Market Report – 16th April 2013

Exchange Rates

GBP v USD 1.51

GBP v Euro 1.17

USD v TL 1.80

Sultanas

We have seen prices increase over the last two weeks. There is much speculation relating to the recent frosts in the growing regions and the amount of damage that has been caused. A recent report carried out by agronomists indicates that the frost has damaged some of the vines and this could affect the yields of the new crop. Although it is very early and the vines could have a chance to recover, there is no doubt that this will have some impact later in the year. Reports suggest that 5% of the crop could be damages and that development could be hampered.

We have seen larger quantities traded on the bourse and prices have increase in anticipation of a shorter crop. Any exporter who has a short position will be keen to cover to risk avoiding further price increases. There is still a good quantity of fruit available so overall the market is not short, but sentiment is very bullish on the back of recent news. We can expect to see this trend to continue for a while, but if the development of the crop is good then the market is likely to remain where it is or even ease back a little. In reality it is far too early to make any assessment of the new crop and we will be better placed in 2 months’ time.

Prices have increased TL 150 ($ 80.00) per mt, but it looks like that it will not rise much further than this. Turkey has exported 155,000mt to date which is 9% higher than last year, with the UK being the largest importer at 41,693, which 3700mt up on the same period last year.

Raisins

The USA market has eased back over the last few weeks, but prices still remain relatively high at around $ 1.16 cent per lb FAS. ($ 2560 per mt), although this is way off the much higher prices we have seen over the past few months there is still very little buying interest at these levels. We expect that the US will have a reasonable carry-in and if this year’s crop proves to be a good one, they will be under pressure to reduce prices further.

The Chilean market is proving to be more difficult than expected with supplies shorter than anticipated. Initially we were seeing offers in the region of $ 2650.00 for Jumbo Flame variety but this rose sharply to $ 2850.00 after it became clear the crop was not as good as anticipated , buyers rushed in to cover fuelling the market further and we have seen prices as high as $ 3200.00 per mt. A number of packers have withdrawn until they can fully assess the availability of fruit in the market, it is likely that we will not see further offers until late May to Early June, once they have processes their existing stocks and can ascertain what grades they have to offer.

There is limited availability of Raisins form Turkey and remaining stocks are in the hands of mid merchants and packers who are now looking for large premiums. Turkey has been the most competitive of the main stream suppliers and has sold very good quantities this year. With rumours of the new crop being potentially affected by some frost damage, very early forecast are for a smaller crop this year. If this is the case, growers will not be keen to produce Raisins and as such availability could be very tight going forward. With other origins significantly more expensive than Turkey, we can only expect to see the prices increase further.

Currants

Whilst we believe that there has been a modest fall, in Global consumption of Currants, this season, it is difficult to support this, with exact values, in the absence of official statistics, previously published by the industry. We estimate that exports may have fallen by 5-10%, in total. This point of view is supported by the fact that there remains a small amount of unsold raw material, at origin, in spite of the record low 2012 crop, estimated at less than 20,000mt.

It is still predicted, that the 2013 crop, may bring an increased supply, as vines planted in recent years, become productive. By the end of April, the risk of frost will have passed giving more confidence, in the prospects for new crop development.

With the majority of remaining unsold fruit, now in the hands of The Unions, or private packers, it is unlikely that we will see a significant fall in price, even if it becomes clear, that a larger crop in September is likely. Carry over from the present crop, will be negligible (if anything at all) and should anything remain, sellers will not rush to reduce offer prices, until the new crop is safely dried and stored. Furthermore, we expect that there will be early demand, for new crop Currants, which is likely to support raw material prices, of levels similar to those presently in place, at least until the final quarter of 2013 and possibly beyond.

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