Monday, July 29, 2013

REMA FOODS MARKET FLASH July 29, 2013

TRADE: The Generalized System of Preferences (GSP), which provides duty-free treatment to about 5,000 products imported from more than 100 beneficiary developing countries, is scheduled to expire July 31, 2013.  A bill (H.R. 2709) introduced July 17 would extend GSP through September 2015.   While this is a positive first step, the House will not actually vote until the Senate approves similar legislation. The bill likely will need to pass the Senate by unanimous consent, meaning any one senator can block renewal, as happened in 2010.  Any attempts to amend the bill also jeopardize passage before July 31.  Import foods items that will be affected include pickles, baby corn, pepperoncini, capers.
 
FDA last week announced the release of two proposed rules under the Food Safety Modernization Act.  The first relates to the Foreign Supplier Verification Program; the second pertains to the accreditation of third-party auditors.  The proposed rules for the first time put the main onus on companies to police the food they import.  Michael Taylor, deputy commissioner at the FDA, said the new rules on imports would cost companies $400 to $500 million.  Large importers are generally in favor of the new rules as most already have similar measures in place.

CURRENCY: The dollar weakened to euro/dollar 1.328, close to its 52 week low and about 4% weaker than just a few weeks ago.

PINEAPPLE: The relatively poor Thai summer pineapple crop is coming to an end and most packers will soon shut down for maintenance as fruit deliveries dwindle.  Raw material prices have leveled off at 5.50 baht/kg this season as compared to 3.00 baht/kg in 2012.  It’s hoped the higher pricing will encourage more farmers to plant and will contribute towards a better supply situation in 2014.

PEACHES -  The Greeks have finally started their season, but initial pricing is several dollars higher than expected just a few months ago before frost and hail hit the crop.

MUSHROOMS –  European suppliers (Holland, France, Spain) have dominated the US mushroom market for the past year, but the recent devaluation in the dollar could push up US pricing if these levels persist. India’s main packer remains shut with no expectation of re-entry into the market.  Chinese packers continue to face pesticide issues and anti-dumping duty rates of over 300%, effectively keeping them out of the market as well.

Monday, July 22, 2013

REMA FOODS MARKET FLASH July 22, 2013

Based on customer feedback, starting this week the Rema Market Flash is returning to the model of frequent short reports on the week’s highlights.   Expect the straight news direct from our buyers on the week’s major occurrences in the import market.

TRADE: On July 9, 2013, U.S. Customs began implementation of Importer Security Filing (ISF or 10+2) enforcement. Importers may now see penalties of up to USD 5,000 for each instance of incorrect, incomplete or untimely filing.

CURRENCY: Euro/dollar at 1.316, after bouncing around in the 1.29-1.32 range for the past couple of weeks.  Note the 52 week high for the dollar was 1.209; the low 1.344.

PEACHES:  Coming off a short crop last season in the USA, the market remains tight.  The latest California League of Food Processors’ crop estimate for 2013 is 380,917 tons, compared with 367,956 tons last year.  Hot weather has farmers concerned about fruit sizing.  In Greece, severe hailstorms destroyed a good part of the crop; minimal exports are expected.  China still offers hope for the US market.  While some packers report the crop volume is down 40%, the USDA forecasted only a 4% drop for China – the final figure may be somewhere in between.  Quality packers in China however realize they’re the main players that can make up for shortages in the rest of the world, and pricing for high quality third-party audited fruit is firm as a result.

PEARS: In China frost during the flowering season has caused a steep reduction in crop expectation, possibly by as much as 50%.  The season doesn’t start until end August.  

TUNA: After falling the past few weeks, skipjack raw material costs have stabilized at $1900/mton.  The FAD (fish aggregating device) fishing ban started July 1st and seemed to be instrumental in stemming the decline, but so far has not pushed pricing up.  Yellowfin catch is good and market is following skipjack.  After falling steeply at the end of 2012, Albacore has remained relatively stable for the past few months and is currently trading at $2700/mton.

PEPPERS:  The start of the Spanish pepper crop is over a month late, yet farmers still expect the overall volume to approach that of last year.  In Peru, the crop is predicted to be normal and it seems more packers are entering the market this year.   In Turkey, the crop was affected by rain; much of the raw material will go to pepper paste production.  Costs in local currency are expected to run 10% higher this year, but the devaluation of the Turkish Lira may negate the increase in dollar terms.