Thursday, July 31, 2008


Food industry bitten by its lobbying success
By LARRY MARGASAK Associated Press WriterWASHINGTON — One of the worst outbreaks of foodborne illness in the U.S. is teaching the food industry the truth of the adage, "Be careful what you wish for because you might get it."The industry pressured the Bush administration years ago to limit the paperwork companies would have to keep to help U.S. health investigators quickly trace produce that sickens consumers, according to interviews and government reports reviewed by The Associated Press.


In this Feb. 2, 2007 file photo, Former Health and Human Services Secretary Tommy Thompson speaks at a political forum in Henderson, Nev. Thompson had pushed to increase the number of food safety inspections, and is now part of a coalition lobbying to increase the FDA budget and turn around several years of stagnant spending on food. Thompson has acknowledged he had to compromise when the food industry opposed tough food tracing and record-keeping rules. (AP Photo/Jae C. Hong, File)The White House also killed a plan to require the industry to maintain electronic tracking records that could be reviewed easily during a crisis to search for an outbreak's source. Companies complained the proposals were too burdensome and costly, and warned they could disrupt the availability of consumers' favorite foods.The apparent but unintended consequences of the lobbying success: a paper record-keeping system that has slowed investigators, with estimated business losses of $250 million. So far, nearly 1,300 people in 43 states, the District of Columbia and Canada have been sickened by salmonella since April.Investigators initially focused on tomatoes as a culprit. Now they are turning attention to jalapeno peppers.A former member of Bush's Cabinet and three former senior officials in the Food and Drug Administration told the AP that government food safety experts did not get the strong record-keeping and trace-back system originally proposed under a bioterrorism law to cope with a major foodborne illness."In retrospect, yes, if they (the regulations) had been broader and a bit more far-reaching, it could have helped with this," said Robert Brackett, senior vice president of the Grocery Manufacturers Association. "It wouldn't have hurt, for sure." Brackett formerly was a top safety official at the FDA.Under pressure in 2003 and 2004, the White House agreed to dilute record-keeping proposals by FDA safety experts."If the FDA had been given the resources and authority years ago that it asked for to solve these kinds of problems, I think we would have solved this already," said William Hubbard, a former FDA associate commissioner.Tommy Thompson, who was health secretary during the industry's lobbying campaign, acknowledged that a more robust food-tracking system — opposed by business groups as too expensive — could have helped stem the current illnesses and business losses."We went in with the larger package but knew we had to compromise," Thompson told the AP. "I was satisfied with this being the first step. It's always better to be a Monday morning quarterback. We could have ended up with nothing. If we had more, would it help the situation now? Yes."According to government records reviewed by the AP, business groups met at least 10 times with the White House between March 2003 and March 2004, as the FDA regulations were under debate. Food industry lobbyists successfully blunted proposals using arguments familiar in other regulatory debates: The government's plans would saddle business with unnecessary and costly regulations."The FDA's strong proposed bioterrorism rules were significantly watered down before they became final," said Caroline Smith DeWaal, food safety director at the Washington-based Center for Science in the Public Interest. The private advocacy group obtained the White House meeting records under the Freedom of Information Act and provided them to the AP.Participants in the meetings included companies and trade groups up and down the food chain, including Altria Group Inc. and Kraft Foods Inc., when Altria was Kraft's parent; The Kroger Co.; Safeway Inc.; ConAgra Foods Inc.; The Procter & Gamble Co.; the American Forest and Paper Association; the Polystyrene Packaging Council; the Glass Packaging Institute; the Cocoa Merchants' Association of America; the World Shipping Council; and the Food Marketing Institute.The Grocery Manufacturers Association spent $2.6 million on lobbing in 2003 and 2004, the period when the FDA rules were under consideration, according to federal lobbying records. The Food Marketing Institute spent $1.7 million during the period. The figures were for all lobbying by the trade groups and on their behalf.The grocery group complained during the comment period that the FDA was overstepping authority that Congress had granted under the new bioterrorism law. It said the FDA wanted a "cradle-to-grave record-keeping system" to track every morsel of food delivered to every retail grocery shelf and said more tracking information does not always produce a better result.The marketing institute said a proposed tracking system as envisioned by the FDA "would be exorbitantly costly."The food industry now says it will agree to a better tracing system operated by the government, as long as the industry can advise how to design it."We support the government requiring industry to have traceability systems that are effective and work," said Jill Hollingsworth, group vice president for food safety programs at the marketing institute. "But industry has to come up with a system that follows products throughout the food chain."The FDA official in charge of the current salmonella investigation, David Acheson, said the agency slowly is reviewing paper records to help trace tainted produce. But Acheson disputed arguments that an electronic records system would necessarily have helped investigators."We still haven't managed to figure out this outbreak," he said in an interview days before the case's biggest break — discovery of a tainted Mexican-grown jalapeno in a southern Texas warehouse.The White House Office of Management and Budget defended its meetings with food industry groups in 2003 and 2004, saying it regularly meets with companies and individuals with a stake in proposed government rules."Our door is open for anyone — from non-profits, industry representatives to individual citizens — who request meetings on regulations," OMB spokeswoman Jane Lee said. "These are listening sessions in conjunction with personnel from the regulating agency and we publicly post these meetings online."

