna that would cause the collapse of tuna stocks, the Philippines’ Bureau of Fisheries and Aquatic Resources has recently proposed a minimum mesh size of three inches on nets used to catch tuna, and making it illegal to trade in small tuna.

The best way to summarize the tuna market of 2007 would be the “perfect storm.” Concurrently, we suffered through: (1) El Nino caused fish to disappear (they swim deeper because of water temperature changes), (2) Currency: significant devaluation in the dollar vs most overseas currencies including the Thai Baht, (3) Tremendous increase in the single largest cost in fishing: fuel for the fishing boats, and (4) Growing worldwide demand from emerging economies (Russia, etc).

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Market remains firm with winter crop pineapple raw material trading over 6.50 baht/kilo. Supply of choice product is especially limited. The auctioning off of Maui pineapple’s canning machinery ended with one of the largest Thai packers buying much of the equipment. Tropical fruit availability should improve over the next few months, but backlogs are lengthy.

MANDARIN ORANGES
The 2007/2008 crop is in progress with no major setbacks. It is still reported to be a normal crop. However, while raw material remains relatively unchanged vs. last year, this year's pricing should be slightly higher due to the RMB's appreciation against the dollar and the rising costs of tinplate and labor in China.

MUSHROOMS
Chinese mushroom season started about two weeks ago and early indications are that the crop will be better than last year's very short crop. However, the current U.S. antidumping suit has left only two to three packers that can ship to the U.S. India is also reporting an improvement in their production as they have hopefully overcome the compost issues that cut production in 2007. With the market quite empty though, it will be a while before the demand/supply equation can be balanced. While long term prospects are brightening, there is still no immediate short term relief in site in terms of the tight supply situation, and new anti-dumping rulings remain an unpredictable wildcard.

KALAMATA OLIVES
Greece is reporting a normal crop so far - the crop is still underway. New crop pricing will be more definite around early December. Turkish kalamata-style on the other hand, has been affected by drought. Combined with the weakening of the dollar against the Turkish lira, prices are expected to increase about 15-20%

TOMATOES
In a significant showing of the poor prospects for the Italian tomato crop this year, Italy has emerged as the world’s single largest importer of Chinese tomato paste, as YTD imports there have doubled in 2007 (to 75,409 mtons) compared to 2006.

PEACHES, FRUIT COCKTAIL/MIX (California style)
As the Southern Hemisphere heads toward their summer season, Argentina is reporting a frost in the San Juan and Mendoza regions, while Australia is facing a significant water shortage where drought has forced many growers to pull trees.

OLIVES
The Spanish olive crop is shaping up as follows: Manzanillas – good total volume of about 198,000 mtons expected, but with a lot of sub-prime goods because of increased use of mechanical harvesting. Queens – volume expected to come in 16% below last year, at 22,000 mtons, with pricing to the farmers significantly higher. Hojiblanca (primarily used for ripe) – volume will be higher than last year, but fruit calibration (sizing) smaller. Hoji pricing paid to farmers in euros is lower than last year. However, the dollar has weakened about 15% since the start of the last crop, so dollar pricing will be higher on all varieties. In Argentina, the southern hemisphere crop is still months off, but a severe frost has packers predicting yield will decline about 30/40% compared to last year, but sizing should be larger.

OLIVE OIL
The last few weeks has seen some firming in the market. Most packers feel that this is an artificial increase and is not reflective of the new crop which is projected to be good.

REMA FOODS IMPORT MARKET FLASH Oct 29, 2007

TRADE/POLITICS
Right now, there’s Senate legislation dealing with food imports and a newly introduced bill in the house targeting food imports. Several committees within the House have held hearings recently to discuss this issue. A cabinet-level panel created in July by the president has issued a preliminary report and is expected to release a final report in November. The major provisions of the bill introduced in the House by John Dingell are: (1) Substantial “per-line-item” import inspection fees, (2) A requirement of FDA certification that the food importer has demonstrated that each item of food was produced under standards that meet or exceed U.S. standards, (3) A requirement for inspection of foreign establishments and certification of those establishments, and (4) Authority to suspend the ability of a food establishment to operate; civil penalties of $10,000 per violation.

CURRENCY UPDATE
More bad news, as the dollar hit another all time low against the euro last week.

TUNA
Several weeks ago, the high skipjack price finally broke, with improved fishing in both the Western Pacific and the Indian Ocean pushing raw material costs down into the $1400 range. Unfortunately, within a week fishing turned poor again and fishermen were back over $1500 in no time at all. Yellowfin remains firm at about $2125 and is currently only 3% of the light tuna catching reaching Bangkok (vs 20% usually). Albacore is steady at $2325 while Tongol, which is locally caught in Thailand and Indonesia, is mostly unavailable.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Pineapple raw material is trading at Thai Baht 5.70-6.00/kilo as the winter crop now begins. Overall, first half 2007 statistics are showing significantly less pineapple being exported from the major supplying countries. Thailand is expecting 20% less tonnage than last season, and after the damage inflicted by the floods early in 2007, the plantations are expected to recover only towards the middle of next year (barring any aberrant weather). Suffering from El Nino in the end of 2006, Indonesia saw their exports plummet by 57% for the Jan-May period as compared to last year. China, on the other hand, saw exports rise 51% to their main export market, Russia. Chinese quality is definitely improving, but consistency is still not at the levels required by most brands in the U.S. market. Overall, increased demand from Eastern European countries (with less stringent quality requirements) is affecting the total quantities available to the more traditional markets for this commodity such as the US. Tropical fruits remain tight, but here again China is significantly boosting production, but TFS quality still lags significantly behind Thailand. In the U.S., Maui pineapple is finally auctioning off their canning machinery and tinplate this week.

MANDARIN ORANGES
Chinese crop is just starting and actual yields are still to be determined. While Typhoon Wipha hit some of the major growing areas in China, initial reports still indicate a good crop is in store for 2007/2008. New crop opening prices, which should be announced very soon, are expected to be up this year primarily because of the weaker U.S. dollar vs the Chinese RMB (7.5% compared to last year) and tight labor and tinplate in China’s booming economy.

MUSHROOMS
The prohibitive anti-dumping duties imposed on numerous packers have severely limited the factories that are able to export to the United States. For this season, in China, there are 3 factories (with one of them reported to be having serious financial difficulties); in India there’s only one significant player. The prospects of this year’s crop from China will be clearer in about two weeks as harvesting is scheduled to begin early November. Interestingly, even in this tight market with firm pricing, Chinese exports to the U.S. are actually up compared to last year, but poor U.S. production has increased demand here, while demand in Eastern Europe is absolutely exploding. India continues to ship slowly and is saddled with many back orders as compost issues shortened production months ago just as demand increased. The majority of India’s production goes to the U.S. market. Generally, because of the uncertainty in supply, exporters everywhere are selling for relatively prompt shipments only.

PEPPERS
Expectations for a disastrous sweet pepper crop in Turkey are coming true, as drought has cut the crop by over 50% compared to last season. There’s virtually no rain, while the Turkish government has diverted most water allocated to the fields to instead go to residential homes. With Spain out-priced, Turkey had become the dominant source for U.S. imports of roasted pepper products, so the current issues will firm the market significantly. South America is developing increased production capabilities, which should bring increased stability in the future, but their crops are not developed enough yet to make a significant dent in this year’s demand.

TOMATOES
Italy’s crop is coming in with quantities about 20% less than contracted. Coupled with the weak dollar vs the euro, outlook is not pretty for Italian tomato pricing for the new season.

BALSAMIC VINEGAR
The extreme heat last summer affected the grape crop. Hence, the price of grape “must”, the primary ingredient in balsamic vinegar, has been increasing. This, coupled with the continued gain on the euro against the dollar, points to increasing balsamic vinegar prices down the road.

SAFFRON
The crop has started about 2 weeks ago, opening at a very high level (about 20% higher than last year). However, as steady raw material came in, prices have settled to lower levels. It is hoped that prices will decrease this year after the tremendous run-up last season.

MUSTARD
Mustard seeds, which are grown primarily in Canada, are very short. The acreage was drastically reduced by about 40 % as most of the fields were diverted to “Colza”. Colza is now being widely grown for bio-fuel applications. Alternate sources of mustard seeds are now being developed.

Dollar vs Euro

REMA FOODS IMPORT MARKET FLASH Sept 16, 2007

TRADE/POLITICS
The past month has seen more than its share of natural disasters: In PERU, the recent 7.9 magnitude earthquake reportedly did not affect the major crops, however, some shipments have been delayed as affected factory workers deal with rebuilding their homes. In GREECE, fires are ravaging, but the fires are in the South, while Kalamata production is in the north and should be unaffected. In INDONESIA, an 8.4 magnitude earthquake struck last week, but so far so no major repercussions have been felt in the tuna or pineapple markets (markets that are already very tight).

Ocean freight - A General Rate Increase (GRI) from European Ports to the US was just announced, becoming effective October 1, 2007. Freight increases range from $400 to $750 per 20’ container.

CURRENCY UPDATE
Bad news in the currency markets as the dollar sank further, bottoming at the record all-time low against the euro. A graph of the past 30 days can be found above.

TUNA
It’s hoped that the skipjack market may have peaked, with skipjack in the $1500-1575/mton range after trading over $1600 last month. Indian Ocean fishing, which should be seasonally strong right now, is weaker than expected. With the market short and most of the Far East cold storage warehouses empty, fisherman are holding back as much as possible to keep their record high pricing intact. With demand strong in Ecuador, and skipjack trading there at $1625/mton, all surplus raw material is going there (especially the Western Pacific catch). Official figures were just released by the Indian Ocean Tuna Commission showing that Jan-Apr 2007 Indian Ocean catch was the worst in 11 years. Yellowfin remains firm at about $2125, with albacore steady at $2325. Tongol, which is locally caught in Thailand and Indonesia, is still very tight but now going into season.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
Ramadan has begun and is causing even more delays in production. Raw material situation continues to be very tight. The leading US brand recently wrote to the trade: “Pineapple and Papaya supplies are tight due to heavy rains slowing the growing and harvesting of fruit. Fruit costs are increasing against limited supplies and steadily increasing worldwide demand.” They don’t expect increased capacity until 2008.

FRUIT COCKTAIL/MIX (California style)
Imported product is still available to cover the current shortfall of domestic U.S. production.

PEACHES
In Greece, while the total peach crop has come in at almost 500,000 mtons (the best in six years), only 285,000 mtons went to canning, with canned output falling compared to last season. The cause of the drop in canned product is an increase in puree production as several plants built new puree lines this year, along with a concentration by the industry on packing more high choice product. China had an average crop, with new crop pricing up slightly due to currency and input cost increases. In California, growers are experiencing the best yield/acre in seven years.

MUSHROOMS
In China, the crop is still a few months away and it’s too early to make any accurate predictions.

OLIVES
So far, the weather in Spain has been cooperating with mild temperatures and adequate rainfall. Prices have not been published as of yet, but harvesting is expected to commence next week. Packers are reporting a good crop on some varieties, especially ripe/hoji olives and to a lesser extant, manzanillas. Outlook on queens (large green olives) however is worse than last year. Continued weakness of the dollar against the euro is also certain to influence pricing. California's 2007 olive crop forecast is currently estimated at 110 thousand tons, but with no carryover from last year's crop, packers there are predicting strong prices for the 2007 crop.

