Monday, June 25, 2007


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.

Dollar relatively steady over the past month.

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.

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.

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.

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.

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

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.

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.

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).

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.