Monday, June 23, 2008

Unbridled Cashew Speculation - History Lesson 102

June 20, 2008
By David Rosenthal
"Enhancing" contracts?
On May 28th members of the Association of Food Industries Nut and Agricultural Section met with diplomats at the Vietnamese Embassy in Washington DC to discuss the magnitude of cashew defaults from Vietnam over the past several months. It is reported that approximately 2000 container loads have been defaulted on by Vietnamese cashew shippers between November 2007 and April 2008. These actions by the Vietnamese shippers have had a major impact on cashew prices with some grades increasing by over $2.00 per pound. Importers are being forced to pay 'enhancements' in order to have their contracted product shipped. This puts the importing community in a position to lose millions of dollars, depending on the volume of contractual obligations to roasters at lower market prices. Several importers who had agreed to these enhancements have been caught off guard when shippers again refused to ship already renegotiated containers unless they agreed to further increases to the enhancements as a result of higher market prices at the time of shipment. Diplomats at the Vietnamese Embassy gave very little hope to the importers and roasters who attended the May meeting. They asked for the AFI members affected by the defaults to have sympathy for the suppliers who have suffered due to higher production costs, increases in raw material and high inflation rates. One roaster commented that he could understand the plight of the Vietnamese cashew suppliers if the enhancements were a one time event, but that asking for further enhancements to release shipments was unsustainable. Three weeks have passed since this meeting and in this short time the FOB price on 320's has moved up by almost $0.35 per pound.

Flashback to 1999
Industry wide defaults by cashew suppliers are not new to the industry. In 1999 Indian shippers defaulted in unprecedented numbers, resulting in tremendous market increases, and huge losses were absorbed by the importing and roasting community. Ironically, these actions by Indian shippers resulted in increased support of the Vietnamese cashew industry. Now that we have experienced this behavior from both major cashew producing countries we may have to reassess the way we conduct business, as taking forward positions has proven to be a very risky venture. Understandably this is a difficult proposition since retailers continue to demand long term contractual agreements to lock in pricing, in some cases for more than one year. With a market certainty time frame of approximately 3 months, the speculative nature of the business has always presented a risk for the cashew commodity trader. Traditionally, if a trader called the market wrong he stood to lose a great deal of money. In today's environment, the trader runs the risk that, even if he calls the market right, his profitable forward position may turn out to be a worthless printout of uncollectible contracts.

Speculative Trading Now Riskier
The current conditions in the cashew market clearly indicate the high price paid for aggressive speculative trading practices from unreliable sources. The desire to get the lowest price sends many importers to small, poorly funded suppliers who not only have questionable manufacturing practices, but also have proven to be unreliable when markets go against them. The ripple effects of this behavior became so far reaching this year that even major Vietnamese suppliers that have been historically reliable caved in to the temptation to demand "price enhancements" in order to fulfill contractual obligations.
Hard Lessons
The cashew industry has experienced the same devastating events twice within one decade. Price increases of over $2.00 lb. are bound to have a negative impact on business with retailers - indeed cashew consumption is already down as consumers, faced with increased fuel and food expenses, cut back on snacks and luxury items. No one in the importing or roasting sectors is benefiting from the present conditions. The great American philosopher, George Santayana once said "Those who do not learn from history are doomed to repeat it". We've had two hard lessons - do we really want to continue on this path?

www.cashewconcern.com

Wednesday, June 18, 2008

Cashew prices firm up on lower global output

Vietnam, Brazil, Indonesia may witness fall in crop
Ground realities
Some crop damage has been reported from the major producing regions such as Kerala and Mangalore due to incessant rains.
Firm price trends likely to persist till the end of the current year
Our Bureau
Kochi, June 16 Cashew prices have begun to firm up on projections of lower production in Brazil, Vietnam and Indonesia this year.
Raw nut production
Raw cashew nuts production for 2007-08 is expected to be lower by 20 and 10 per cent in Vietnam and Brazil respectively, while the Indian crop is expected to be normal, the Cashew Export Promotion Council of India (CEPCI) has pointed out.
Preliminary indications are that shortfalls are expected from the Indonesian crop as well.
Increased global cashew consumption and greater consumption from India are also expected to contribute to the firm price trends.
Some crop damage has been reported from the major producing regions of the country such as Kerala and Mangalore due to incessant rains. Prices, which had been reigning low for close to a decade have begun to climb back to the peaks of 1999.
Record price
F.o.b prices of cashew grade W-320 have risen to $3.04 a pound in April, closing in on the record price of $3.16 a pound attained in August 1999.
Prices had subsequently touched a low of $1.66 a pound during March 2003. The price spurt of 1999 was mainly contributed by rising domestic and global consumption, CEPCI said.
Rise in acreage
However, there has been significant growth in area and production of cashew since then. The area under cashew registered a growth of 4.2 per cent to 8.5 lakh hectares and production grew by eight per cent to 6.2 lakh tonnes in 2007-08, as against the previous year. This is far ahead of the 7.06 lakh hectares under the crop and 5.2 lakh tonnes production of 1999.
On the processing front, import of raw cashew nut this year was reported to be 6.05 lakh tonnes and the kernel exports stood at 1.14 lakh tonnes. The domestic consumption is also expected to be higher this year on account of increased disposable income of the people and better health awareness. Though raw cashew nut imports have risen this year, kernel exports have dropped due to the sharp appreciation in the value of the rupee.
Trend to persist
Going by the present trends in production, consumption and growing purchasing power in the hands of the consumers, industry sources were optimistic that the firm price trends would persist to the end of the current year and future trends would become evident with the next crop.

