FOOD IMPORT GROUP Market Flash
Website Home: www.foodimportgroup.com (201) 947-1000
Sunday, February 25, 2007
Saturday, February 24, 2007
REMA FOODS IMPORT MARKET FLASH Feb 25, 2007
REMA FOODS IMPORT MARKET FLASH Tel: 201-947-1000
DATE: Feb 25, 2007
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).
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.
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 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.
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.
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.
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.
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.
After significant declines over the past six months, market is relatively steady at the moment.
No change over the past month – pricing is still up about 10-20% compared to last year, depending on the variety.
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.
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.
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.