Thursday, February 27, 2014


Market remains unchanged... meaning that pricing is high, and doesn't seem to be coming down any time soon.  
And then, there is the drought

The Market has been very quiet the last few weeks after the shipment report.  With the bloom inspection looking fair to good, the pricing have softened somewhat(it doesn't mean that it dropped.).  The market is reacting to not only lighter demand, but the fact that 2013 crop receipts will be 2+ billion lbs(whatever happened to 1.89 billion lbs estimated last year?) 

And then, there is the drought(Hmm...)

Not much have changed in terms of pricing or demand.  China is still a bit quiet and haven't been making any major moves. Pending any disasters, the industry is expecting record crop for 2014 from all the new plantings, but...

And then, there is the drought(Does this sound familiar?)

While there is no official report of the 2013 crop size, most in the industry believe it will come in under 180 million pounds (81,500 MT). This is mainly due to rain causing heavy damage to the group in Georgia and other southeast growing regions. Demand was strong last week for inshell into China with a large portion of the remaining inshell inventory being sold in a relatively short period of time. The price gap between halves and pieces is shrinking.

Water : I know that this may come as a shock to everyone... but there is a drought in California right now(Yeah... media, press releases, blogs have all been quiet on this one.  Please add your own healthy dose of sarcasm...) With zero allocation on water, there is still water enough for this year's crop.  It will just cost the growers a bit more to get it.  Next year, however, may be a bigger issue.

I remember last year, it was the "Not enough bees to pollinate!!  OMG! We need to raise the prices!'.  The year before that, it was the "There's frost damage!! OMG! We need to raise the prices!".  The year before that... Is it just me, or is there a pattern?  You know, if you cry wolf too many times....

-T. Kim

Tuesday, February 25, 2014

Dehydrated Fruits

In general, the weather in Thailand is moving to summer period after long time cool temperature from last year. A lot of plantation area currently does not have enough water supplies for their plants especially in the North and Eastern part of Thailand. Thai government report that the drought situation this year will become severe if there is no rain during these couple months.

Please find below our market update for your reference.

-          Pineapple quantity is reduced as per our estimation. The main season is already finished. Pineapple raw material price is starting to increase now due to shortage period. The second crop will available again during April-May/June (small crop). However, the crop size will depend on the water / rain as well. Please consider to build up pineapple in inventory before June. Expect price will be slowly increasing according to market.

-          Pineapple core, there is no improvement of Pineapple core situation same as Pineapple. We still confirm our recommendation to consider in building up inventory for Pineapple core product before off season. Price adjustment will be need as raw material price increase. We expect shortage from June-October. New coming season will be in October.

-           Papaya natural red, our production managed to find suitable supplier per our required quality during January. However, the season of Papaya is about to finish so we can only buy some quantity to average our cost this year. We are currently bringing down our offer price for natural red papaya to reflect our cost. Please consider master contract for this season accordingly.

-           Papaya raw material for color added, price remain high compared to last year. We expect raw material should be shortage before new coming Papaya crop in late August / September 2014.

-          Mango, season will start in late March / early April. We will keep you posted on mango situation again during March. Our inventory of mango should be able to cover our usage till the new season arrives. We estimate availability should be similar to last year as season arrive earlier. We also expect the price will be stable as current pricing.

-           Ginger, due to we received high demand of ginger from various customers this year. Our current raw material in inventory is already near finish. We will have to put our offer on hold during this period to recheck our stock. New season of ginger will be in August. Quality and crop size still not yet known. We will keep the market posted on ginger accordingly.

-          Cantaloupe, season is about now. Price still firm at high level.

-          Kiwi, due to high demand of kiwi order from last couple months, we expect that some shortage may be seen before new kiwi season in October.

-          Strawberry, raw material in our inventory is now finished. New strawberry season will be in June / July. First available shipment will be in August / September. Will keep you posted soon after we received update information on this item.

