REMA FOODS IMPORT MARKET FLASH
REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: July 17, 2005
Normally, the USA’s Duty Free GSP (Generalized System of Preferences) system revokes duty free access once exporting countries reach a market share of over 50% of the U.S. imports, or if their dollar value of exports of the particular item go over $100 million/yr (limit adjusted annually). This year, in an effort to assist Southeast Asian countries hit by the last December’s tsunami, these rules were rescinded, allowing several items to remain duty free. The list includes Indian pickles, Thai dates, Turkish pistachios, Thai frozen tuna loins and Pakistani dates.
Our lawyers report the Chairman of the House Ways and Means Committee, Rep. Bill Thomas (R-CA), provided his public support for a bill introduced by fellow Committee Member Rep. Phil English (R-PA) that would take aim at trade relations with China. Chairman Thomas’ decision to support the English bill and bring it to a vote in the full House Ways and Means Committee under expedited rules is an overt attempt to sway a number of votes in the House in favor of the proposed Central American Free Trade Agreement (CAFTA-DR). A vote in the full House of Representatives on the CAFTA-DR - which is likely within the next two weeks before Congress leaves for its August recess - is still considered “too close to call.” Chairman Thomas and Rep. English hope that the deal announced yesterday on the English bill will be sufficient to sway enough votes in the House to turn the tide in favor of CAFTA-DR.
After several years of weakness, it’s reassuring to see some sustained strength and stability for the dollar against most currencies including the Euro and Yen.
The raw material catch is reportedly down about 25% as compared to the first half of 2004, forcing up the price of raw material. After months of firmness, prices started leveling off, only to take off again over the past month. Skipjack is about $950/mton, and fish traders are predicting $1000 and higher for new arrivals. Lack of fish and poor economics have caused one large plant to temporarily shut its doors. Yellowfin is increasing proportionally with the price of skipjack. Tongol, which is caught by small local vessels in Thai, Indo and Vietnamese waters, remains extremely tight with virtually no landings at the moment. Albacore, after holding steady for the past few months, has recently increased about $2/case as demand increased, while supply decreased.
PINEAPPLE, TROPICAL FRUIT SALAD
The harsh drought of the now complete Asian summer season has pineapple pricing continuing to firm, especially on higher quality fancy fruit.
Mixed signals in the olive oil market – While pricing has definitely fallen from the high levels of the past couple of months, refiners are predicting a possible return to firmness in the market. The main problem is the outlook for new crop 2006, which at this moment has the potential to be quite poor. The outlook should become clearer over the next few months.
Initial crop estimates from both the USA and China point to smaller than anticipated crops. In Italy, estimates point to approximately 4.9-5.0 million metric tons, down considerably from last year. Yet significant carryover might hold back significant price advances on whole peeled tomatoes.
Traders in Europe are pushing for eased restrictions on Chinese mandarin imports, as the Spanish industry cannot anymore meet even European requirements. Exports from Spain to the USA have fallen from 29,000 tons a few years ago to only 6,000 tons last year. An increase in Chinese exports has offset the Spanish decline.
Situation in Greece is still unclear, but new crop offers should be out very soon. In China, while gigantic strides in quality have been made over the past two seasons, consistency is still not a strong suit and offer prices vary widely based on perceived quality differences.
HEARTS OF PALM
Shortage in Brazil, the only source for the higher quality “wild” hearts of palm continues to firm the market.
Even though the Spanish crop is not great, competition from South America has forced Spanish packers not to raise pricing as they had originally hoped. Pricing from Peru and Chile has firmed from last year, as packers there become more established and demand lifts for South American artichokes. Overall, Southern Hemisphere packers are trying to keep pricing just slightly under Spain in order to continue their market share growth.
After a disastrous crop last season, improved farming has the price of Spanish peppers coming down. At the same time, Turkish pepper suppliers are raising pricing, after losing money last year, thus narrowing the price spread between Spain and Turkey.
The manufacturer of Coco Lopez brand coconut cream announced that heavy rains and flooding and has brought coconut shortages and significant delays in the production and shipment of their product. Other producers of private/packer label product are filling the gap.
Bad weather has Chinese producers worried that 2005 could be one of the worst harvests in decades.
Hurricanes over the past year have spread canker through Florida citrus fields. The solution has been the state’s I 900 rule, where every tree within a 900 foot radius of an infected plant is destroyed. In the DeSoto nursery, where 5 diseased plants were found, a total of 95,000 plants have to be destroyed.