Monday, June 16, 2008

India: Cashew nut union leader shot dead this is really getting ugly

India: Cashew nut union leader shot dead at ChatrapurIn a stunning incident, K Srinivash Rao, a union leader of cashew nut traders has been shot dead on broad day light at Chatrapur, the district headquarter town of Ganjam on Saturday. According to the cashew nut traders of nearby areas who were gathered at the post mortem centre at MKCG Medical College, two miscreants riding on a motorbike on the highway alleged fired two rounds at him from the back when Srinivash along with U Ramesh, a businessman returning from the factory in Chatrapur.The local people in Chhatrapur says the fateful incident took place at around 7.30 am near the Ujuli maa temple, outskirts of chhatrapur. Srinivash, president of the Ganjam district union of cashew nut traders has received two bullets; one below his neck and another at back near backbone. He had been taken to the hospital at Chatrapur and then shifted to the MKCG Medical but declared dead after some time in MKCG.Ramesh who was shocked after seeing the deadly seen lost his consciousness after some time of the incident and was not in a condition to reveal all the details about the murder. Meanwhile National Congress party (NCP) leader Rabi Rath demanded a crime branch inquiry into the murder of Srinivash, adding that he was very popular among the local businessman.

Monday, June 02, 2008

Weekly Cashew Update

May 31, 2008

The Cashew market is entering uncharted waters. There has not been much activity this week but undertone is very firm. Business has been done W240 around 3.45, W320 between 3.20 and 3.25, W450 around 3.00-3.05 FOB from India. Most of the business in W320 was with USA for shipments upto Sep but there were reoorts of some business for forwards as well. Stray business being done to off markets few cents higher.

Some processors in Vietnam have been selling few cents lower than India but business being done only for nearbys. Shipments of old re-negotiated contracts is reported to be slow. Buyers say they come to know price they have to pay for each lot only when it is actually shipped !

RCN prices have also moved up. Price for some goods shipped and under shipment are being re-negotiated. Some traders are re-selling afloat parcels at higher prices to other buyers. RCN still available in IVC are with lower yields. Situation in Guinea Bissau is very messy. Over 50,000mt have arrived in port but very small quantity has been shipped. It is reported that sellers are holding buyers to ransom, playing one against the other. Already, re-negotiated prices are about 300 dollars per mt (equiv to 60 cents per lb, kernel basis) higher than original prices and it is still not certain what prices will finally have to be paid to get the goods.

For the time being, buyers (RCN and kernels) have no option but to keep buying what they need to fulfill their delivery commitments. It will be several months before things come close to normal flow of supplies.

If - and only if - demand slows down significantly in coming weeks, we can expect some stability in prices this year; otherwise the firmness will continue till end of the year. And If current firmness continues till beginning of last quarter, RCN prices will be high in Brazil + Indonesia + East Africa leading to higher prices in first quarter 2009 as well.

We will be entering the third quarter - which is traditionally a busy period - with lot of uncertainty and consequent volatility. Next few months are going to be very difficult for all stakeholders – instability distorts trends and decision making becomes difficult

Would appreciate your comments on market situtation, views & forecast of demand & market trend and any other news / info AND opinion

Regards
Pankaj N. Sampat
Mumbai - India

Tuesday, May 27, 2008

Peanut Update


Good Friday morning,

Attached is link to a Peanut Planting Report for the SE.
I hope you enjoy the photos and the information.
Have a nice Memorial Day weekend.