External Factors
·         Unease political situation in Thailand still keep on going. The new election is still not success with many obstructions. Farmers also have consequence effect due to shortage of money from the government project on the rice policy.
·         Many government offices cannot operate their work as normal situation due to protestors try to close the entrances and not allow officers / people to get into. However, the business activity still keeps on going as usual. Only some delay in getting document from government office may be seen in certain period.
·         Thai Baht fluctuates between 32.20-32.80 THB/USD. This may help in slow down the price increase.
·         Freight rate still stay at high level from January 2014.

There are more market updates available on apple, star fruit, peaches, guava, coconut, etc.  There was too many for me list here.  If you need a specific market update, please contact me directly.

-T. Kim

Monday, February 24, 2014

Just how much water...?

Please find below, amount of H2O required to cultivate...

Below is the current "Drought Monitor", detailing how bad each region is.

And if we check the growing regions...

It all adds to "you need to open your wallets a bit wider" at the grocery checkout lines... either that or "No, you can't have a bag of walnuts for your snack... how about some Twinkie?"

Wednesday, February 19, 2014


Bolivia flooding conditions

Brazil nuts will not be shipping out anytime soon.

So... drought in California, flooding in Bolivia, and I'm getting snowed in New York.  Is it just me or does it seem like we're getting more of these now?

Tuesday, February 18, 2014

Farmers vs Tree Huggers

This is sure to cause flames....

... Reduced water allocations will also have an impact on school and governments in the Central Valley, said Fresno County Supervisor Phil Larson, by leading to farm workers leaving the valley and taking their children out of the schools. Reduced farm spending will also mean less revenue for local businesses and reduced tax receipts for local governments.
“I can tell you right now the biggest threat to farming and industry in California is the Endangered Species Act,” he said. “They can declare a critter endangered whether they see it or not. They say you have the habitat so it must be there, and you must mitigate it. Then they ask the farmers to pay a penalty because they can’t farm that land. How can that be right?
Larson agreed the Central Valley needs the water from Temperance Flat Dam. “I had a reporter tell me we did not need storage because we were going to get all this rainfall from climate change. I told him you made my point because we need to be able to capture that rainfall when we get it, and for that we need storage.”...

As handler/member of the food industry, I see and understand the plight of growers and farmers.  This is their livelihood and they need to put food on the table for their family. (Although in case of almond growers, it's a choice of paying off their yacht, or buying that second vacation home in Belize)

With the amount of damages that we've caused the environment so far, I am not sure if backtracking on our environmental/conservation laws are the best option.   

-T. Kim

Cashew Update

Indian and Vietnamese cashew market remains very quiet, with poor demand and sales for kernels.  Prices remain stable and there is a whisper of news that kernel prices may weaken below the current level as the harvest season approaches.

There are big lots of new seeds that are coming out to the market(RCN : Raw Cashew Nut), but the price is too much for the processors to pick up.  The RCN has hit a high record and it is very risky for packers to cover when the kernel market is weak

Well, at least there's SOME news.  Cashew may be only nut that's declining in pricing right now... instead of pecan pie, how about some cashew pie!...(someone should really come out with a recipe for that)

-T. Kim

Thursday, February 13, 2014

Walnut Shipment, January 2014


The final California 2013 walnut crop has been set at 490,554 tons, 5,000 tons less than the 2012 crop.

The Chandler crop came in at 226,055 tons compared to 207,413 last year. Howards was 69,577 tons compared to 60,259 tons from the 2012 crop.  The Tulare tonnage was 63,235 tons, about 4,000 tons less than last year.

As expected, the Hartley crop was down about 5,000 tons (52,089 tons) which I believe is a record low tonnage in decades.

It is still too early to report on the upcoming 2014 crop but there are some concerns regarding the California water conditions.  Although the Central Valley received a nice storm last week which resulted in several inches of rainfall, California is still more than 50% of normal.  However, there is another weather front forecasted for this weekend and hopefully, we will see some additional rainfall from this storm also.

Again, not sure how the drought will affect the 2014 crop, but it would be a good guess that it will not help...

