Saturday, March 24, 2007


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 .

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.

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.

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).

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.

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.

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.

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."

Both of these markets are relatively steady at this moment.

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.

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%.

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.