1 person killed, 1 wounded

1 person killed, 1 wounded Another attack on cashew harvesters in SenegalArmed men opened fire on a group of villagers as they tried to harvest cashew nuts Thursday in southern Senegal, killing one person and wounding another, authorities said. The attack came two weeks after a group of armed men rounded up about 20 villagers in the area and sliced off their left ears with machetes in a warning to leave the cashew trees alone. Cashew nuts, one of the restive Casamance region's more lucrative crops, are regularly harvested by villagers, bandits and rebel fighters struggling to survive in the bush.The villagers were attacked Thursday morning outside the village of Baraka-Bounao, near the country's border with Guinea-Bissau, said Lucien Gomis, president of the rural department that includes the village. Police confirmed the incident. Military officials said the villagers went out to harvest without asking for a military escort, as officials have recommended. "Our people in the zone were alerted by the sound of shooting," Lt. Malamine Camara, a regional spokesman, said. Camara said the shooters had left by the time his men got to the site.It was unclear if any organized group was behind the attack. Victims of the previous attack had said their assailants claimed to be rebel fighters with the Movement of the Democratic Forces, which has waged a low-level insurgency against Senegal's government since 1983. The group denied any involvement in the attack.Casamance, separated from the rest of Senegal by Gambia, has been plagued by sporadic violence for years as rebels fought for independence and against each other. The region also is sown with land mines, and bandits regularly attack vehicles on its roads. More than 1,200 people have been killed in more than two decades of fighting in the region.Source: iht.com

Monday, May 19, 2008

Weekly Cashews Update

May 17, 2008

Cashew prices moved up a few cents this week due to lack of offers. Some business was done at the higher prices e.g. W240 around 3.25, W320 around 3.05 FOB, W450 around 2.85 FOB for shipments upto Oct.

From India, limited quantities are available for nearbys and due to the high RCN prices, there is very little interest to sell forward positions. Business with Vietnam is for nearbys only as buyers willing to buy forwards from very few processors there.

Normally, forward trading should be at peak during this main harvest period but due to the high prices & uncertainty everybody wants to play it safe PLUS number of forward players is limited due to the overhang of recent problem

Until inventory levels and supply lines come back close to normal levels, it will be very difficult to know the real usage & demand trends. Increase in all costs and general increase in prices of all commodities will also have some impact on the Nuts sector - price as well as demand. This means that taking forward positions will continue to be difficult for both sellers and buyers

Guinea Bissau RCN prices have moved up but these levels cannot be supported unless kernel prices move up as well. If kernel market softens or demand slows down, traders will find it difficult to realise the high prices being negotiated now. Despite a good crop, shipments from IVC continue to be slow and there are reports that yields of goods now arriving in Abidjan are quite low

We continue to feel that short & medium trend will remain firm and this could well spillover into early 2009 (the last time prices crossed 3.00 – in 1999 - they remained around that level for about seven months from May to Dec and started declining from Jan 2000 with the big decline happening only in 2nd and 3rd quarter of 2000)

Would appreciate your comments on market situation, views / forecast of demand and market trend and any other info / news

Regards
Pankaj N. Sampat

Wednesday, May 14, 2008

Pecan Market Update May 5,2008

Cold storage holdings for the month of April were reported to be 331,339,000 pounds. This is a slight increase of 3.5 million Pecan pounds. This should be the peak. If history repeats itself, we most likely will begin reducing the cold storage holdings in April all the way through September – deducting what would appear to be around 160 million pounds. If so, the carry out would be approximately 171 million pounds at the end of September – which is high.

The uncharted waters that we have been mentioning in our recent market updates appear to be realistic. Here we are with a large cold storage number and what also looks like will be a large carry-out but the market remains very strong along with some sizes and grades being very short – particularly with halves.

It appears the reasons for this being the case are as follows:

We are going into the off-year; although, it’s too early to be sure of how short the crop will be. We will keep you informed.
Consumption of Pecans remains strong; furthermore, we are still getting heavy interest from customers still needing to contract needs for this year.
Walnut pieces remain strong and customers continue to look at pecans as an alternative supply.
Customers, for the most part, contracted solidly through December 2008.
Inshell pecans continue to be held to supply already written contracts. With that, inshell is still being held by growers and some shellers for China to cover their needs until new crop becomes available to ship.
China’s usage remains strong. The commerce department reported 29,432,578 pounds of inshell pecans have already been shipped to the orient through the month of February. The guess is that China will buy about 15 to 20 million more pounds between the end of February through the month of September of 2008.

It is definite that the uncharted waters are in full swing. As always and more than ever, proceed with caution.

Kind Regards,

Sam DiGregorio
Southwest Nut Company

Thursday, May 08, 2008

Almond Crop Estimate 7 May 08

Almond Crop Estimate 7 May 08

Dear Friends:

1.46 Billion Lbs—that’s the almonds crop estimate released today by the Almond Board and USDA Calif Ag Statistics Service compiled from a grower survey of 251 growers representing 18% of the acreage. The estimated yield of 2212 lbs per acre on 660,000 estimated bearing acres would give us the 3rd record crop in a row and a yield just short of last year’s 2241 lbs/acre record.