OLIVE OIL
Prices have been firming over the past couple of weeks mainly because of the euro/dollar exchange rate. For the new season shipping early next year, the crop prediction remains good. Current crop forecasts are as follows:
• Italy: 450.000 tons
• Spain: 1.250.000 tons
• Greece: 300.000 tons
• Syria: 110.000 tons
• Tunisia: 250.000 tons
• Turkey: 90.000 tons
• Morocco: 60.000 tons
Total is 2.510.000 mtons plus a carryover of 100.000 mtons = 2.610.000 mtons total availability. Production should be substantial, but growth in consumption has been very strong, especially from non-traditional markets such as China, Japan, Korea, and the Middle East. This and the currency could have a defining impact on final pricing.

KALAMATA OLIVES
As the kalamata stocks dwindle down, pricing is trending upwards. New crop is expected to be average. Pricing indications should be available next month

SNAILS
The extreme heat last summer and dry weather in April, followed by cold weather in May has affected the lowest level in the mollusk family - achatine snails were virtually unavailable until about 2-3 weeks ago. The Helix and Burgundy snail harvest is 50% less plentiful than last year.

PEPPERS
Spain, Greece and Turkey are experiencing poor pepper crops (affecting all peppers including pepperoncini).

TOMATOES
Italy is still expecting a worse crop than last year, while California is expecting a huge crop with the National Agricultural Statistics Service estimating contracted production at 12.0 million tons, up 20% from last season, and possibly the best crop since 1999.

PEARS
Chinese crop is reportedly similar to last year, while California is reporting a good crop this year with Bartlett pears estimated up by 11% from last year and other pear varieties running at 5% above last year.

KERNEL CORN
According to the USDA, sweet corn production in the USA is down 7% compared to last year. With the European market closed to Thailand because of a recent antidumping ruling, Asian packers may soon be able to make inroads into the US market.

REMA FOODS IMPORT MARKET FLASH Aug 26, 2007

TRADE/POLITICS
After several high profile issues, the Chinese government appointed Vice Price Minister Wu Ti to head a cabinet level committee to improve food safety. After her predecessor was executed several months ago, one would expect serious action and it appears this is happening. Food packers are reporting that CIQ (the Chinese “FDA”) is now requiring mandatory inspection for every export shipment destined for the U.S.

A West Coast (LA) port strike was narrowly averted when the port management and the unions reached a last minute agreement on July 26th.

CURRENCY UPDATE
Given the current instability in the financial markets, the currency markets have been relatively calm of late – after severe weakening of the dollar earlier this year.

TUNA
At this moment, there’s still no relief in sight for light tuna, as raw material costs continue to break through old record highs. Skipjack has reportedly been sold to a cannery in Thailand for $1675/mton, up 75% from $950 at the start of this year. Many factories are shut or running at minimal capacity for lack of fish. Virtually all packers are behind on contracts. While light tunas have firmed, albacore has come down in price since last year. For maybe the first time in history, yellowfin and albacore (white tuna) raw materials are now trading at almost the same price – about $2200 of YF, $2350 on albacore – making white tuna an excellent value at this moment. Indonesia suffered an earthquake a few weeks ago, but so far fishing has not been materially affected.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
No major change from last month; situation is still very tight. Overseas plants are running at partial capacity, due to lack of raw material, and are behind on contracts. With Maui Pineapple ceasing production of canned pineapple as of June 30, The Thai Food Processors’ Association filed a request for a changed circumstances review of the antidumping duty order on canned pineapple because there is no more domestic canned pineapple. The petition asks the Department of Commerce to revoke the antidumping duty order. Chinese plants have almost universally oversold their limited production and shipments are few and far between from China. In South Africa, the last two remaining packers, Summerpride and Collondale, are planning to merge and possibly move their new factory about 100 miles to be closer to the pineapple fields.

FRUIT COCKTAIL/MIX (California style)
Imported product is still available to cover the current 2006 shortfall of domestic U.S. production.

PEACHES
California is reporting a good crop with the highest yields seen since 2000 (17.3 tons/acre). As of now, the only possible problem this year might be undersized fruit. Both Greece and China are on track for good/normal crops – better assessments should be available next month.

MUSHROOMS
Final duty determinations for mushrooms have been published: the largest Chinese factory was slapped with a 19.02 % anti-dumping duty rate. A couple of smaller Chinese packers were given a 0% duty rate, which bodes well for the new season beginning in Dec/Jan. The general China rate for companies not individually reviewed is set at 198.63%. India’s major exporter also achieved a 0% duty rate, but has been hampered by low compost output. Supply remains tight as packers try to keep up with very heavy worldwide demand.

OLIVE OIL and RIPE/GREEN OLIVES
While still early, initial indications point to a good crop for most Spanish olives, with the exception of Queens. For Queen olives (large green), the crop will be shorter than last year and in some areas they will not collect even the 50% of the amount harvested last year. For Manzanilla (usually used for small green) and Hojiblancas (most commonly used for ripe olives and olive oil), the crop will be slightly bigger than last year, but not as big as was anticipated two months ago. Because it appears that the olive fat yield will be higher than last year, it’s believed more olives may go for oil production, rather than table olives.

PEPPERS
Turkish crop is unusually delayed due to drought – water is currently being rationed to consumers leaving very little to almost nothing for farm irrigation. Crop volume is expected to come in at only half of preseason estimates. Spain is faced with an almost 30% increase in raw material cost due to the high demand in the fresh market. China is experimenting with pepper production but available volume is not yet significant.

TOMATOES
In Italy, high end-July temperatures have left estimates for the new season pointing to a smaller crop than was predicted just weeks ago. Yields are running at 60 mtons/ha, compared to 67 normally. Total crop is expected to come in at about 3.8 - 4.2 million mtons. It’s said that packers are already paying farmers higher prices (75 euro/mton) than originally contracted (60 euro/mton). Situation is even worse for Sundried tomatoes: extreme heat and drought conditions have contributed to an increase in raw material pricing by about 30-40%. With regard to tomato paste production, the U.S. crop is doing well - yields are above expectations and the crop is predicted to come in at 11-12 million tons.

KERNEL CORN
Thai packers have traditionally found little success selling their kernel corn in the U.S. However, with the European market closed to Thailand via the recent antidumping ruling, a large European packer (Bonduelle) acquiring a large North American exporter (Aliments Carriere in Canada), and the growing U.S. demand for corn derived ethanol may point to increased future interest in the U.S. market for imported kernel corn.

ANCHOVIES
Morocco is experiencing good fishing this season after several years of dwindling catches.

SAFFRON
Market remains firm after experiencing significant price increases earlier in the year. The new season doesn’t begin until the end of the year.

Dollar vs Thai Baht

Dollar vs Indian Rupee

Dollar vs Euro

REMA FOODS IMPORT MARKET FLASH July 22, 2007

TRADE/POLITICS
An eight-month extension was granted for the Andean Trade Preferences Act (ATPA) affecting Bolivia, Colombia, Ecuador and Peru. Most important for canned food imports is Peru, which can now continue shipping duty-free artichokes and asparagus to the U.S. Before this temporary extension expires, it is widely expected that the official Peruvian Free Trade Agreement (FTA) will be finalized and signed into law, making the duty free treatment permanent.

President Bush last week established a high level government panel to recommend steps to guarantee the safety of food and other products imported into the U.S. In addition, Senate Majority Whip Richard Durbin (IL) introduced a bill in the Senate aiming to (1) collect user fees for imports, (2) dedicate part of these funds to research on contaminant resting technologies and (3) require FDA to establish an Imported Food Certification Program.

FDA this month put all farm-raised catfish, basa, shrimp, dace, and eel from China on automatic detention, meaning all containers are FDA released for sale in the U.S. only after lab testing proves their safety. Ironically, the order means the Chinese seafood will be among safest in the marketplace as it will undergo 100%, rather than random, testing.

On July 9, the International Herald Tribune published a front page lead article entitled “In China’s safety woes, echoes of U.S. history – Scandals brought shame, then reform.” It appears the Chinese government is starting to crack down, with CIQ (“Chinese FDA”) instituting stricter controls and imposing more stringent testing on export shipments. Large importers and Chinese producers generally applaud the moves as serious importers and exporters already have many such controls in place and value a safe supply chain. In the headlines recently was an article about China shutting down 180 substandard plants – it should be noted that not a single one of those facilities had more than 10 employees nor a license to export to the U.S.

CURRENCY UPDATE
The dollar has again weakened significantly against most world currencies, with the loss in value accelerating over the past few weeks. Over the past few months, the dollar has weakened 7% against the euro, 10% against the Indian rupee, and 15% against the Thai baht. In fact, against the baht, the dollar plunged an unbelievable 10% in just the past 30 days. Graphs of the dollar vs these three currencies can be found on this site above this report.

TUNA
Catching remains poor in all three catching areas (Maldives, Western and Indian Ocean). Skipjack price continues to climb, hitting $1475/mton in Thailand and $1560 in Ecuador/Mexico. Several large Thai plants have been idled for lack of raw material. Packers are starting to throw around talk of $1600/mton on skipjack in the very near future. Near term, there’s no relief in sight as Ecuador's territorial waters will be closed for 1.5 months starting in August, forcing packers there to get their tuna supplies from the Western Pacific – in direct competition with Far East packers. With limited stocks and closed factories, fisherman are playing cat-and-mouse with the factories, trying to extract maximum value from the plants that most need raw material. Yellowfin is virtually unavailable with all supplies going to Europe at prices higher than albacore. Tongol is also firm due to heavy monsoons in Indonesia. Albacore remains steady at $2300/mt, but could start to climb soon. In Europe, strong demand immediately filled the single duty quota which opens on July 1 each year - it was oversubscribed and filled on the first day.

PINEAPPLE and TROPICAL FRUIT SALAD (TFS)
10% free-fall in the value of the dollar against the Thai baht (-15% over the past few months) is further pushing up pineapple pricing. Thailand is in between seasons - crop was short and the overall worldwide demand has gone up due to increased popularity of this fruit in Russia and other Eastern European countries. Indonesia is still suffering from the effects of the massive floods that affected the region earlier this year. Chinese crop is very short causing raw material prices increases of as much as 40% from initial opening prices. South African plantations are being forced to leave their pineapple to rot in the fields after cadmium contamination was detected (caused by contaminated zinc fertilizer). While currency concerns have kept the two remaining South African factories out of the U.S. market, they were major suppliers to Europe, and this problem will put added pressure on Far East suppliers to make up for the shortfall.

FRUIT COCKTAIL/MIX (California style)
Imported product is still available to cover the current shortfall of domestic U.S. production.

PEACHES
Outlook in Greece remains good for the 2007 season but currency woes have so far stymied the possibility of decreased pricing. . In China, statistics show Jan-May peach exports to the U.S. almost quadrupled, from 4,458 mtons last year to 15,164 this year. Current Chinese peach crop is underway and indications predict a normal crop; however, a significant quantity of the harvest is getting diverted to the Chinese domestic market. California crop looks goods with an estimated 482,540 tons, although “Peach Fuzz” reports growers are looking for a raw material price increase over last year’s $276/ton due to labor cost increases. Growers also predict increased use of machine harvesting, but fruit damage is still a problem with this type of harvesting.