January inshell shipments were 22.9 million pounds, up 2.7 million pounds from last year. Shelled shipments were 25.6 million pounds, down 1.3 million pounds from last year. Total January shipments were 40,308 tons (inshell equivalent) compared to 40,451 tons last year

The total year to date shipments (inshell equivalent) is 299,845 tons, compared to 293,135 tons at this time last year.

With the current shipments about 7,000 tons ahead of last year, and the fact we have 5,000 tons less tonnage, I see no reason we should not sell this year’s crop by August.  If so, this would again give us about 49,000 ton carry-over, which is about what we need to fulfill September commitments.

Walnut Shipments Recap 

Month (Jan)            2012/13      Year to Date      2013/14     Year to Date     Percent

In-shell (lbs.)             20,389            247,830              22,923      263,608             6.3 %

Shelled (lbs.)             26,867            150,267              25,558      148,884            -0.1%

Total Tons               40,451             293,135             40,308       299,845             2.3%


Basically, the walnut market has been floating the past month or so, with very little movement one way or the other. I believe this trend will continue…that is unless China comes back in heavy after the Chinese New Year.  In any event, the strong January shipments will also help solidify the market which I believe will stay status quo, at least for the next month or so.

Inshell Jumbo/Large chandlers are trading on both sides of $2.23, with Tulare’s/Howards still in the $2.10 to $2.15 range. Jumbo/Large Hartley inshell are on both sides of $2.05.

Chandler LHP 20% on both sides of $5.00, depending on the packer’s inventory position.   LH 80% still around $5.45.

Regular LHP is trading at $4.80 with CHP getting close to $4.60.  With the additional availability of inventory of Medium and Smaller material, the prices are now about the same as the halves and Pieces market. 

As for the forward market I don't believe the market will move much one way or the other that is unless China comes back with heavy bookings...

c/o Pete

My thoughts on the walnut market : 
They've learned very well from almond industry... They, along with all the other agri-industry in CA, will be riding the threat of "drought" and "China", all the way to the bank.

Current expectation is that we may see a repeat of last year, IE rising prices during summer season due to "lack of availability".

-T. Kim

Wednesday, February 12, 2014

Almond Shipment, January 2014

Please find the shipment numbers from January 2014

Domestic Shipments for the month were 52.25mm lbs. or +17% of Jan.’13 shipments which totaled 44.65mm lbs.

Domestic Shipments crop year to date were 317.9mm lbs. or +12% over previous crop year shipments of 284.9mm lbs.

Export Shipments for the month were 108.0mm lbs. or -3% vs. Jan.’13 shipments of 111.9mm lbs.

Export Shipments crop year to date were 752mm lbs. or +2.8% vs. crop year to date last year shipments of 731.4mm lbs.

Total industry shipments for Jan.’14 were 160.3mm lbs. or +2.4% of Jan’13 shipments which totaled 156.5mm lbs.

Crop year to date shipments are 1,070 billion pounds or +5.3% of last crop year to date shipments of 1.016 billion pounds.

January’14 shipments were a record for January and the 4th monthly record this crop year.  Year to date crop receipts are 1.98 billion lbs.

Crop is approx.. 67% sold, which is just above the 5 year average of 65%.

I had a interesting email from one of our suppliers...
Me : ... Please advise on what effect will this(report) have on prices
Vendor : ... Up Up and Away~!...

Well, I'm glad that one of us is happy about the rising prices...

-T. Kim

HR 3964

c/o Raju Chebium
Gannett Washington Bureau

Washington DC

A Republican bill that would increase the amount of water available to farmers in CA's Central Valley, passed the GOP-majority House on 229 - 191 vote.

The measure would increase the share of water farmers and dairy producers could access under Central Valley Project, a federal water-management effort launched in 1933 to combat chronic shortages. Under the bill, the increased agricultural quota would result from the elimination of the allotment for the San Francisco Bay Delta to improve the habitat for Delta smelt and other fish.

