Monday, November 25, 2013

REMA FOODS MARKET FLASH Nov 25, 2013

TRADE/GOVERNMENT:  Importers are busy working with FDA and preparing for the Food Safety Modernization Act (FSMA).  The FDA comment period will soon close.

Duty rates remain higher as the Generalized System of Preferences (GSP) and the Andean Trade Preference Act (ATPA) have both expired.  Post-shutdown Congress is still too busy to pass extensions.

CURRENCY: dollar quiet, trading around 1.35 to the euro.

TUNA:  Super Typhoon Haiyan in the Philippines, while a devastating tragedy, has not had any marked effect on the tuna industry.  The FAD ban period is over and fishing remains strong.  Skipjack continues to trade sluggishly, now in the $1700-1750/mton range.    Albacore continues to trade at the low price of $2400-2500.  Yellowfin has resisted the fall; it remains around $2350-2400.

OLIVES:  Major news is still Spanish queens.  New crop has a drastic shortage of over 70%.  Raw material costs have more than doubled.  Packed goods pricing for genuine Spanish queens is up over 50% from last year.  Queen olives from other countries will come into the market at lower prices, but not the same quality level.

PEACHES/COCKTAIL: The bad situation in California is worse than forecasted.  Packers are renegotiating already reduced quantities.  The California Canning Peach Assoc (CCPA) ratified a 2014 price agreement with Seneca, Del Monte and PCP for a base raw material price 8.3% higher than this year.  Imports are helping to make up the shortfall but most available supply is already spoken for.  For the upcoming Southern Hemisphere crop (opposite timing to us in the North), South Africa suffered hail last week that destroyed 5-10% of their crop.

COCONUT:  Super Typhoon Haiyan in the Philippines has had a marked impact on the desiccated coconut market.  One manufacturer reports crop damage of 35-50%.  The Philippine industry, one of the world’s largest sources, remains withdrawn at this time.

TOMATOES:  Industry fears a shortage looming for 2014.  California is expected to finish this year at 11 million US tons, about 1 million tons under pre-season expectations, and 4-7% below last year.  Italy’s tomato production has shrunk by 15% this year compared to last.  The serious problem looming ahead is that according to the WPTC, global tomato production is expected to come in at 32.8 tons.  Global consumption is expected to remain stable at 40 tons.  Ouch.

PINEAPPLE:  Far East pineapple processors escaped heavy damage from Super Typhoon Haiyan.  Still, heavy rains did not help an already tightening market, and what damage did occur will likely impact 2014 supplies. Raw material costs remain higher than normal for this time of the year: 5.8-6.1 baht/kilo now vs 5.0 normally, and 4.0 last year.

MANDARINS:  Since mandarins are high acid fruits and don’t “age well” in the can, a substantial Chinese carryover stock may bring a two tiered pricing system this year: cheap old crop vs more expensive new crop.

MUSHROOMS:  China and India are still primarily shut out of the US market. Europe (Holland, Spain, France) continue to make up the difference.