MUSHROOMS
Supply situation remains tight. India is the only significant source of product at the moment given additional anti-dumping woes for the largest Chinese packers. The drastic fall in the value of the dollar against the rupee, has packers claiming for immediate price relief so as to prevent anti-dumping action by the U.S. government. For the next season’s pack, it is too early to predict anything from China - more information will be available in October. Europe has also reported a short crop.

OLIVE OIL and RIPE/GREEN OLIVES
While it’s too early for a clear prediction, all indications point to a very good olive crop. Prices are stable at this point. Only movement in pricing right now is due to the euro-dollar exchange rate.

ARTICHOKES
The duty free status of Peru has been extended for another 8 months. South American crop has just begun and forecasts point toward a normal crop. Chilean crop is 6 to 8 weeks delayed due to unusually cold weather, but crop is still expected to be normal. Spain had a relatively short season; however, in spite of this, there appears to be some inventory left over due to the poor euro/dollar exchange and the duty hurdle. Spanish product however is significantly more expensive than that from South America.

PEPPERS
Crop is predicted to be short due to the unusual heat in Europe and cold in South America. Raw material prices are on the up-climb

TOMATOES
Harvesting has just begun in Italy, where farmers are experiencing problems with water and “Peronopera” disease (which at least can be sprayed against, comparing favorably to the yellow leaf curl afflicting some U.S. fields). China, one of the global leaders in paste production is significantly expanding production capacity, importing new state of the art production lines. It is expected Chinese output could double over the next three years. Italy is currently the number one importer of tomato paste from China.

PEPPERONCINI
Turkey was initially reporting a good crop, however there are fears that this may not materialize due the hot weather. Additionally, the Turkish lira has appreciated about 20% against the dollar in the last 6 months. Greece is reporting a normal crop, the only increase expected is from the euro

CITRUS/GRAPEFRUIT SEGMENTS (GFS)
While production has recovered from the poor storm damaged seasons of several years ago, GFS demand has still not recovered, resulting in rising inventory levels. Worse yet is a new British report linking grapefruit consumption to increased risk of breast cancer. As the U.K. is traditionally the largest GFS market, this is sure to cut demand further.

CAPERS
Market is projected to be very tight. Turkey & Morocco have started their harvest and early estimates are that the crop will be significantly less than last year with raw material pricing coming in about 15% higher.

SENATE FOLLOWS HOUSE IN APPROVING SHORT-TERM ATPA EXTENSION

The U.S. Senate approved by “unanimous consent” an eight-months extension of the Andean Trade Preferences Act (ATPA) for all four beneficiary countries (Bolivia, Colombia, Ecuador and Peru). The Senate action followed by one day the House approval. Most important for canned food imports is Peru, which can now continue shipping duty-free artichokes to the U.S.

In addition, before this temporary extension expires eight months from now, it is widely expected that the official Peruvian Free Trade Agreement (FTA) will be finalized and signed into law, making the duty free treatment permanent.

REMA FOODS IMPORT MARKET FLASH Jun 25, 2007

TRADE/POLITICS
The Andean Trade Preferences Act (ATPA), which provides duty-free benefits for most imports from Peru, Bolivia, Colombia, and Ecuador, will expire June 30, unless Congress acts to extend the program. ATPA was extended late last year until June 30, 2007, with the possibility of a further six-month extension if implementing legislation for an Free Trade Agreement (FTA) that would replace the ATPA for each country has been approved by that date. While bilateral FTAs with Peru and Colombia may well be approved later this year, it is doubtful it will happen before the end of June as the Administration has still not submitted legislation to Congress for its review and approval.

Because of high profile carrot juice botulism poisonings last year (traced to the U.S. producer Bolthouse Farms), FDA has issued new guidelines for processors of refrigerated carrot and other low-acid juices.

CURRENCY UPDATE
Dollar relatively steady over the past month.

TUNA
Skipjack continues its firming trend with raw material reportedly above $1300/mton with many packers worried $1400 is just around the corner. Even though the yellowfin catch is slightly improved, strong demand has pricing firm, with raw material at $2100/mton, up from $1900 last month and $1750 the month prior. Albacore is steady at $2300/mton. With skipjack tuna landings poor, it is hoped the “kinkai” season will improve matters. Kinkai is a lower quality (dark, oily) skipjack normally not used for export to the U.S.; however good Kinkai availability could ease pressure to other markets. Kinkai fishing does not reach its peak though until August/September. Unfortunately, the Kinkai catch is currently running significantly below this time last year.

PINEAPPLE
No change in the glum pineapple market. The summer crop will end in July, and should finalize about 30-40% below forecasted quantities. It’s expected that demand will still exceed the supply available for the next winter crop and more likely it will be spring 2008 before the situation truly improves. Re pineapple antidumping, with Maui Pineapple ceasing production of all canned pineapple as of June 30, there will be no domestic production of canned pineapple. As such, it’s possible the antidumping duty order on canned pineapple from Thailand (theoretically in place to protect the “domestic industry”) could soon be terminated.

TROPICAL FRUIT SALAD
TFS situation is worse than pineapple with shortages of pineapple and papaya. A severe shortage is expected to hold until September/October 2007 at the earliest.

PEARS
China has witnessed strong growth in its canned pear production over the past few years, with exports rising tenfold from 3,670 mtons in 2001 to 36,080 tons last year. The U.S. is the largest customer; with almost half the total exports destined for our shores. Based on the first few months’ exports, 2007 appears to be another record breaking year. With so many other fruits tight, pears are one of the few items not escalating in price.

FRUIT COCKTAIL/MIX
In deciduous fruit cocktail, demand is strong for imported product, which is still available and alleviating the shortage in domestic cocktail.

PEACHES
Greece continues to predict a good 2007 season. In China, statistics show Jan-April peach exports to the U.S. more than tripled, from 3,770 mtons last year to 11,777 this year. Chinese exports to Thailand, increased from 546 mtons to 4,289, with the vast majority used for repacking into plastic cups, for further shipment primarily to the U.S. As for the U.S. domestic crop, expectations are for a crop much better than last year, but still a bit down compared to 2005. It also appears that domestic fruit size will be below average.

MUSHROOMS
Situation remains poor in the mushroom market. China is still partially locked out due to poor crop and new prohibitive anti-dumping rates on some of the major exporters. India is shipping but is overwhelmed with world demand, which is continually pushing up costs and keeping packers committing to price on only immediate shipments.

ARTICHOKES
Market is generally steady in artichokes with the exception of concern that Peru’s duty free treatment might lapse between June 30 and the end of the year when a full free trade agreement is hoped to be signed (see “Trade/Politics” section above).

TOMATOES
The University of California, Davis has reported that a new viral disease called “yellow leaf curl” is threatening California Tomato farmers and has the potential to hurt the state’s tomato production. In China, prospects are bright with the USDA predicting Chinese paste production of 750,000 mtons, up 5% from last year. In Italy, farmers are expecting a slightly worse crop than last year; the decrease primarily the result of water shortages in the south.

REMA FOODS IMPORT MARKET FLASH May 28, 2007

TRADE/POLITICS
Prospects for free trade agreements, currently pending with Peru and Panama, brightened significantly on May 14 when the Bush administration and Democrats reached agreement on labor issues. In China, little progress was made by Treasury Secretary Henry Paulson as China and U.S. met for trade talks. Paulson first announced “we’re on the right trade path with China” but later counseled patience as the Bush administration tries to head off a congressional drive to impose trade sanctions.

CURRENCY UPDATE
The dollar reached an all-time low against the euro on Apr. 27, as weak U.S. economic figures reinforced worries about a widening disparity between growth in Europe and the U.S. The dollar/euro has since held steady for most of May. China recently announced new regulations slightly freeing up the tight allowable trading range for the Chinese yuan against the dollar. Since China first started relaxing its exchange policy in mid 2005, the yuan has firmed 8.1% against the dollar.

TUNA
Skipjack raw material costs have reached a 10 year high last week, with a Thai packer reportedly paying $1300/mton+. This dramatic firming has costs up from $1100 just a month ago, $970 in December 2006 and $790 at the start of last year (Jan 2006). In the eastern Pacific, we’re now close to the all-time record of $1400/mton. It’s reported that because of El Nino affecting water temperatures, the tuna are diving deep to reach their preferred 23 degrees Celsius zone. At these depths, the fish are not catch-able using the traditional purse seiner tuna vessels, which can only go down 50 meters. The other tuna species are following skipjack’s lead: Yellowfin is up to $1900 from $1750 last month; tongol is 45 Baht/kilo; and albacore is at $2350, up from $2300 last month and $2175 when albacore hit recent lows in February.

PINEAPPLE
As has been reported for each of the past eight months, pineapple has been hit by the perfect storm: currency appreciation, El Nino weather problems, severely reduced crop, competition from biofuel production, and Maui’s exit from the market. Pricing continues to firm dramatically: raw material costs have more than doubled and finished goods pricing has increased 50% causing one of the worst situations on record. Because of the U.S. antidumping case, prices set by packers on previous contracts have all been renegotiated upward. Alternative supply markets such as China hoped to make up some of the Thai and Indo shortages, yet so far hardly any product has actually shipped and raw material is scarce. On the brighter side, a month after the government reaffirmed the validity of the anti-dumping case (done every 5 years in what’s referred to as a “sunset review”), Maui has now finally and officially announced the closing of their pineapple cannery business. As a result, there’s talk of the anti-dumping suit finally being rescinded.

TROPICAL FRUIT SALAD
As TFS is primarily packed from pineapple and related fruits, situation is no better than with pineapple. In fact, as red papaya is the shortest of all the Thai fruits, most packers are having great difficulty packing TFS at this moment. A severe shortage is expected to hold until September/October 2007.

FRUIT COCKTAIL/MIX
In deciduous fruit cocktail, imports are alleviating the shortage in the U.S. where domestic packers are mostly sold out.

PEACHES
Finally a product with some good news: situation is upbeat for new pack peaches. In Greece, the crop should start earlier than usual and packers there are expecting one of the best crops in the past 5 years, with yields hitting 500,000 mtons. USDA is forecasting that the Chinese canned peach production will rise by 15% compared to last season. California is expecting its crop about 13 days earlier than last year but unfortunately North Carolina, Alabama and Georgia experienced a late freeze which will significantly hurt their new season.

MUSHROOMS
Market pricing continues to climb, and because of the U.S. antidumping case, prices set by packers on previous contracts have all been renegotiated upward. The only country currently shipping substantial quantities is India – albeit very slowly. They suffered from production problems (compost issues) two months ago and are still recovering from their prior shortfall. India is expecting to be back to normal quantities towards the end of June. As reported earlier, China’s crop was very short, but more importantly, the leading Chinese packer was just assessed a preliminary 196 % anti dumping rate. They are still trying to appeal, but if unsuccessful, they’ll be effectively locked out of the U.S. market. Holland, Indonesia and Colombia are vastly oversold to other markets and not offering any products.

