TUNA – LIGHT CHUNK
The three month long fishing ban on Fish Aggregate Devices (FAD’s) was lifted as September ended but catches failed to produce the increase anticipated in October. Low catches are partially attributed to management measures imposed by the Parties to the Nauru Agreement as many fleets have used up the allocated number of fishing days in certain Exclusive Economic Zones. These fleets were forced to fish in less productive waters or stop fishing completely. This agreement has a big influence on the market because the eight signatories to this agreement collectively control 25 to 30% of the world’s tuna supply and approximately 60% of the Western and Central Pacific tuna supply. The price of raw material crested the $2000/MT barrier in late September and cold storage holdings of raw material in Bangkok continued to decline. Usually this time of year sees an increase in processing activity in Thailand to take advantage of an EU duty quota but because of the high cost of raw material, major buyers have decided to wait for the price to drop. In reaction, the market is buying only small quantities to cover their immediate needs in hopes of increased catches and lower prices.
McLane Global recommends customers take a “wait and see” approach in the coming weeks. With canners in both Thailand and the Philippines struggling to secure sufficient raw material, pricing for finished product will remain firm or perhaps even increase through the remainder of the fourth quarter of 2011.
APPLES AND APPLESAUCE
The new season is just now underway and early quotes show pricing that will be much higher than last year. Demand also continues from producers of apple juice concentrate and the raw material required for canned goods is too expensive to hold down costs.
McLane Global is urging its customers to see where this seasons pricing settles but to not wait in hopes of pricing similar to last year as surplus supply is not expected to exist.
FRUITS
The canning of Fruit Cocktail in China is just underway and there are no firm indications of pricing or crop viability. The peach crop has come to an end with prices finishing as high as a 100% increase over last year.
McLane Global is advising that customers be aggressive in purchasing their requirements of all canned fruits, as availability will tighten, and prices are certain to increase as we move into 2012.
MACKEREL
Although total global production for 2011 will remain below historical levels, due the lack of any availability from South America, canned product is expected to be in good supply through the balance of this year. As stocks of spot inventory in the USA have been low, it is expected the market for canned mackerel will remain relatively stable, even as the main production season continues.
McLane Global suggests that customers take advantage of the attractively priced offers available from the canners at this point in time, and cover their needs through January of next year. It is unknown exactly when the current packing season will come to an end, and whether there will be any production from the South American canners beginning in early 2012.
MANDARIN ORANGES
Raw material costs are looking to be up 20% over the last packing season. Production is scheduled to end in early January because the Chinese New Year holiday occurs earlier this year the normal. Many buyers are waiting and buying for what they need with results pending on a court case against the anti-dumping duty in Europe. All of this information points to a market that will be short.
McLane Global recommends buying now to avoid the coming rush when the U.S. and Japanese Brands make their pricing.
MUSHROOMS
It appears the packing season in China has gotten a later start than planned. Early reports show that prices are up 10-15% over last year.
McLane Global is advising customers to that because of the late start it is too early to tell where the market will settle. We will update when more information is available.
PINEAPPLE
The Thai pineapple crop is completely in flux right now as the extent of the damage from the flooding to the winter crop will not be known for weeks. Most of the pineapple crop is grown on high ground and appears unaffected but the issues lie in getting the fruit harvested and to market on time. All of the industries that support the canners are the most affected by the flooding. Everything from ingredient and packing supplies, can makers, label printing facilities and cargo loaders at the port have limited or suspended operations. Reports are that the summer crop should be ok, ironically, as long as there is enough rain from January to March.
McLane Global strongly urges that customers consider other markets besides Thailand to fill their immediate needs. Indonesia is an option for choice quality although the bulk of their product is packed for food service sizes. Viet Nam is another option although they have limited production and mainly in 15oz cans. Chinese Pineapple is readily available for situations where choice quality is not the goal.
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