Monday, December 13, 2010

PINEAPPLE UPDATE

Raw material costs for “Winter Crop” pineapple, the smaller of the two annual crops, have escalated from 4.00 baht in the volume peak of last winter to 6.50 baht this year; a 62% increase.

The U.S. dollar has also lost nearly 10% of its buying power against the baht in the same time frame.

Factories are not offering as they work to fill existing contracts from the limited available raw material.

Packers are advising a firm market as there is strong worldwide demand, a smaller crop, and a shorter pack season.

There is also a shortage of pineapple concentrate. Packers are prioritizing available resources toward their concentrate production lines as it is more profitable.

China is historically a source for the cheaper “Queen Variety” fruit. This year, they experienced a poor crop. The small crop, coupled with strong domestic demand for fresh fruit in China is increasing demand in the Thailand & Indonesia markets. Chinese new crop prices are actually higher then Thailand at this point.

The summer crop, the larger of the two seasonal packs, historically begins in April for summer arrivals.