ARTICHOKES
Spain’s crop just ended - it was a short season but in general, total tonnage is estimated to run about the same as last year. As for South America, the crop will start in a couple of months but early feedback points to a good season. As demonstrated by the chart below, Peru has experienced tremendous growth and has now surpassed Spain as the leading source for the U.S. market. A possible imposition of duties on Peruvian imports might curtail this growth - this will be known by the end of June 2007.

U.S. Imports of Artichokes in Brine in years 2003-2006:
Spain $ 52,306 / $ 50,627 / $ 38,892 / $ 32,252
Peru $ 2,462 / $ 8,947 / $ 16,911 / $ 34,261
Chile $ 3,783 / $ 5,442 / $ 8,074 / $ 9,873
China $ 0 / $ 0 / $ 505 / $ 1,288

SAFFRON
The continued shortage of supply in saffron has been forcing further increases; current market prices are about 300 % higher than the levels at the end of last year.

PEPPERS
Early indications from Turkey show the crop might be short this year as last year’s very low prices have discouraged farmers from planting this season. It is estimated that the crop output will be about 30% below last year.

OLIVE OIL, RIPE/GREEN OLIVES
Market steady.

REMA FOODS IMPORT MARKET FLASH Apr 29, 2007

TRADE/POLITICS
The beginnings of a China/U.S. trade war may be brewing. The U.S. filed two complaints against China with the World Trade Organization accusing China of tolerating widespread copyright violations and limiting the importation of books, music and video to state-owned companies. President Bush also initiated an antidumping action on Chinese coated paper. In response, China expressed “deep regret and dissatisfaction.” Meanwhile data shows China is becoming less dependent on the U.S., as exports from China to the U.S., expressed as a percentage of China’s total exports, fell every year since 2000.

CURRENCY UPDATE
Moderate weakening of the dollar against most major currencies over the past month.

TUNA
Thailand is considering initiating the process of requesting duty free access for their tuna exports to the U.S. Current duty on the majority of imported tuna is 12.5%.
Skipjack raw material pricing this month hit a three year peak, and packers expect pricing could remain firm for another few months as El Nino is blamed for poor fish landings. Raw material is trading at $1100 in Thailand, and supposedly as much as $1200 for the Andean packers that have duty free access to Europe and can afford to pay a higher price. Several packers are now estimating that the long term trading range in the Far East for 2007 will run between $950 and $1200. The yellowfin/ skpjack percentage in the catch is currently about 30% yellowfin, considerably higher than usual. While the smaller skipjack percentage is causing additional tightness in the skipjack market, a high yellowfin percentage normally increases availability and lowers the cost of yellowfin. At this moment however, demand for yellowfin from European packers is extremely high, causing the fishermen to segregate the yellowfin from their catches and send this raw material directly to Europe, where the current price at over $2000/mton is significantly higher than the $1750/mton bid in Thailand. Albacore is steady at $2300, up from $2175 in February.

PINEAPPLE
Final figures are starting to emerge on the Thai summer (April) crop. The 2007 supply is now expected to come in at 1.5 million tons, 40% below that of 2006, and lower even than the 1.7 million tons projected just a month ago. The primary cause is lack of rainfall and diversion of the planting areas for production of sugar for biofuels. Measurements of rainfall show an average 90% decrease for the first quarter of 2007, with the Rayong growing areas showing a dramatic 95% rainfall reduction. Quality is also down as much fruit was dried and burnt by the sun. In Indonesia, farmers went 115 days without any rainfall in the autumn of 2006 (due to El Nino), only to be flooded out by torrential rains a few months later. Unfortunately, demand increased concurrently due to Maui’s exit from the market and the general shortages of other cheap fruits products (especially from U.S. packers; i.e. fruit cocktail, etc). Couple the severe shortage in supply with the increased demand, and expect 2007 to be one of the toughest years ever in the pineapple market. Furthermore, the US government declined two months ago to revoke the anti-dumping duties currently in place (even though there’s no more domestic industry to protect). As a result packers are legally not allowed to “dump,” and for this reason THEY ARE INCREASING PRICES ON EVEN PREVIOUSLY CONCLUDED CONTRACTS. They claim that if old prices are not canceled and renegotiated, they’ll be retroactively charged prohibitive anti-dumping duties on these shipments, and be expelled from the U.S. market for future shipments, based on these same prohibitive duties. With the tremendous consolidation of pineapple packers that resulted from the antidumping order begun in 1995, options are limited to changing prices or exiting the pineapple market. Lastly, to add insult to injury, the Thai currency has fallen 12% against the dollar since a year ago.

TROPICAL FRUIT SALAD
With the tight pineapple market and virtual disappearance of red papaya, tropical fruit salad availability is severely limited. Even the largest branded seller in the market is short of product, with customers either out of stock or put on allocation.

FRUIT COCKTAIL
In deciduous fruit cocktail, imported product, while limited, is actually helping to alleviate the shortage in the U.S., as domestic U.S. packers are mostly sold out and even defaulting on contracts.

PEACHES
In Greece, the crop looks promising, no freeze was experienced and all indications are for a good 2007 crop. Reports from California also point to a good crop, but a late freeze in the Southern U.S. has reportedly wiped out considerable quantities of peaches in North Carolina, Alabama and Georgia. The USDA reported that the index of prices received by fruit and tree nut growers reached record highs this January and February, but this was due mainly to high prices on California oranges and lemons.

MUSHROOMS
After Chinese mushroom packers in March demanded renegotiation of their pending contracts, the Indian industry followed suit in April, effectively raising the price for all leading sources of canned mushrooms worldwide. Like pineapple, mushrooms are also imported under an anti-dumping duty order, and packers are legally prevented from “dumping” mushrooms in the U.S. market. For this reason, mushrooms packers are also INCREASING PRICES ON EVEN PREVIOUSLY CONCLUDED CONTRACTS. Officially the Chinese point to a lack of raw material while the Indians blame the appreciation of their currency, higher interest rates and an increase in the price of wheat straw, the main raw material for compost.

TOMATOES
While some are predicting a better Italian crop this year over last year, others are saying contracted area is down. With conflicting reports thrown around, it’s obviously too early to make accurate predictions.

ARTICHOKES
Initial reports on artichoke production show Spain expecting to produce about 80,000 mtons for processing (down from a normal 100,000), Peru is at around 60,000 mtons, and Chile at around 35,000 mtons.

KERNEL CORN
Events amongst European corn buyers could have an effect on the U.S. industry. The French corn packers recently persuaded the EU to charge an anti-dumping duty on Thai kernel corn, the principal origin imported into Europe. As a result, U.S. corn has become more competitive in the U.K. than both Thai and even French corn, and it’s expected that the U.K. may significantly increase their imports of U.S. and Canadian corn, adding demand from an unexpected source.

ITALIAN OLIVES
FDA announced a large recall of imported Italian olives. This has NO affect on the traditional California/Spanish style ripe and green olives. The affected olives are Cerignola, Nocerella and Castelvetrano type olives manufactured by Charlie Brown di Rutigliano & Figli S.r.l, of Bari, Italy. The brands affected are Borrelli, Flora, Roland, Cento, Dal Raccolto, Bonta di Puglia, Corrado's and Vantia.

REMA FOODS IMPORT MARKET FLASH Mar 24, 2007

TRADE/POLITICS
The US International Trade Commission (ITC) issued its latest report entitled "The Economic Effects of Significant U.S. Import Restraints." The 236 page report recommends the lowering of import duties as the net effect would benefit the USA. It summarized that "U.S. welfare, as defined by public and private consumption, would increase by about $3.7 billion annually if all of the significant restraints quantified in this report were removed unilaterally. Exports would expand by $13.5 billion and imports by $19.6 billion, while about 60,000 workers would move from contracting sectors to expanding sectors as a result of liberalization." The complete report is available for download at http://hotdocs.usitc.gov/docs/pubs/332/PUB3906.pdf .

CURRENCY UPDATE
General steadiness for the dollar over the past month, with some slight weakness against the euro. No improvement for the dollar against the Thai baht.

TUNA
The period between Christmas and Chinese New Year saw ridicules price levels for most varieties of tuna (at which little if any business transpired). Once Chinese New Year celebrations ended and fishermen returned to sea, raw material costs fell from $1100/mton to about $980/mt. Unfortunately, the fishing boats are returning with poor landings and prices have started to climb again. The current increase is more urgent than that of two months ago as it’s caused by poor fishing rather than the holiday season. Current market is $1050/mt and further increases are possible. Yellowfin is now up to $1725/mt with especially strong demand coming from Europe where Spanish yellowfin has reportedly traded at $2300/mt. Albacore, which fell from $2700 last year to $2175 last month is now firming again with last trades occurring at $2300/mt and strong demand causing packers to worry about supplies. The U.S. government reported that the single duty quota was once again filled within seconds of the opening (lasting less than one minute) and fully absorbed by product already in the US, in bonded warehouses.

PINEAPPLE
The US Department of Commerce completed its sunset review of Thai canned pineapple (most large buyers completed the ITC forms a few months ago) and as expected ruled that "revocation of the order would likely lead to continuation or recurrence of dumping" and thus anti-dumping duties were kept in force. Ironically, there is virtually no domestic industry to protect as Maui pineapple reportedly stopped producing canned pineapple last year. Overall market situation remains horrible overseas, with shortages and higher prices expected for 2007 (for all the reasons reported in each of the past half year’s worth of market reports).

TROPICAL FRUIT SALAD
Shortages of the two main ingredients, pineapple and red papaya, has product tight and pricing firm. Because of the limited nature of the papaya market, shortages in TFS could be considerably worse than on pineapple.

FRUIT COCKTAIL/MIX
Shortfall in domestic USA crop has domestic USA packers defaulting on commitments and buyers searching for overseas alternatives to fill in. Overseas stocks are alleviating the shortage but quantities are limited and selling out quickly.

PEACHES
Limited amounts of high quality Greek product are still available from the summer 2006 crop. Strong demand from South American countries is expected to take the vast majority if not all of Argentina’s new crop. Brazil for example imported from Argentina 11,365 mtons in 2006, up from 2,718 mt in 2005 and 2311 mt in 2004.

MUSHROOMS
All major supply countries to the USA market (China and India) have over the past week sent out "force majeure" type notices, demanding $1 more for retail supermarket pack mushrooms and $4 more for foodservice packs in order to ship previously committed contracts. The largest Indian packer is pointing to a 400% increase in the cost of wheat straw, while the largest Chinese packer says the price situation of 2006-07 became even worse after Chinese New Year due to "extremely bad weather, blight and cutting down of growing footage etc that cost of fresh mushroom raised for 30% while availability dropped for 20% within last 2 months. In additional to evaluation of RMB (Chinese currency) for over 5%, these become catastrophe for us."

OLIVE OIL and RIPE/GREEN OLIVES
Both of these markets are relatively steady at this moment.

ASPARAGUS
As most US imports of asparagus come from Peru, normally a poor crop in China would have little effect in the USA market. This year however, the shortage in China has European buyers looking to Peru to make up the shortfall, and the result could be increased demand for the more limited Peruvian crop.

