Monday, March 09, 2009


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 Comments on this draft guidance are due by April 12, 2009. (Draft guidance dated 01/09 is available at

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%.

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.

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.

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.

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.

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.

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.

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.

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 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.

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 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.