Most in the industry were expecting an estimate in the 1.3 to 1.4 billion lbs range, so this estimate is a surprise on the high side. There may be some softening of prices in the short run in the Calif varieties. Nonpareil are hard to find now, so I would not expect and price reductions. In the long run, I expect the market can handle this crop size. We have a history of shipping more than expected when supply is available and prices are reasonable as they are now. Almonds are the lowest priced tree nut and many of the others are over 3 and 4 USD/lb.

Tomorrow we have a position report with April shipments. At that time, I’ll make another report with some crop inventory projections and comments on price reactions to the crop estimate.

Best regards, Ned

Monday, May 05, 2008

Weekly cashews update

May 3, 2008

Cashew market is steady – with a slightly firm undertone for nearbys but not much activity for forwards. No change in prices in the last two weeks - business was done for W240 around 3.20, W320 around 2.95, W450 around 2.75 FOB (some business was done few cents higher as well)

RCN prices from West Africa are also steady but very little new business has been done in last couple of weeks. Brazil has entered the RCN import market after a long gap (their previous import was in 1998/99). Shipments are picking up and after reasonable quantity of old purchases have been shipped, new business will be done. There is still a lot of seed available but there are delays in arrival in India & Vietnam plus some holding back for higher prices. Unless kernel prices pick up for forward positions, processors will be reluctant to pay high prices as there is very limited demand for later positions at the moment

Due to the uncertainty of when – and how much cashews – will be shipped from Vietnam, it seems that kernel market is likely to be more of a spot market for quite some time. This is going to make things difficult for people who want to take forward positions – they will be reluctant to take on any big commitments as they are already caught on the wrong foot and cannot afford to aggravate an already difficult situation

Usage in first quarter has been good in most markets – despite some retail level price increases in some markets. Usage in second quarter must be watched closely to get an idea of extent of buying cashews still to be done for 2008 deliveries and to get some idea of how demand will develop in late 2008 / early 2009


Regards
Pankaj N. Sampat
Mumbai - India

Tuesday, April 29, 2008

Cashew Market Price Hikes and Defaults – Must They Go Hand in Hand?

By David Rosenthal

As if a staggering rise in cashew prices were not enough, reliable sources estimate that Vietnamese shippers have defaulted on over 2000 containers of cashews scheduled to arrive between November 2007 and February 2008. This presents a market differential in excess of 40 million dollars. The Vietnamese have protested that the discrepancies between current market prices and the lower prices contracted before the market overheated is so great that honoring the contracts would effectively put them out of business. Indian shippers (who so far have not defaulted) maintain that fulfilling the contracts would not result in substantial losses, because the Vietnamese raw seed, both domestic and imported, was bought at reasonable price levels and was sufficient to meet Vietnamese contractual obligations.

The problem is that much higher profits can be had by delaying shipments and causing supply disruptions. Historically, the default tolerance level is $0.20 lb. Once the market goes beyond this price differential, the temptation to default and sell to buyers willing to pay a higher price (and there appear to be plenty of these high bidders in China and Malaysia) is too much for some suppliers. And there is every possibility that even this traditional default tolerance threshold could decrease.

There is no question that these defaults are fueling the severe rise in cashew prices. It is by no means an isolated problem, but widespread – continuing from last year’s crop into the current one. The number of defaulted containers that need to be covered has triggered a wave of buying that is permeated with fear – both of shortages and of further price increases. The combination of fear and uncertainty is always a grim mix, and Indian shippers who know the extent of the defaults are not likely to allow prices to soften. There is a slim hope for price relief as the peak arrival period of raw seed in India and West Africa approaches, but the fear factor, delays and defaults seem to have created an environment in which the market firms almost as soon as it eases.

The problem is not unique to the United States. Our counterparts at CENTA have banded together and are working through their governments to resolve the situation through treaties and trade agreements with Vietnam. Although the United States does not have the same types of treaties, the AFI is also trying to safeguard the interests of American importers, who are caught in the vise of having to fulfill contracts to their customers while having to pay more for cashews purchased on an emergency basis in order to cover the defaults. Unfortunately American importers have the added handicap of the weakening dollar, making their bargaining position more problematic.

In order to recoup their losses and stabilize the situation, the importers need for these older, less expensive contracts to be shipped in full. There can be no question of “Force Majeure” from Vietnam, because they continue to offer containers of cashews for 5 – 6 months out (at high prices) which we must assume to be the very containers that they are not shipping for their contracts! By whatever means – arbitration, diplomacy, etc. the defaults need to be addressed, and resolved, because it is not only the short term that is at stake. The commodity trading and speculative market approach that has been the mainstay of the industry could be at risk if commodity traders (importers) are perceived to have no power to effectively enforce contracts.

The cashew industry has experienced these “perfect storms” in the past, and will weather this one also. It is worth mentioning that not all of the Vietnamese shippers have defaulted on their contracts – many are honoring their obligations. These tend to be the ‘best of the best’ – shippers who view long term relationships as more important than quick profits. These difficult situations are always learning opportunities – if nothing else, hopefully, the importing community will remember who the reliable suppliers are when the good times come around again.