VEGETABLES
With the short domestic crop, Midwest USA packers have been forced to raise the price they pay Canadian farmers for raw material. Raw material cost on peas and green beans is reportedly up 15%, while sweet corn cost is up 20%.

ANCHOVIES
Tonnage exports of Peruvian raw material jumped 261% so far this year compared to last. Their main export market was Spain, where packers use the raw material for canning.

Albacore Raw Material

Thai Food Processors' Assoc: Pineapple Announcement

REMA FOODS IMPORT MARKET FLASH Feb 25, 2007

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Feb 25, 2007

TRADE/POLITICS
President Bush is formally requesting Congress to renew his “trade promotion authority” (TPA, otherwise known as “fast track” authority). Current TPA, which was granted to the president as part of the Trade Act of 2002, is scheduled to expire July. TPA is of fundamental importance for the conclusion of bilateral or multilateral trade agreements since it allows for a simple “yea” or nay” vote by the Congress without the possibility of amendment (the long-held and widely accepted school of thought being that foreign trading partners would not enter into negotiations with the United States if they knew that the result of such negotiations could then be amended during the Congressional review process).

CURRENCY UPDATE
The dollar has generally weakened against the euro and most other currencies over the past month. After falling from 0.80 in October to a low of 0.75 in December, the dollar improved in January reaching a high of .78 on Jan 11. Unfortunately, the dollar has steadily slid over the past month, dipping to 0.76 on last Friday’s close. Situation has been similar for the baht, as the dollar continued to fall against the Thai currency as well.

TUNA
Most eyes are now on the albacore market, which after falling steadily, many predict may be hitting bottom. A graph of albacore pricing from 2002 to the present is viewable at at this site. It shows a market that rose steadily from $1700/mton in 2002 to $2700/mton in 2006, only to fall to $2175. In the skipjack market, fishermen are starting to return from Chinese New Year celebrations, and the market should start to stabilize at more normal levels after hitting a high of $1100/mton in January. Interestingly, in year to year trend data, Thai exports worldwide jumped from 455 thousand mtons in 2005 to 559 thousand mtons in 2006, yet Thai exports to the USA fell in that same period from 112 thousand mtons to 103 thousand mtons.

SAFFRON
Saffron normally isn’t the second reported commodity on this report after tuna, but extraordinary things are happening in the Saffron market. Pricing is now triple the levels of just a couple of months ago. The two leading worldwide producers, Spain and Iran are facing droughts which have drastically affected saffron production. Costs in Europe of $450/kilo have skyrocketed to $1600/kilo. Last year, the United States was the leading destination of Spanish saffron, taking 8 metric tons. Spaniards expect “rogue” sources may enter the market, and caution buyers to stick with reputable sources in a market like this, as there’s ample profits available to adulterers selling poor quality product. Relief from new crop won’t come until November 2007.

PINEAPPLE
The Thai Food Processors’ Association issued on Feb 5 an announcement on the pineapple situation. They reported that the “current volume for processing is drastically reduced to as much as 50% compared to the same period last year.” Causes reported include weather and ethanol production. They concluded that “latest indications are that it may be another year of record high prices of fruit.” A digital copy of the actual release can be viewed at at this site.

TROPICAL FRUIT SALAD
Shortages in the two main ingredients in TFS, pineapple and red papaya, has product tight and pricing firm.

MANDARIN ORANGES
No news yet as packers are just returning from the Chinese New Year festivities. There’s still fear that many factories will not resume production for the year, and output is running well below normal, especially on broken segments.

PEACHES
The U.S. Committee on Way and Means requested the International Trade Commission (ITC) to investigate the competitive conditions that affect U.S. growers and processors of “canned peaches, pears and fruit mixtures.” According to Peachfuzz, the newsletter of the California Canning Peach Assoc, exports in the second half of 2006 were at their lowest level since 2002, while imports were highest on record. Still market at this moment is very tight with not much relief in sight until new crop this summer.

MUSHROOMS
After steady increases every year since 2001, mushroom exports from china fell last year for the first time. Interestingly, Chinese mushroom exports to Russia more than doubled over the past two years, and the Russian market last year took in more Chinese mushrooms than the USA market – taking first place in the process. Packers are slowly shipping new crop, an improvement from last year, but nowhere near the volumes required by the U.S. market.

OLIVE OIL
After significant declines over the past six months, market is relatively steady at the moment.

RIPE/GREEN OLIVES
No change over the past month – pricing is still up about 10-20% compared to last year, depending on the variety.

TOMATOES
Italy’s raw material output in 2006 stands at 4.2 million mtons, down from the 4.8 million mtons forecasted in June, and down from 5.3 million mtons of a “normal” year.

ASPARAGUS
While overall worldwide Chinese exports still dwarf Peruvian exports, the opposite is true for the U.S. market. Because of the duty free access afforded to Peru, Peruvian exports to the U.S. have grown from 4,868 mtons in 2004 to 12,263 mtons in 2006.

VEGETABLES
The international press is reporting to overseas buyers of US vegetables that processors in the US Midwest have been forced to pay growers significantly more for vegetable crops in 2007, compared to the previous year. Price increases are reported to be around 15% for peas and green beans, but for sweet corn it may be as much as 18-36%. Most price increases for sweet corn are around the 20% mark. This will affect major Midwest sweet corn processors Del Monte and Seneca Foods.

Value of U.S. Dollar Plunges Against the Thai Baht

Flooding Afflicts Far East Pineapple Fields

REMA FOODS IMPORT MARKET FLASH Jan 28, 2007

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Jan 28, 2007

TRADE/POLITICS
The past few years of market reports have usually reported evenly on both firming and softening crops. Unfortunately, the most recent reports have been disproportionately filled with “doom and gloom.” Finally, there’s some good news to report at least on the political front. In late December, the President signed the Tax Relief and Health Care Act of 2006, which included the extensions of the Andean Trade Preferences Act (ATPA) and the Generalized System of Preferences (GSP). Had these programs not been extended, prices would have increased dramatically on a wide range of products as duty rates would have risen on January 1, 2007.

CURRENCY UPDATE
While gyrations in the Dollar/Euro market are now commonplace, the currencies of the Far East over the past few years have been remarkably steady in value versus the U.S. dollar. This stability came to a crushing halt over the past few months as the value of the U.S. dollar has recently plunged by more than 10% against many Far East currencies, bringing the total loss in value to 15% for all of 2006. A graphical presentation of the dollar vs the Thai baht is viewable above.

TUNA
As predicted several months ago, weak fish landing coupled with the Christmas/Chinese New Year season, have brought considerable firming to the skipjack market with raw material hitting the highest levels seen in several years. Now there’s talk of an El Nino weather pattern, where changing water temperature forces the fish to swim deeper, thus makes them harder to catch. Current skipjack raw material offers in Bangkok are at $1100/mton, up from only $800 a year ago. Yellowfin is generally tracking with skipjack. Tongol raw material is quite firm at 47 baht/kilo. For buyers albacore is the one bright spot - after a tight market through much of 2005 and the first half of 2006, the winter 2006 season has finally brought increased catching and significantly lower prices for all grades of albacore.

PINEAPPLE
The abundance in pineapple supply in 2006 saw the market dip to the lowest cost levels seen in over 10 years, especially for low end qualities. Predictions since the summer have been for 2007 to see a major contraction in supply and a sharp increase in price because of the “perfect storm” of influences hitting the pineapple market at the same time. Unfortunately, the predictions have come true with a vengeance, and are affecting the market earlier than expected. Photos of the El Nino flooded Far East pineapple fields are viewable above. This poor weather now coupled with the low price in 2006 which diverted pineapple plantings to more profitable fruits, overseas government’s focus on producing biofuels/ethanol (comparable to what’s driving corn in the U.S.), the 15% slide in the value in the dollar vs the Thai baht, have all led to a severe reduction in tonnage and equally significant increase in prices. The last major El Nino hit the Far East 9 years ago and resulted in a 30% reduction in the crop.

TROPICAL FRUIT SALAD
Since the two main ingredients in TFS are pineapple and red papaya, the shortages in both those fruits has packers frustrated and has caused pricing to firm over the past few months.

MANDARIN ORANGES
Market pricing is relatively steady as the relatively large mandarin crop is not translating into lower prices. China has had issues with currency value and labor shortages (there are 25~30% less laborers than last season) this season, and output is actually running slightly behind last year in most regions. With Chinese New Year fast approaching (mid Feb), factories will close soon for 2-3 weeks.

PEACHES
With the current worldwide shortage resulting from poor Northern Hemisphere crops, attention is focusing now on the smaller Southern hemisphere producers – principally Argentina, Chile, South Africa and Australia. Unfortunately, prospects so far do not look good for any of these countries to make a serious dent in the worldwide supply.

MUSHROOMS
The quantity of canned mushroom imports has recently fallen 25% with Jan-Nov imports going from 61.5k tons in 2004 to 57.1k tons in 2005 to only 46.5k tons in 2006, primarily due to the 2006 crop failure in China. As a result, according to a January American Mushroom Institute report, the cost of cannery grade raw material in the U.S. (domestic product) has recently risen 120%. For 2007, conditions overseas are better, but not yet back to normal. While China has recently begun shipments of new crop goods, cold weather has left the raw material situation inconsistent from week to week. Furthermore, increased demand from Russia is competing with U.S. requirements.

OLIVE OIL
Worries about declining prices in the olive oil market left activity levels very low in the final quarter of 2006, which further lowered overseas pricing. However some pent up demand and a recent spurt in buying activity slightly firmed up the market in January. Overall, the market is expected to remain fairly steady for the near term, with further easing possible in March/April.

RIPE/GREEN OLIVES
Overall results for the 2006 harvest are lower quantities but larger sized olives. As a result Manz (small green and some ripe) and Hojis (primarily ripe) have increased the most in price, with the situation better for Queens (large green olives). The devastated U.S. crop (mainly Manz) has also affected world supply as California packers are importing raw material, cutting into available world supply.

BABY CORN
Crop started later than expected this year with baby corn growth adversely affected by the cold weather

CITRUS
A deep freeze this month has caused severe damage to the California citrus industry.

ARTICHOKES
Most importantly, Peru’s duty free treatment was extended, as reported above. In Spain, it is still a bit too early to predict prospects for the new crop as farmers are still awaiting much desired rainfall. At the moment, there’s virtually no carry over stock from last season.

SAFFRON
Prices have skyrocketed since December. Iran, which accounts for about 80% of the world market, has reported a 50% drop in production. This situation is fueling speculation with farmers refusing to contract preferring to sell product to the highest bidder

ASPARAGUS
The size of the Peruvian crop this year is expected to be comparable to last year, which unfortunately won’t alleviate the overall world shortage caused by the poor crop in China. Thankfully, Peruvian exports remain duty free as Congress passed the ATPA extension, as reported above.

GSP Extended Two Years

In addition to the Peruvian deal, Congress voted to extend GSP for another two years, although with some caveats. We're investigating the caveats right now. They revolve around the handling of "competitive needs limitation (CNL) " waivers.