The bill's backers said they want to help the region's economy and keep food prices low for consumers across the U.S. Critics said the measure would overturn state and federal laws and established science.  Central Valley producers have long resented water rationing and want to increase the amount they can use. Environmentalists say the smelt is a barometer of the San Francisco Bay's health and have gone to court to preserve water shipments from Central Valley.

The tension between the two sides has increased as California's drought has worsened -- and was reflected in the heated floor debate between California's Republican and Democratic House members.

-T. Kim

Friday, February 07, 2014

Rain or No Rain.. which do we want?!

Drought update

This weekend, the forecast for northern California calls for 1 - 3+ inches of rain/snow.  While this is relief for region suffering from the effects of a long running drought, the timing couldn't be worse.

Farmers, ranchers, environmentalists ... and Politicians have all been praying for rain or snow in California.  However, we really don't need it rain during the bloom season for the almond trees!!!!  This hampers the flowering and pollination for the almonds trees.

(On a side note, everyone last year was talking about how there weren't enough bees.  This year, that bit of news hasn't made headlines.  It's primarily because there is a bigger concern... lack of water.  They'll be talking about this one if and when the drought issue is resolved)

There is another concern that affects other products in the nut/dried fruit industry.

Growers usually plant and cultivate multiple crops.  Almond growers generally also grow figs, prunes, etc...
With the high prices(yes, I can hear everyone moaning about this one) of almonds, there is a bigger profit margin on growing almonds vs growing "just about anything else".  With only a limited supply of irrigation... I'm sure you can see where I'm going with this one.  Growers are pulling trees and planting almonds, walnuts or pistachios.

These are tree nuts, and tree fruits.  They are not row crops like corn or wheat, where you can just "skip" a year and continue next year  They take time before they are mature to bear fruit.  With the rising costs and lack of availability on irrigation, we will see problems becoming worse, before it gets better.

-T. Kim

Monday, February 03, 2014

California Officials forecast "Zero" water deliveries

Basically... the news isn't good and its not improving

State officials announced Friday that 29 water agencies serving 25 million people across California can expect “zero” water deliveries from the State Water Project this summer because of the worsening drought.

Although that delivery projection could change, it is the first time a “zero allocation” forecast has been made in the 54-year history of the State Water Project, which is operated by the California Department of Water Resources and typically delivers Sierra snowmelt to cities and farms throughout the state.

The decision was among several emergency measures announced Friday to deal with a persistent statewide drought that has left the California mountain snowpack at just 12 percent of the January average.

The “zero” forecast affects urban and agricultural areas from San Jose to San Diego that depend in part on water diverted from the Sacramento-San Joaquin Delta. Most of these areas have other water sources to draw from, including local reservoirs and groundwater wells.

The State Water Project serves about 750,000 acres of farmland. Most farmers have access to surface water and groundwater, including private wells, and it’s common for them to be given short allotments in drought years. Before Friday’s announcement, the State Water Project delivery forecast was only 5 percent of the maximum amount allotted in its contracts with water agencies.

Even so, the announcement assures further conservation measures will be required, and may press some farmers to fallow land. Farms consume about three-fourths of California’s freshwater supply.

The federal government operates a separate Delta water diversion system, the Central Valley Project, which is not affected by the state forecast. Its delivery forecast is expected later this month.

“This is the most serious drought we’ve faced in modern times,” said Felicia Marcus, chairwoman of the State Water Resources Control Board, which approved the emergency measures. “We will have to collaborate our way through this as never before.”

State and federal officials announced that starting today, water diversions from the Delta, a crucial wildlife habitat and California’s largest freshwater source, will be minimized to serve only urban areas and health and safety purposes. No water will be diverted for farms.

In addition, some 5,800 junior water rights holders across the state – mainly farms – will receive notices next week that they must reduce their water diversions from streams. And water quality rules in the Delta will be adjusted, which will increase salinity for some water users in the region and may affect wildlife.

“It’s a very serious situation,” Terry Erlewine, general manager of the State Water Contractors, said in a statement. “Across the board, water districts are ramping up conservation and efficiency efforts to go beyond the conservation achievements already made.”