Thursday, April 17, 2008

Peanut Planting Update

Good afternoon,
In general the peanut markets have been very quiet the last week. Little to no offers on ’07 Crop and certainly no offers on ’08 Crop.
I have talked to some farmers, this week, that advised that some additional acres (planned for peanuts) have been planted in corn. The price for corn topped $6/bl. last week and some acres were planted in corn. The weather was good and University of Georgia planting guides allow planting of corn through April 15.
There is no way to tell how significant this increase in corn may be, but any reduction in peanut acres is not good.
Export Peanut numbers were released by FAS for February. They show total peanut exports up 72% Feb ’08 vs. Feb ’07. For the crop year Exports are up 14.7%. Most exporters agree, this trend will continue. The peanuts have already been sold and the numbers will come in as they ship.
This continues to bring concern that supply will be tight on peanuts as we move through the summer.
Again, it is very hard to get price indications from any Sheller.
The shellers are waiting to see how many acres are planted and shell a few more tons to see how yields come out.
We may see some additional offers on ’07 and ’08 crop in late May or early June.
Let me know if you have any questions or comments.
Thanks Stewart

Tuesday, April 15, 2008

Cashew Concern Certification

I came across the attached commentary in the CCC website on the devastating effect that ignoring potential vulnerabilities has had on the Airline industry. Although addressing these issues proactively would have cost American Airlines a substantial amount of money it pales in comparison to the tens of millions that it will now cost to remedy the situation, not to mention the the effect this will have on consumer confidence.

This comes in addition to the recent news regarding the high levels salmonella recently found in the Malt O Meal cereals and their co packed private label brands. Both of these issues bring to light how vulnerable industries are today and that ignoring potential problems can result in a very costly lesson.

Bentzy Klein

Cashew Concern Certification

Monday, April 14, 2008

Growing NOW problem poses serious pistachio aflatoxin threat

Apr 11, 2008 11:10 AM, By Harry ClineFarm Press Editorial Staff
California’s 2007 pistachio crop was not only huge in size, but also alarmingly high in aflatoxin levels — almost 30 percent in at least one sampling.
For an industry facing future record-after-record crops, the prospect of a growing aflatoxin problem is not good. Handlers report unwanted high levels in the nuts processed from this crop.
The problem has become so alarming, handlers are now considering penalties for growers who deliver nuts unacceptably high in aflatoxin levels/Navel orangeworm damage and to reward those who avoid the problem with good management practices and deliver a clean crop.
And giving your handler a very clean crop is not that difficult, according to Bob Beede, University of California Cooperative Extension tree nut crop farm advisor for Kings and Tulare counties.
Beede told the recent Western Pistachio Association’s U.S. Pistachio Conference in Santa Barbara that a team of UC entomologists have put together a thorough package of knowledge and control strategies to reduce Navel orangeworm populations, and therefore significantly reduce the chances of aflatoxin in California pistachios.
Food safety is hammered hard at just about every crop production and handling meeting these days. It was no different with pistachios which can ill afford a food contamination crisis.
Pistachios remain almost a niche snack food consumers would quickly avoid if they perceived there was a food safety issue.
Consuming high levels of aflatoxin can make people seriously ill. It has also been linked to liver cancer.
“Folks, we have a problem we have to solve collectively. You have to take Navel orangeworm management with extreme seriousness,” Beede told about 400 growers, processors and PCAs at the conference.
Last season’s high levels have been blamed on the “perfect storm” of a heavy crop with strung out maturity, a large percentage of early splits and a late harvest.
Beede acknowledged that it may have been ideal for NOW and aflatoxin, but the overwintering NOW population left behind will not go away.
Nor will the growing number of perennial crops that host NOW go away, particularly almonds, another crop seriously impacted by NOW.
Beede insists that a 7-step program will significantly reduce any overwintering or growing NOW problem.
It begins with sanitation; shaking mummies from trees, blowing mummies off berms into middles, and disking them in.
“It may cost $100 to $150 per acre to do the sanitation work,” said Beede. It may pay off by not getting a call from your processor who says he does not want your pistachio nuts because of high NOW damage/aflatoxin levels.
As important as sanitation and beneficial insects are in controlling NOW, those two things together or alone will not control damaging levels of NOW. Control will go beyond those.
Most all generations of NOW in a season overlap, some in as brief a time span as 10 days per generation. However, the first generation does not overlap with the second. It is that initial flush where growers have a shot at cleaning up overwinter populations with a pesticide.
Beede recommends using one of the new soft, non-disruptive insecticides to control worms then. Don’t use an organophosphate early because it will take out beneficial parasites early.
“This first generation early treatment would be around the first week to 10 days of May in a normal year,” said Beede.
He also suggested disking middles in June to break pest production cycles; applying soft materials in July if warranted.
“If you wait until August to do something about a NOW infestation, you will not be able to control NOW with pesticides then” he warned.
“And harvest early,” he added. “Don’t wait for all the nuts to split. They won’t.”
After harvest, Beede said, is another opportunity to break a NOW reproduction cycle. “Remember when you are harvesting nuts, Navel orangeworm also are harvesting nuts.”
“Look at a post harvest treatment with Intrepid and a pyrethroid,” he suggested.
Early splits create an ideal environment for NOW generations to enter the nut and reproduce rapidly. Early splits last year were correlated to deficit irrigation in many cases, according to one handler.
Emerging NOWs do not have to be high numbers initially to create problems. Beede said one entomologist collected 200,000 mummies, but only 190 adults emerged.
“Not a problem? Let’s say there are only two Navel orangeworms per tree in an orchard. Each one can lay 100 eggs giving you 200 eggs per tree. Assuming 50 percent mortality in those eggs, that still leaves 100 worms per tree. That is a problem,” Beede said.
In the pistachio industry, we are all in the same boat when it comes to NOW and aflatoxin ... all in the same boat without a commander,” Beede said, indicating that NOW control is a grower-by-grower decision.
However, there is one common thread among growers and it is that there is plenty of information about this insect pest and how to control it.
“One thing we all have is knowledge and knowledge is power,” Beede emphasized.
He encouraged growers to “seize the opportunity” to control NOW and reduce any aflatoxin threat and “preserve the food safety and preserve the market that California pistachios have always been recognized for.”
email: hcline@farmpress.com