Duty Free Status extended on Peruvian Artichokes

Good news: Last Friday night into early Saturday at the Senate in Washington, the Peruvian - Andean Trade - Agreement was finally extended for another 6 months. This means Peruvian artichokes will remain duty free for now.

Dollar Plunges in Value

REMA FOODS IMPORT MARKET FLASH Dec 3, 2006

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Dec 3, 2006

TRADE/POLITICS
The GSP (Generalized System of Preferences) duty provision that offers duty free access to many imported items is still scheduled to expire this Dec 31. It is still hoped that GSP will be extended during the lame-duck session set to start this week and a drive is underway by AFI members to contact all members of Congress. Unfortunately, the shift of both chambers from Republican to Democrat control increased the odds that GSP will not be renewed. The Andean Trade Preferences Act (ATPA) is also set to expire and in the same stage of limbo.

In a decision that has implications for all future anti-dumping cases, the U.S. Court of International Trade (CIT) issued a preliminary finding that the capital intensive continuous bonds imposed on importers of shrimp subject to antidumping duties is “contrary to law.” A preliminary injunction has been issued which stops the Customs practice of requiring onerous continuous bond requirements on imports of agricultural and aquacultural products subject to antidumping or countervailing duty orders. The continuous bond requirement was imposed two years ago because millions of dollars in antidumping duties were lost when some “fly-by-night” importers either disappeared or declared bankruptcy by the time the final duty rates were announced by Commerce. A final decision by the CIT in this case is expected sometime in mid or late 2007.

CURRENCY UPDATE
The past month has been devastating for the dollar, with significant weakening against the euro, the British pound and the Japanese yen. [A summary graph of YTD dollar exchange trends is posted at this site]. So far, the year to date change for the dollar/euro has been negative 12.5%. As pointed out on the front business page of the Dec 2 New York Times, U.S. Treasury Secretary Henry Paulson’s official position, like those before him, is of support for a firm dollar. Actions however speak otherwise. A weak dollar currently suits the administration’s goals of making American exports more competitive and spurring an industrial revolution at home.

TUNA
Last skipjack trades were generally around $920. A month ago, packers sensed weakness in the market and were trying to bid down raw material at $850. The fisherman never accepted, and lately fishing has worsened. The largest packer just predicted $1000 or higher in the near future. This is a dangerous time of the year for the fish to run poorly as good catches are usually needed before the holidays. Once the holidays start (Christmas through Chinese New Year in Feb), fishing often falls off dramatically because the fisherman don’t go out much. If the fish supply is falling off now on Dec 1, we could see a pop in the market for Dec-Feb. Yellowfin is following skipjack. Albacore is relatively steady after falling considerably over the past several months.

MANDARIN ORANGES
As Spanish packers are no longer competitive for the USA market, all attention is focused on China where a picture of the new crop is beginning to emerge. While the mandarin crop itself is excellent, labor shortages are dimming hopes for a good production season. Good weather has brought a large crop with good quality and because Chinese Lunar New Year comes later in 2007, the production season should last an extra 2 weeks. However, since there are 25~30% less seasonal laborers available now as compared to last season, most packers are running only one shift instead of two. While raw material cost is RMB 1.10/kg, as compared to RMB 1.30/kg at the opening last season, other costs are up; empty cans, sugar and bank interest etc. are up about 3~5%. The Chinese RMB has appreciated by 3% already against the dollar (from 8.10 last October to 7.85 presently), and is expected to continue to firm. Most critically, wages for seasonal workers are up 30% compared to last season. Last season’s processing yield was 320 thousand mtons, plus carryover of 30 thousand mtons for a total of 350 thousand mtons (130 thousand m/tons were exported to the USA). This season, total yield is projected at 300 thousand mtons with no carryover.

PINEAPPLE
As is the case on Wall Street, market prices often quickly take into account market expectations. In pineapple, the trade has been speaking for months about impending price increases in 2007 due to bad weather cutting supply, less planting by farmers because of weak raw material pricing, and wholesale conversion of acreage to sugar cane for biofuel production. In addition, it appears several recent developments have pushed the packers to immediately withdraw their offers and reassess this season; (1) Maui Pineapple’s announcement that the last domestic producer has ended production (even though actual shipments were minimal), (2) a slowdown in fruit coming to the factories and (3) the drastic slide in the value of the dollar (down 14% YTD and at an 8 year low against the Thai baht). New prices will emerge over the next few weeks, but it is virtually certain that pricing will be very firm.

TOMATOES
New crop Italian prices are up about 15% from last year and appear to have been accepted by the market, as the majority of the crop has been sold. The weak dollar/euro can be expected to further push up pricing as the year progresses. Worldwide tomato for processing output is projected by the WPTC at 30.1 million metric tons, 7.7% lower than last year.

PEACHES
Much of the Northern Hemisphere’s production is now sold out. In China, some standard grade (small) sliced peaches are still available. With the falling dollar/euro, no bargains can be expected from Greece. The next hope for additional supply over the next few months lies in the Southern hemisphere – mainly from Argentina, where supply outlook looks good but worldwide demand is strong.

MUSHROOMS
As we near the new crop in China, the market is currently experiencing the worst old crop mushroom shortage in 20 years. At this moment, India is the only significant shipper to the USA, and demand is outstripping their supply. It’s still uncertain as to how quickly China can catch up with outstanding orders and pent-up demand once the new crop starts– expect the market to remain firm throughout this period, with possible easing later in 2007.

OLIVE OIL
While the continued outlook for olive oil pricing remains weak, and additional price cuts are expected, the olive oil market has temporarily stabilized. This is mainly the result of several factors: (1) the falling dollar/euro, (2) pent up demand, (3) worsening olive crop in Spain and (4) a disastrous explosion/fire in the holding tanks of one of Italy’s premier oil refineries, Umbria Olii, which killed 4 workers and destroyed 300-400 containers of olive oil (the plant and refinery were not destroyed and the firm is expected to recover). This comes after another large oil refiner, Casa Olearia, exited the market after converting their plant to refine bio-fuels.

RIPE/GREEN OLIVES
It’s now well established that the early Manz and Queen crops were disappointing because of drought during the growing season and heavy rain during the picking/harvesting times (exactly the opposite of what’s desired). Yet, up until last month, the Spaniards still had high hopes for their later Hoji crop – used mainly for ripe olives and olive oil. Unfortunately, the Hoji harvest has not lived up to expectations. Combined with the devastating USA crop and the weak dollar/euro, packers are projecting higher prices across the board for 2007.

BABY CORN
Shipments from overseas remain delayed as heavy rains have forced down raw material availability. Some packers claim raw material supply is currently down as much as 80%.

BALSAMIC VINEGAR
Some, but not all, packers are projecting that a 15% increase in the cost of the wine raw material used in the production of balsamic vinegar will push up finished goods cost. The weak dollar however is certain to put pressure on balsamic.

ARTICHOKES
Spanish winter crop has started off well, but main unknown right now is the value of the dollar/euro. In South America, outlook hinges on Congress taking up the GSP and ATPA trade issues. Artichokes from Peru are affected as they will go from duty free to 14.9% duty on Dec 31. Chile, on the other hand is moving in annual steps towards a lower duty rate, until they reach duty free status in 2015. Chile’s duty rate for 2007 will be 9.9%.

CAPERS
A poor crop has packers expecting reduced output, especially for the popular Non-pareil size.

CITRUS/GRAPEFRUIT SEGMENTS
Israel is expecting to have a 10 % increase in crop size this year compared to last year. Turkey on the other hand is experiencing the opposite and raw material pricing is reportedly up by as much as 35% there. This was primarily brought about by the “oversupply” they experienced last year, when much of the fruit was left unpicked on the trees, resulting in fewer blooms this year.

REMA FOODS IMPORT MARKET FLASH Nov 6, 2006

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Nov 6, 2006

TRADE/POLITICS
President Bush signed into law the Security and Accountability For Every Port Act (SAFE Port Act). The act tightens scrutiny on food imports, including establishing minimum standards for securing containers in transit to the U.S. The act also allows the Dept of Homeland Security (DHS) to work with importers meeting certain threshold requirements under a voluntary program known as “Customs-Trade Partnership Against Terrorism” (C-TPAT) whereby importers would be permitted to cooperate with DHS in securing their own supply chain. [Note REMA FOODS is one of the few C-TPAT certified importers in our field].

The Thai coup last month, in which the military ousted the Prime Minister, has been uneventful and, as expected, non-disruptive to business and Thai exports.

The U.S., traditionally the worlds leading buyer of food products is facing competition. Overall Russian imports of canned fruits have been increasing 25% per year as consumers begin demanding and consuming more. Just as Chinese demand for energy has pushed up energy costs over the past few years, the growing demand overseas for processed food is starting to affect many commodity prices, especially now when some of the world’s food commodities are being used for bio-fuel production.

CURRENCY UPDATE
Dollar/Euro exchange has been steady over the past month; however dollar continues to weaken against the Chinese yuan. The official opening exchange rate for the yuan was set at a record high against the U.S. dollar on Oct. 30. The Bush administration has been prodding Beijing to raise the value of the yuan as a firmer yuan increases the cost of Chinese imports in the U.S., but lowers the cost of U.S. exports to China.

TUNA
Skipjack has finally started to ease a bit: raw material is bid around $880/mton, yet many raw fish suppliers are still trying to sell over $900. Yellowfin remains tight with cost around $1675. Tongol remains scarce at 45 baht/kilo, but albacore has continued to weaken to $2400. Interestingly, first half year figures show total Thai tuna exports up 32% over the past two year, yet Thai tuna exports to the US were actually down about 4%. Most of the increased exports went to relatively new markets like Egypt, Libya and Saudi Arabia, where sales have almost doubled over the past two years.

PINEAPPLE
Maui Pineapple, the last domestic producer, has officially notified the trade that they are cutting off all customers except the US Government (and they don’t appear to be honoring even government needs through foodservice distributors). As a result, all customers selling domestic pineapple are currently converting their volume to fancy imported product. The resulting increase in demand, coupled with the anticipated reduction in supply overseas has packers getting worried about pineapple pricing firming in the future, and leading them to cautiously raise prices as a result. While current pricing remains quite attractive, concern is that later in 2007 and especially in 2008-2010 shortages could arise from two causes: (1) farmers switching from low margin pineapple to high value sugar cane to be used for bio-fuel production in Thailand, and (2) El Nino causing draught in Indonesia. In Thailand, raw material is currently in the 3.5-4.0 baht/kilo range.

TOMATOES
As the crop in Italy comes to a close, the situation is finalizing rather poorly. The late start in Italy, the extreme heat in California and the early frost in China have all negatively affected world supply. At SIAL Food show in Paris last week, Italian packers were still hesitant to offer official new crop offers, and current estimates are several dollars per case over 2005/2006 levels.