The zero delivery forecast does not affect water users in the Sacramento region, who are not served by the State Water Project. But the capital area faces its own shortages and is enacting broad conservation measures.
On Thursday, for instance, the board of directors of the Placer County Water Agency will vote on an emergency declaration and call on customers to reduce water consumption by 35 percent. It will also consider an emergency public works project to install temporary pumps and piping to improve access to water from two existing wells.

The Delta water quality rules are being adjusted so that state and federal agencies can preserve water stored in reservoirs, primarily in the Sacramento River watershed. This will ensure that water is available, in the event the drought continues, to deliver to people in the hot months ahead and to ensure salmon and other fish can survive in the rivers.

“Today’s action means everyone will get less water as a result,” said DWR director Mark Cowin. “There’s simply not enough to go around.”

Another change allows water agencies to open the Delta Cross Channel Gates near Walnut Grove. Those gates divert a portion of Sacramento River flows into the interior Delta, where it is then diverted by state and federal pumps. Open gates mean less fresh water will flow out of the Delta to San Francisco Bay, and portions of the western Delta will become saltier. But officials said they expect those western Delta waters will still meet drinking water standards.

The gates are normally closed at this time of year to ensure that young salmon migrating downstream to the ocean are not sidetracked. Opening them now means those salmon are more likely to be eaten by predators in the interior Delta or killed in water diversion pumps.

Officials may adjust the gates daily to avoid harm to salmon. Juvenile salmon are prone to migrate during daylight hours, then seek protected areas and stay in place at night. So the gates may be opened only at night, when salmon are less active.

The water board, which oversees water quality and water rights statewide, plans to review all the changes on an ongoing basis and amend them as necessary. It also plans to beef up its enforcement reach. Tom Howard, water board executive director, said some employees would be retrained to do inspection work in the field to ensure junior water rights holders heed the curtailment order.

Local agencies that depend on the State Water Project greeted Friday’s news with alarm. Many expected a low allocation, but zero was a shock.

“I never though in my entire career I’d see a zero allocation,” said Jim Beck, general manager of the Kern County Water Agency.
Beck has worked for the agency for 30 years. It is the largest agricultural water contractor in the State Water Project system and also serves urban areas including Bakersfield, Taft and Tehachapi. He said farmers will be able to draw from a vast groundwater banking system operated by the agency and, in some cases, from private wells.

But that water won’t go far enough, he said, and many farmers will be in “survival mode” this year.

“Our growers are going to have to make really tough decisions on which crops they can fallow and which trees or vines they can take out of production,” Beck said.

Marty Lugo, spokeswoman for the Santa Clara Valley Water District, said her district was hurting even before the announcement. The district holds State Water Project contracts for as much 100,000 acre-feet of water each year. Until today, its allocation for this year was 5,000 acre-feet – about 1 percent of the water distributed by the district.

“We already expected we would get a small amount, if any at all,” Lugo said, adding that annual water demand for the district is 365,000 acre-feet.

The district has taken steps to cut water usage by 10 percent. Its groundwater supplies are expected to drop below 300,000 acre-feet by the end of the year.

At nearby Alameda County Water District, about 40 percent of water supplies typically come from state allocations, said assistant general manager Robert Shaver. “Obviously, it’s a pretty serious situation whether it’s at 5 percent or zero percent,” he said. “We had kind of been expecting that it would go to zero percent.”

To make up for the lack of water from the state, Shaver’s district will rely more heavily on groundwater. Those supplies will be tight, he said, as the year progresses. The district has asked customers to cut water use by 20 percent.

Bill Jennings, executive director of the California Sportfishing Protection Alliance, worries that the emergency changes, along with the drought itself, could push some imperiled Delta fish species toward extinction.

“Yes, fish are going to suffer. Population crashes occur during these periods,” Jennings said. “We can cast blame, but we’re in this situation and they don’t have a lot of leeway. Everybody’s going to pay a price this year.”

Source : The Sacramento Bee