Friday, April 11, 2008

Vietnam: Long An Food expects Vietnam’s 2008 cashew harvest to drop 23 pct

Long An Food Processing Joint-Stock Company, Vietnam’s biggest publicly traded cashew processor and exporter, said it expects the country’s harvest to drop 23 percent this year. The stock fell for the first time in 10 days. Vietnam’s cashew harvest will decline to 270,000 tons this year from 350,000 tons in 2007, said Le Huu Phuong, deputy general director in charge of finance at Long An Food. The stock slipped VND500, or 1.9 percent, to VND26,000 in Hanoi."The country will have a bad harvest due to the weather", Phuong said Wednesday in a telephone interview from Long An, a province in southern Vietnam. "We have some difficulties, but we foresaw the situation and signed up contracts to buy cashew nuts from African countries." The company needs to source for cashews to boost its earnings. The Long An-based company expects pretax profit to rise 14 percent to VND25 billion (US$1.6 million) in 2008 from VND22 billion last year, Phuong said.Source: thanhniennews.com

10 April, 2008 - A contentious food tracking system that Chinese authorities insist will radically improve safety has been incorporated into draft law

Source: FLEXNEWS10/04/2008


The new product and identification system however has met with resistance from major manufacturers who say it will fail to address the problem while significantly adding to production costs.Under the new arrangements each product will be allocated a unique code which, say Chinese officials, will allow it to be tracked at each stage of its productions and distribution cycle. Once it comes into full law, it will be illegal to sell food without such a code.China’s Government originally said the system had to be up and running by June but has now extended the deadline until the end of 2009.However, reports in Chinese media say many of the largest food companies, including Mars, NestlĂ©, Coca-Cola and Pepsico have raised concerns about the proposed system.Many companies said it would raise production costs and lead to price rises of up to 15%.More importantly, say opponents, the system has a number of fundamental flaws. It does not apply to small companies which, say many, are the cause of the majority of food safety breaches.Li Yu, scientific and regulatory affairs director of Mars China, was reported as saying: “The system is of little use in ensuring product safety, as it doesn't deal with the quality of raw materials."Also, the system doesn't apply to small food plants, and they have the most problems.”A Chinese Government official responsible for implementing the system said the government would work with companies to solve problems as they arose.







Marc Stevens

Monday, April 07, 2008

Weekly cashews update

April 5, 2008

Market was very quiet this week – very little business reported. No change in prices e. g. W240 around 3.25, W320 around 3.00, W450 around 2.75 FOB (some large processors sold few cents higher). Prices for Splits & LWP moved up a bit in domestic market.

WA season seems to be progressing normally - Prices came down 3-4% i.e. Benin is around 950 and IVC is around 875 C&F. If RCN prices ease further, we might see some kernel selling interest as processors would like to have some sales on books before buying too much RCN. But before selling any big volume, they would like to cover reasonable quantities as they would not like to go short again even though prices are high

In Vietnam, Vinacas has organized meetings between processors & some large buyers this weekend.. Outcome of these meetings will have a great impact on supplies from Vietnam and positions & buying strategy of most buyers in main importing countries

Until there is significant improvement in flow of product to USA & Europe – and this is unlikely to happen before June even if enough RCN is available – supply lines will be tight. Need for spot and nearby shipments will probably keep the market firm. In turn, this might result in steady RCN prices affecting ability of processors to offer kernels at lower prices for next few months. What impact this will have in second half of 2008 & early 2009 – on demand and prices - is a big question mark

Overall, difficult times & delicately poised market means that everyone will have to be extra careful for next few weeks

I would appreciate your views on the current situation, information on demand and price trends in your market... and your opinion on how market will develop in coming weeks & months

Regards,
Pankaj N. Sampat

Monday, March 31, 2008

Initial Projected 2008 Peanut Crop Planting

Good Monday morning,

The USDA issued the Prospective Plantings Report this morning.
Peanut acres are estimated to increase 16% over 2007 crop to 1,430,000 acres.
This would yield a little more than 2,100,000 tons, with an average yield.