PEACHES
With the Greek harvest now complete, some canners report that tonnage was down 25%, while others say it was down only 10% (our opinion is closer to 10%). However, Greek pricing is currently being determined not so much by their own crop results as it is by the overall worldwide shortage, which has resulted primarily from the very poor California crop. Very weak production and strong demand in the U.S. coupled with modest production is most Northern Hemisphere regions such as Greece and China have pushed pricing up significantly over the past couple of months. Interestingly, initial reports from California played down the situation and kept pricing relatively low until recently. This had the [probably intended] result of directing many overseas plants away from packing U.S. spec peaches for speculation and is thus limiting the available stocks overseas now. According to the California newsletter Peach Fuzz, imports last season were up 68% over the year prior. The crop outlook in South America is very good (note production season is opposite of Northern Hemisphere), but unfortunately the quantities might not be big enough to push down pricing.

MUSHROOMS
Current worldwide pre-season inventory situation remains the worst seen in possibly more than 20 years. Poor yields in many producing countries during 2006, especially the disaster in China, arguably the world’s most important production source, have buyers scrambling. New crop production, coming over the next few months, is still uncertain. This is especially true for consumers in the U.S., as the antidumping suit on mushrooms in this country is expected to knock some previously significant Chinese shippers out of contention with new very high anti-dumping rates (with rates of 195%). In Holland, the situation is no better as packers there have “green mold” in their compost – cutting yields as much as 25%.

OLIVE OIL
Carry over and new crop production by country is projected as follows:

Country Carry Over Production Total Quantity
Spain 380,000 1,100,000 1,580,000
Italy 140,000 380,000 520,000
Greece 90,000 320,000 410,000
Tunisia 30,000 160,000 190,000
Syria 40,000 120,000 160,000
Morocco 5,000 65,000 70,000
Turkey 30,000 210,000 240,000
Other 10,000 60,000 70,000
Total 3,240,000

New crop pricing overseas has already fallen and as goods reach the U.S. pipeline, pricing should continue to fall here. In the short term however, many expect the market to stabilize. Because much of the trade has been delaying purchases in expectation of a lower market, there’s currently a tremendous pent-up demand waiting to be unleashed. Unfortunately, this could have the effect of lifting the market a bit – but still no way near the high prices experienced in 2006.

OLIVES
Table olive crop is nearly complete. Pricing is firm and quantities are below last year on all varieties (although Manz are comparatively shorter than Hoji’s). The causes are:
1.- Lack of rain until mid October which slowed down the start of the picking.
2.- Continuous rains later in October which made picking difficult.
3.- Short crop in other countries.
4.- Low carryover from last year.
5.- Relatively good pricing for Olive Oil (even after the oil price drop).

MANDARIN ORANGES
Initial indications for new crop as discussed by the packers at SIAL was for a good season with regard to quantities, but packers have been backtracking over the past week. The Chinese government association announced opening pricing 10-15% higher than last year and is trying to limit output by allowing packers to pack only 70 days. Packers are arguing that pricing will remain firm because of increased costs in labor, cans, packaging and the appreciation of the Chinese currency. Furthermore, dry weather means the fruit will be smaller than usual, affecting yields. Final market pricing is not yet fixed and supply and demand will determine where it lands. In Spain, after a disastrous crop in 2005, packers are expecting a 49% larger crop this year. While Spanish exports are still not expected to be competitively priced for the USA market (compared with China), their better crop could have the effect of lessening Chinese exports to Europe.

CITRUS
Coming after severe damage to the crops over the past few years, there is surprisingly a glut of Florida grapefruit juice on the market. Industry sources blame this on a total lack of promotional activities. To counter the trend, the industry has set aside marketing funds and is asking USDA to buy grapefruit juice for its food programs. With regard to Florida exports, overseas buyers sense the current situation and have halted most purchases of Florida product, expecting pricing to further collapse very soon.

REMA FOODS IMPORT MARKET FLASH Oct 2, 2006

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Oct 2, 2006

TRADE/POLITICS
Thailand experienced a coup a week ago as the military ousted the Prime Minister while he was in New York planning to speak at the U.N. As far as coups go, this one was quite peaceful, and aside from schools being closed for a day, daily life in Thailand remains much unchanged. At this point, no business interruptions are expected.

GSP, which provides for duty free access in the U.S. for many imported products such as Turkish roasted peppers, was expected to lapse this year with Congress not renewing the provision. Last week however, Rep. Thomas, the chairman of the House Ways and Means Committee introduced a bill extending GSP for two years. The next day, in a last minute development, the GSP bill was pulled off the calendar right before Congress was to recess for the mid-term elections. It is hoped now that GSP will be acted on during the “lame-duck” session that will be conducted after the November elections. While the “lame-duck” session is scheduled to begin on November 13, the outcome of the elections will likely determine how long the session will continue, and how much work will actually get done during that period. The general feeling is that the session will go on longer, and cover more ground, if the Republicans keep control of both the House and Senate.

The Peru Trade Promotion Agreement and the extension of the Andean Trade Preferences Act (ATPA) are in the same predicament as GSP and hopefully Congress will act on one or both before December 31.

CURRENCY UPDATE
Relatively steady Dollar/Euro exchange over the past month. Following Treasury Secretary Henry Paulson’s trip to China, the Chinese government has already sharply stepped up the appreciation of their currency, up about 1% in September (note higher Chinese yuan, lower dollar, equals more expensive imports).

TUNA
Skipjack relatively steady in the $935-965/mton range. Yellowfin on the other hand, continues to firm. The percentage caught of yellowfin vs skipjack (they're caught together) has been running 6% vs the usual 25%. At the same time, demand is very strong especially from Japan, because of the lack of bluefin tuna. Tongol is also firm at 45 - 47 Baht/kg. Albacore is steady.

PINEAPPLE
A significant reduction in new plantings has led to lower volume estimates for pineapple production in Thailand for next year. Thailand has often in the past fallen subject to the boom/bust mentality that causes farmers to increase plantings when prices are high, which results in lower pricing after the 16 month growing cycle - to the point that low pricing leads the farmers not to replant – thus starting the whole cycle anew. This time however, there are expectations that the lesser plantings may be longstanding as farmers are switching pineapple production to sugarcane for production of ethanol (biofuel). Ethanol demand in Thailand is increasing sharply, and Thailand domestic production currently only covers about 30% of domestic demand. As a result the Thai government will be offering incentives for farmers to grow crops for ethanol, making cheap pineapple a likely target.

TOMATOES
The situation in Italy continues to worsen. From a normal crop of 5.5 million mtons, the forecast has been reduced from 5.3 mm to 4.8 mm to 4.2 mm and the latest, 4.0 million mtons. Latest news is continued rain – not good for the crop.

PEACHES
World outlook for Northern Hemisphere peaches appears gloomy. While Greece production is only 5% off from last year, the key problem upsetting the world demand/supply balance is the California harvest, now expected to be down 26% compared to last year. Sharply higher U.S. demand caused by the poor domestic crop, along with a weaker dollar vs the euro as compared to a year ago have European peach pricing up significantly, and the market continuing to firm. Several Greek plants have already announced that they have not been able to pack enough #10’s to fulfill their contracted obligations.

MUSHROOMS
In these final months before the new crop begins, given the tight market all year, shortages have erupted for most “special specs,” while commodity specs remain firm with pricing expected to continue firming until the new crop. China, the world’s major supplier, defaulted early in the year on much of what was contracted, while India and Indonesia tried to make up most of the difference over the balance of the year.

OLIVES
California is forecasting 50,000 short tons this year, down 65% from last year, and the single worst crop in over 24 years. In Spain, the full crop is expected to finish in the 400-445,000 mton range, a bit under last year, but short about 100,000 from the 2004/2005 season. Total Spanish forecasts by variety are: Manzanilla 140.000 tons, Hojiblancas 145,000, Queens 18.000, Carrasqueñas 50.000, Cacereñas 40.000 and others 7.000. The manzanilla crop (usually used for green olives) is almost complete, while the hojiblanca crop (usually used for ripe olives) has just begun. The median manzanilla field price paid to farmers so far this season is 0.81 euro/kilo as compared to 0.66 last season. As a result, green olive prices are expected to increase. For ripe, raw material costs should be steady, while a firm euro will put pricing about flat to slightly up compared to last year. Worldwide, total harvests are estimated to run about 123,000 mtons below last season – a drop of about 14%.

OLIVE OIL
No change in the outlook, which remains good as we head towards the new pack. New crop expected price levels have weakened as a result.

MANDARIN ORANGES
Posturing has begun between the Spaniards and Chinese with regard to the new crop just a few months away. Expect the situation to become a bit clearer in a few weeks at the SIAL world food show in Paris.

CITRUS
Sunkist Growers filed an antidumping duty petition on imports of lemon juice from Mexico and Argentina. Expect pricing to firm. The scope of the investigation will include lemon juice, with or without addition of preservatives, sugar or other sweeteners, regardless of the GPL (grams per liter) of citric acid, level of concentration, brix level, brix/acid ratio, pulp content, clarity, grade, horticulture method (e.g., organic or not), processed form (e.g., frozen or not-from-concentrate), FDA standard of identity, the size of the container in which packed or method of packing or end use.

REMA FOODS IMPORT MARKET FLASH Aug 28, 2006

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Aug 28, 2006

TRADE/POLITICS
The pension reform bill recently signed by President Bush included several added provisions beneficial to imports, including AFI’s (Association of Food Industries) request for duty eliminations/reductions on capers and pepperoncini. Duty changes begin September 2. While capers imported in bulk and repacked in the U.S. (much of U.S. consumption) were always duty free, now capers packed fresh at origin will also be duty free. On pepperoncini, while Turkish product was always duty free, Greek origin product will be charged only 2.2% duty instead of the prior 9.6%.

Unfortunately, the same pension bill also included a provision requiring cash deposits to cover estimated antidumping (AD) and countervailing duties (CVD) on imports from new shippers of product subject to an AD or CVD order.

In repercussions from the London airline bombing plot, U.S. Customs and Border Protection (CBP) announced that due to the current heightened state of alert, “the importing public may experience some delays in the processing and release of their cargo.“

Lastly, the long lead time of imports require safety stock, and rising interest rates have raised the cost of those stocks. After raising interest rates 25 basis points at each and every meeting for the past few years, taking Fed Funds from 1% to 5.25%, the Fed this month, for the first time in years, finally left rates unchanged.

CURRENCY UPDATE
Slight weakening of the dollar (meaning higher costs on imports) over the past month. Dollar/Euro rate is currently at 1.28.

TUNA
The activist group Greenpeace has taken up a fight with tuna fisherman trying to prevent overfishing of yellowfin and bigeye tuna species. The group is arguing for an immediate 50% reduction in catch levels of these two species in the Western and Central Pacific Oceans in order to safeguard their future sustainability.

Interestingly, the 12 month moving average price for Bangkok skipjack remained in a relatively narrow band of $820-920/mton since mid 2004. Yet, with fuel comprising more than 50% of the cost of fishing (possibly more than any other food commodity), the breakeven cost of fishing has gone up by about $200/mton since fuel pricing began to soar. At this point, skipjack is trading at $970 and packers predict it will break through $1000 momentarily and then stay firm for the near term future. Yellowfin, currently the tightest of all the tuna species has firmed from $1100/mton in 2005 to $1675 today, a 50% increase. After continued firmness over the past year, albacore appears to be leveling off at $2650/mton.

