Thursday, April 03, 2014


Situation remains ominous re negotiations to avert a July west coast dock strike.  Insiders believe that if a strike occurs, it will not last longer than 7-10 days but would still cause a backup of 350,000-700,000 TEUs of freight.  On the east coast, most of the terminals in NY/NJ last week experienced a one day shutdown for a surprise press conference held on labor relations/hiring.

USFDA proposed new rules to update the nutrition facts label for packaged foods.

Still no progress on GSP renewal and the Miscellaneous Tariff Bill.  The U.S. Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 123 designated beneficiary countries and territories.   GSP, which expired July 31, is a program with lots of Congressional support, so it’s still expected to be renewed.  As for the MTB, this is a huge bill containing duty reductions/eliminations for thousands of items.

According to a World Bank report, overall global food commodity prices have declined 18% from the all-time high set in August 2012.

CURRENCY: The dollar remains weak against the euro, with the euro hovering around 1.38 compared with 1.34 a couple of months ago.

TUNA: Skipjack pricing has continued its decline, now at $1150-1250/MT from about $1285/MT a month ago.  Most packers believe this could finally be the real bottom level for skipjack as it’s at the breakeven point for fishermen and we’re heading into the FAD ban season.  Additionally, reports of increased demand from Egypt and the Middle East have booked some packers' capacities out a few months.  Albacore pricing is clearly firming, now reported at $2900/MT from $ 2750/MT a month ago.  Yellowfin at $1950 and tongol remain steady.

PINEAPPLE: The winter crop in Thailand is winding down and Q1 2014 production has now officially been ranked the worst in 10 years, with raw material deliveries only half of normal levels.  Raw material costs have spiked to 8.00 - 8.50 baht/kg compared to a normal level of about 3.00 – 5.00 baht/kg during the season.   The summer crop, which normally starts around April, is forecasted to start a month late.  Current relatively cool weather in Thailand is affecting the growth of the pineapple plants and therefore, most packers are not expecting a usual summer crop.   Indonesia is also in bad shape with most of their troubles drought related.

PEACHES:  Recent reports forecast California’s peach season to be short again this year with lower acreage at 8,100 hectares, compared to 9,000 in 2012 and 12,800 in 2004.  This is mainly due to plantations switching to walnuts and almonds and other crops that require less labor.  CA processors have agreed to a 2014 base price of $418/ton, up 30% from just three years ago.  On the other hand, Greek farmers enticed by the recent increase in prices, have reportedly planted more peach trees that are expected to produce about 600,000 MT for the 2016/2017 crop, up from a recent average of 440,000.  As California declines, Greece grows.

ARTICHOKES: Having escaped severe weather conditions this winter, Spain’s spring crop is still expected to be a normal one.  Peru, effectively shut-out from the market last year due to high prices, is attempting to make a comeback by matching Spanish prices for prior unsold carryover stocks.  So far for 2014, Peruvian artichoke export sales are down 18%.  Peruvian pepper exports on the other hand are holding steady.

COCONUT:  Typhoon Haiyan’s effects are still being felt as coconut supply remains tight.

TOMATOES: California's processing tomato crop is expected to remain steady this year despite the drought.

MUSHROOMS: US Dept of Commerce has issued a final antidumping duty rate of 308.3% on mushrooms from China covering the period February 1, 2012 through January 31, 2013.   As always with antidumping, any increased duties are assessed retroactively to the importer of record.