Turkish Hazelnut

c/o AFI(Association of Food Industries)

Some members of the task force on this issue met June 4 with representatives from USDA and a commercial counselor at the Turkish embassy in Washington.

We met first with USDA. They had about eight people there, though five senior-level staff members did all of the talking. The consensus among our contingent was that USDA staff is correctly performing the inspections on hazelnuts. USDA staff said it’s important for us to understand there are two issues here. The first is the grade standard for hazelnuts. The second is the marketing order. The product requirements in a marketing order do not have to match the specifications of the grade standard, so they recommended that if we’re seeking to make any changes, we try to do it to what’s required in the marketing order. If we sought and were successful in getting a change to the grade standard, we would have to go through the process to make a change in the marketing order anyway.

Changes to a marketing order have to be suggested by the committee that runs the order. In this case, that’s the Oregon industry. The committee is due to have a meeting in August. The group that went to the meeting is going to recommend to the task force that AFI be given time at that meeting to explain the need for a change to the order. Of course, we have to find a way to incentivize the domestic industry to agree to suggest any changes.

Our meeting with the Turkish commercial counselor was very beneficial. It was clear that based on her conversations with others she thought USDA had made changes to the way it was conducting inspections. She and others thought the problem could be rectified simply by requesting USDA return to prior testing methods.

We are putting together a letter to be sent to the counselor and to the Turkish Hazelnut Group with recommendations/information from Jeff Abels(Foreign Trade Service) on how to address this issue at origin.

The task force is meeting via phone this afternoon to discuss next steps.

As for the request that the association put out a statement saying the USDA issue has created a force majeure situation, three law firms have told us they do not believe that is viable, though all have said it might be so for contracts specifically calling for Turkish hazelnuts. All three, though, have said they recommend such a statement be done by individual companies and not the association.

As everyone is aware, imports from Turkey for hazelnuts have been stopped by USDA, due to food safety issues and concerns.  We will keep you up to date on any changes.

- Thomas Kim

"Other" Nuts/Dried Fruits

So, I've been a bit lax in updating the blog, which I blame on the workload and lack of significant market update since the last one...(This is a lot better excuse than simple "laziness")

c/o Mr. Henry Stimler
Almonds:

Market has been strong but we all feel an upcoming lull in the market, which is to be expected since everyone is awaiting the June 30th objective report, so customers and growers are treading very carefully. Pick up what you need spot and await the numbers. Again post report we don’t think we will see any sort of a dip if anything it will just be at a stable plateau. Post report we feel the big growers will open strong and wait for market resistance or acceptance.

As far as almonds 27-30 that has moved a bit since not that much supply around currently.

Pecans:

We have felt strong movement in the recent days and weeks and the price is moving in an upward trend. The next crop is not till November 15th, and the demand for the holidays will be very high with not that much inventory meaning it will be a sellers market for old crop. Post crop we think that pricing will come down, but it seems that the freeze did some affect on crop numbers.

Pistachio:

The price is what it is and we are seeing very little fluctuation in price and don’t think we will see much movement till new crop Sept/Oct

Ginger:

Yes pricing is high right now but for forward contracting post Sept we will see a price drop and we advice to start forward booking at that time for best possible pricing.

Apricots:

Pricing has gone through the roof but we are sitting pretty having purchased very well and have a good amount of stock, if you have contracts it’s going to be very tough to get product out now at anything resembling a normal price and we think this item is going to be retired by a lot of people and retailers till next year.

We are now coming into the summer months, which are traditionally a bit slower than Q1 and Q4.  Majority of customers are now gearing up and planning for Q3/Q4.  Everyone is watching and testing the markets carefully to decide best time to commit to contracting for this year's holiday season.  Please check back with us frequently for additional updates as they become available.

Thank you.

-Thomas Kim

Cashew Market Update

It has been awhile... and not so quiet, as it seems

It is a difficult time for the cashew processors.  If the prices do not increase, then the processors can face problems down the road

During the last few years, with technological innovations, there are so many new small factories coming into the market.  There is no need for large space or capital.  They can just process cashews(steam, shell, then sell the kernels to other processors).  Because of this, the demand for RCN is trending higher.  Vietnam also exports more and more every year.

The export from Vietnam is increasing, mainly based on the supply of seeds from Africa.  With lower cost of production, Vietnam is a bit ahead of India and have enjoyed better business atmosphere.  Recently, however, some factors have changed from India

- India have imported a lot of machines from Vietnam and have begun replicating and have begun to lower production costs to compete better with Vietname
- To stop cheap broken cashews(WS, LP or SP) from Vietnam to India, Indians have applied flat duty at $1 USD/lb.  Indian processors can enjoy selling broken cashews at higher price in domestic markets
- Indian market have always had a lot of demand.

Because of these factors, this year, Vietnam processors are finding it harder to pay for RCN prices from Africa.  The RCN prices have gone up tremendously and mainly shipped to India

A. African Seeds
  Because of big demand from India and Vietnam, the prices have continued to rise.  IVC seeds seem close to an end.  Buyers are in a hurry to purchase and ship.  A good quality 48lbs, which used to trade at 900 USD/mt, are now at 1050USD/mt CNF Vietnam.  Most buyers are now competing on Guinea Bissau RCN.

B. Vietnamese Seeds
   The crop has ended, and only few small crops from northern provinces.  There is high competition for seeds.  Prices on seeds, which were trading at around 23,000 VN$/kg are now up to 25,000 VN$/kg.  For this new price level, factories are covering mainly because they do not have enough seeds to process during Q3 and are hoping(betting) that prices of kernel goes up

C. Broken
   Most buyers believe that there are a lot of broken pieces during processing.  It may be the case in the past, but improvements in procedure have lowered available supply of broken kernels.  Before, we were seeing 20% broken from processing RCN, but some processors have gotten these numbers to 12%

D. Market, western
   It looks as though US and EU buyers have covered enough for nearby, when the pricing had bottomed out.  I do not expect pressure from buyers to make purchases in the near future, though they will move if the pricing is right.


With the current market conditions, I would advise that spot purchases for your immediate needs.  I would only consider contracting options if you need to cover a certain quantity by Q4, and only at a "deal".

Thank You.

-Thomas Kim