This is certainly not too many peanuts when you consider a demand of 1,950,000 tons and the short carry-in to the 2008 crop.

I will give a more detailed report, later.

Have a Great week. Richard



Peanuts: Area Planted by State
and United States, 2006-2008
--------------------------------------------------------------------------------
: Area Planted
State :---------------------------------------------------------------------
: 2006 : 2007 : 2008 1/ : 2008/2007
--------------------------------------------------------------------------------
: --------------- 1,000 Acres --------------- Percent
:
AL : 165.0 160.0 180.0 113
FL : 130.0 130.0 120.0 92
GA : 580.0 530.0 650.0 123
MS : 17.0 19.0 28.0 147
NM : 12.0 10.0 9.0 90
NC : 85.0 92.0 86.0 93
OK : 23.0 18.0 20.0 111
SC : 59.0 59.0 65.0 110
TX : 155.0 190.0 250.0 132
VA : 17.0 22.0 22.0 100
:
US : 1,243.0 1,230.0 1,430.0 116
--------------------------------------------------------------------------------
1/ Intended plantings in 2008 as indicated by reports from farmers.
2008 PEANUT CROP ACREAGE ESTIMATE 3/31/2008

ACRES YIELD PRODUCTION
2006 1,210,000 2,863 1,732 ,125
2007 1,195,000 3,130 1,870 ,325
2008 1,430,000 2,800 2,002 ,000
1,430,000 3,200 2,288 ,000


Over the last five crop years U.S. yield hasn't been
lower than 2,863 pounds per acre and hasn't been
higher than 3,159 pounds per acre. Speculation on
the possible low and high production for 2008 crop.
Stewart

Wednesday, March 26, 2008

UPDATE ON PEANUTS March 24, 2008

Supply
2005 Peanut Crop production 2,410,000 tons of farmer stock
2006 Peanut Crop production 1,737,000 tons of farmer stock - Down 28%
Tonnage was down due to 25% reduction in acres and poor growing conditions
Carry-in from 2006 is estimated at 585,000 tons. (Aug 1, 2007)
USDA final estimate (1/10/08) 2007 Crop at 1,870,325 FST. FSIS has only graded 1,811,228 tons, as of 3/18/08. (1,815,000 FST is going to be close)
Demand
Demand onUS Peanut crop 1.98 mil tons
Demand includes Peanut domestic usage 1.45, seed .13 mil, exports .40 mil tons.
Supply 2,520,000 = 1,815,000 ’07 Crop + 585,000 carry-in + 120,000 import
Demand – 1,980,000 = 540,000 FST carry-out (Aug 1, 2008)
This is a tight carry-out. (we need 475,000 to cover Aug – Oct).
There is an unusually high demand out of Mexico and EU at this time. This is due to China not offering and Argentina has sold out of the ’07 crop.
US demand is just seeing the price increases being put into effect Jan ’08. It will take a month or two for us to evaluate the impact on demand. P/B is usually a strong seller in a bad economy, so I would expect it to stay strong. Candy and Snack could take a hit as fuel cost take a big part of the consumers cash.
Market ’07 Crop
Very few offers on 2007 Crop - Peanuts with EU specs or Hi-Oleic specs would be higher.
’07 crop market going forward depends on 1) US demand – how does the consumer react to the higher prices and the weaker economy. 2) China - Recent reports indicate China will need all their peanuts for oil and consumption within the country. 3) Argentina – how will the crop be in Argentina? Acres were up 4%.
Jan ’08 export of peanuts is up 48% over Jan ’07. Shellers indicate significant export sales have been made going forward. We are just starting to see this in the Govn’t numbers. This will help keep the US market tight and prices firm.
’08 Crop
Farmer stock has been contracted at $500 - $550/ton. The majority was at $500 - $525. I would estimate that 65 -70% has been contracted. (more in the SE than SW)
Last week cotton prices fell along with other small grains. This has taken the pressure off of peanuts. Farmers seem to be complaining less about the $500 peanut contracts. Cheaper cotton may help us with peanut acres.
Shellers are withdrawn from the ’08 market until we see peanut acres planted.
I believe an increase in Peanut acres of less than 15% will be bullish on prices, 15 – 18% will be neutral and 18% + will be bearish.
Long range weather forecast are still calling for warmer and dryer in the peanut areas. In spite of this, we have had good rains in the SE over the last 2 months.
Stewart Parnell