PEACHES
The U.S. industry predicts the California crop will amount to at most 348,000 tons, a fall of 28% from last year, and the smallest crop in more than 20 years. The Food Institute reports that 6/10 selling prices have increased 10%-15% within the last two months. Overseas, China is raising pricing, though some bargains still exist – unfortunately reliability in delivery is not strong. In Greece, crop projections are still good, but slightly weaker than a month ago. Due to the strong worldwide demand, however, Greek packers have opened offers at about $3.00 higher pricing than last year.

MUSHROOMS
Market is still very tight. India is the only game in town and is quite overbooked. China is not expected to resume shipments again until November/December. New crop in China is only being planted now, so it is too early to make any reliable forecasts.

TOMATOES
Extreme heat (46 days of 100+ degrees) is taking its toll on the California crop, and experts say the harvest will have to run well into October to recover volumes lost early in the season. In Italy, early indications from packers show that prices might be higher for this year’s crop. While the crop is slightly delayed, if the weather continues to be favorable as it is right now, crop might still be OK. However, if it turns cold too soon, crop will be affected. Generally, packers are expecting an approximate 30% drop in production compared to last year.

OLIVE OIL
While pricing is still a bit weak on pomace, extra virgin prices have stabilized (some packers have even raised offers recently, especially on higher end grades). Expectation remains for the new crop to be a good one, and for pricing to fall further towards the end of the year. At this moment, some holders of very low quality oil are dropping prices earlier in hopes of clearing out poor quality goods before general market prices fall. Expect the spread between high and low quality oils to grow over the new few months, then tighten again when the new crop becomes available and large quality refiners have product at new crop pricing.

OLIVES
U.S. factory California Olive Growers has closed, with the plant’s olive and tomato lines scheduled to be auctioned off. The company was originally formed when a farmer’s cooperative took over the Oberti Olives brand following the bankruptcy of Tri Valley Growers in 2000.

PINEAPPLE
No significant change over the past month in the Far East. In South Africa, the largest packer announced that cheap Thai product and the strong Rand (currency) will force it to abandon most offers until the end of the year.

PEPPERONCINI
As noted above in the Trade/politics section – the duty on Greek pepperoncini has been reduced from 9.6% to 2.2% (of FOB origin value). Turkish was always duty free and continues as such.

BABY CORN
The recent trend of farmers away from baby corn farming and moving to higher value crops, coupled with heavy rain and flooding has created a severe shortage of raw material. As a result, the cost of raw material has firmed drastically and virtually every factory is behind on shipments.

REMA FOODS IMPORT MARKET FLASH

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: July 24, 2006

TRADE/POLITICS
A new study was released showing that imported tuna from South America (Ecuador, Mexico, Costa Rica) has higher mercury levels than domestic tuna, while tuna from Asia (Thailand, Malaysia, Philippines) has the lowest mercury levels worldwide.

The U.S. government is currently evaluating the GSP (Generalized System of Preferences) duty free treatment of many imported items. In addition, there’s still talk that GSP will be allowed by Congress to expire at the end of this year, which could raise duties on many items including clams, baby corn, sardines, peppers and green olives from certain countries.

Efforts to salvage the so-called Doha Round of multilateral negotiations under the World Trade Organization (WTO) have collapsed. These talks between the U.S., the EU, Australia, Brazil, India and Japan, which have been in process for nearly five years, have been suspended. It is undetermined at this time when - or if - the talks may ever re-commence.

CURRENCY UPDATE
Relative stability in the foreign currency markets.

TUNA
Large catches of “Kinkai” skipjack have stabilized the market after several months of firmness. For the market to keep from firming again, catch of regular non-Kinkai needs also to improve, as Kinkai is a Japanese caught raw material which is very oily, and typically not suitable to the quality level required in the U.S. market (watch out for cheap offers). Current levels at $920/mton, down from $980. Given the higher cost of fuel, and the fact that fuel is by far the single largest cost component of fishing representing more than half the cost, it is now estimated that $900 is close to the “breakeven” fishing cost of skipjack. Yellowfin continues to firm, with levels now at $1750/mton FOB General Santos, Philippines, up from $1675 last month. Albacore has finally hit a plateau, with the market steadying after almost a year of constant increases.

PEACHES
In the U.S., Seneca has announced their acquisition of Signature Fruit. In Greece, completing their 2005 shipments, canners have now declared themselves fully recovered from the crop failure they experienced in 2003. Now, 2006 is proving to be an excellent year for Greek packers as they experience the unique combination of an excellent crop aling with high prices caused by the poor crop outlook in much of the rest of the world. Interestingly, one of the largest importers of Greek peaches is now Thailand (almost 5,000 mtons), where peaches are imported to be repacked into plastic fruit cups and subsequently exported to the U.S. at premium prices. While the weak dollar is further pushing up prices from Europe, prospects look better from China. Even though the crop is much smaller than that in Greece, China appears positioned to offer better prices to the U.S. Still, pricing is higher in China this year as compared to last. Raw material is running at RMB 2.0/kg vs 1.6/kg last season.

PINEAPPLE
This summer’s crop is finishing up in much better shape than that of the past few years. Raw material costs are running 2.8 baht/kilo, down from 3.0 last December 2005 (although the Thai baht has strengthened against the dollar). The abundance of raw material and lower baht raw material pricing is causing farmers to switch crops away from pineapple - primarily to sugar cane and rubber, two commodities trading at very high prices. Unfortunately, this has been the course of pineapple over the past two decades – wide price swings as farmers drop pineapple when pricing is low, only to start planting again when the impending shortage brings up the price, starting the cycle anew every 16 months.

MUSHROOMS
Situation remains very tight with China virtually out of stock and India raising prices dramatically as a result. No other overseas country currently has significant enough volume to affect the world market.

TOMATOES
California is starting up about 10 days late in the South and 15-20 days late in the North. Crop forecasts are at 10-10.5 short tons. In Italy, the crop is also running late. Total production is estimated at about 4.7 metric tons. Since for the past three years Italy has exceeded the 4.35 mton ceiling granted by the EU, the subsidy paid to farmers this year will decrease from euro 34.51/mton to 30.43. Given the above, and assuming stability in the currency, market pricing is almost certain to rise; however competition between the large factories is expected to keep the increase reasonable.

OLIVE OIL
Generally, it’s a continued weak market as raw material slowly trades down in anticipation of a good new crop harvesting at the end of the year. However, a recent development is putting upward price pressure primarily on imported oil packed in Italy. It appears that a tanker shortage is preventing Spanish oil from making its way to Italy. It’s unknown what, if any, long term effects will arise.

BAMBOO SHOOTS
Season started late June, but three weeks of continuous rainfall has raw material volume below original projections. Expectation is that the situation will improve gradually and raw material price will soon return to reasonable levels

PEPPERONCINI
With many Turkish factories in production, intense competition is keeping pricing relatively stable. In Greece however, higher raw material costs and the strong euro have pricing up. Note Turkey is not euro denominated, while Greece is.

REMA FOODS IMPORT MARKET FLASH

REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: June 26, 2006

TRADE/POLITICS
A recent decision by the Department of Commerce in an anti-dumping (AD) case involving Chinese candles could mean trouble for the food industry. After the department previously ruled that certain candles were not subject to AD duty, they recently changed their mind and are charging importers at the higher rate for goods brought in RETROACTIVE to February 2005. This willingness to retroactively expand the scope of AD assessments could have significant implications for a wide range of imported products.

The Andean Trade Preference Act (ATPA) is currently set to expire on January 1, 2007 (the Generalized System of Preferences is scheduled to expire at the same time). The ATPA provides for duty-free, or dramatically reduced duties, on a wide array of U.S. imports from Bolivia, Colombia, Ecuador and Peru. At this time, prospects for renewal or extension of the ATPA are questionable. If the program indeed terminates, it is likely that the U.S. duty rates will revert to “normal trade relations” (NTR) rates.

The United States and Vietnam signed a bilateral trade pact that removes one of the last barriers to that country’s accession to the World Trade Organization (WTO). Because U.S. imports from Vietnam already receive “normal trade relations” duty status under a mechanism that must be renewed annually, this act will not have any immediate impact on U.S. import duties for most products. However, conclusion of a trade agreement with the United States paves the way for Vietnam to receive NTR duty status on a permanent basis, without the necessity for annual renewal, and also completes a process necessary for that country to join the WTO. These actions could open the door down the line for duty reductions.

CURRENCY UPDATE
After dropping sharply for two months, the dollar has stabilized against the euro.

TUNA
All varieties are relatively firm at this moment. This often is the case after the worldwide tuna conference (which occurred in June) when the overseas fisherman have had their chance to commiserate together. Skipjack is reported at $1000/mton, but finished goods selling prices overseas seem to based more on expectations of $1100+ fish. Yellowfin is now over $1675 and fish traders are predicting $2000. Tongol is steady. Albacore is steady at relatively strong levels.

PEACHES
Unfortunately the weak dollar and the overall tight world market have Greek packers vigorously pushing up their new pack indications. It’s still a bit too early to gauge opening levels in this year’s difficult world market. China is now expecting growth of 10% in their peach exports this year, though total tonnage is much smaller than that of Greece, and Chinese packers have still not announced new crop pricing. Southern hemisphere producers such as Chile, Argentina, Australia and South Africa do not have high hopes for the coming season (winter crop). The best opportunities to make up for the shortages expected in California still lay with Greece and China.

PINEAPPLE
Production is good, and pricing in Thai baht has fallen. The strong Thai baht however has kept U.S. pricing relatively steady, with some opportunities for cheaper pricing on lower grades. Current market is probably at the low point for this season.

MUSHROOMS
With China now defaulting and out of the picture, other sources continue to push up price levels in a seller’s market. India is currently the principal supplier of any significant volume to the U.S. market.

TOMATOES
Tomato paste pricing is firm. California’s harvest is estimated at 10-10.8 million short tons, below initial estimates. China on the other hand is expecting an average crop of about 4 million metric tons (4.4 short tons). Chilean production estimates show 2006 output smaller than last year’s.

RIPE/GREEN OLIVES and OLIVE OIL
Market remains weak, especially for olive oil, as packers prepare for a large 2007 crop with the market coming off record high pricing reached earlier this year. The “cartel” mentality of the large Spanish coops is now working against them as reduced demand pushes down pricing. Further price weakening is probable.

ANCHOVIES
Spanish raw material is especially tight as the new fishing season has started off very poorly. The President of the Fisherman’s Association in Bayonne and St Jean De Luz labeled the new season in Spain and France “disastrous.” Spanish and French exports of canned anchovies have been relatively flat over the past three years, while the much larger export volume from Morocco have fallen about 25%.

ASPARAGUS
A good crop in Peru is offsetting a terrible crop in China, but since Chinese production is generally much larger, overall world production is down.

PEPPERS/PIMENTOS
Crop is off to a good start in Spain. Pricing in euro should be roughly the same as last year, although if our currency stays weak, dollar pricing could be a bit higher. In Turkey, pricing in dollars is expected to remain the same as last season.

BAMBOO SHOOTS
Uncertainty on the season has Chinese packers delaying new crop offers. While the season has officially started, continuous rain has left raw material costing 50% more than at the beginning of the last season.