COMMODITY MARKET REPORT

 July - August 2008

£1.00 - $1.92

Overview

We are now in a situation where we have to look at the Global food supply. The global food chain is currently being stretched in every direction. Large premiums are now being paid to farmers to convert to growing “green” bio fuel crops. Countries like China & USA that have historically been large exporters of food stuffs are consuming vast amounts of their own production. With all of the above and with the pressures on the food industry at present, I feel there is little chance of the commodity prices falling back down to the levels we have experienced the previous couple of years, it may take up to 2 or 3 seasons (years) for the food production to increase to a level to cover the markets demands.

We are doing all we can to minimise these rises but ultimately we need to accept that prices across the food sector will be significantly higher in the near future than we have been used to.

Cereal Matters.

As mentioned in the last report we felt the Non Organic cereal crops would rise once the new crop was harvested, this has become the case in point with increases on all products, the prices will stay this high or even increase right the way through 2008 as the crop is far smaller than usual. We were expecting the Organic cereals especially the Jumbo & Regular Oats to drop for the Nov/Dec or Jan/Feb period unfortunately this has not yet happened and the farmers are now saying that there is little possibility of the prices falling in 2008 .

On the Dried Fruit Front… 

The Apricot market is still very volatile with the new crop prices which we usually receive in April for Sept delivery still not available, this leads me to believe that the farmers are holding out for the best prices possible which means that there is little chance of a price reduction until the new crop products are in the UK.

We have managed to get a shipment of conventional Figs which I was not at all expecting, I have checked the quality of these are they are a very nice looking and tasting product, these will ultimately replace the Organic Fig which we have very little product left until the new crop arrives in November.

A bit about raisins from the USA. The UK is one of the largest importers of US raisins, just marginally second to Japan. We, as a country, import over 24,000 tonnes a year. In recent years other countries such as Turkey and Mexico have successfully exported raisins grown from the same Thompson variety as the US, but these are mostly used in manufacturing, where the taste is largely disguised. In blind tastings of the raisins, consumers always favour the US raisins. Although this taste advantage is important, other factors which must be considered are quality issues. The US factories where the raisins are cleaned, washed and packed are modern and hygienic. In other countries quality controls may not be as stringent.

Tropical Fruits…

The prices of the tropical fruits Banana Chips, Mango, Papaya & Pineapple has risen considerably at origin over the last 6 months, this is due to the crops being hit by bad weather just before harvesting, however we committed to a quantity of all these products before the weather turned and are in a position where we have a good supply at a very competitive price.

About those nuts... 

The USA produces 80% of the world’s Almonds. Spain produces 20% but these cannot be eaten raw. (They can be roasted and salted, or processed. But we rely on California for our raw almonds.)

If the weather is poor and the crop looks likely to be smaller than usual, prices will start to rise as buying countries try to make forward contracts at low prices. If, when it comes round to harvest time, the crop does indeed prove to be poor, then there may not be enough to satisfy world demand and prices will rise quite sharply. For most tree fruits one of the most critical times is during the blossom period, in the spring. Any bad weather at that time might reduce the number of flowers on the trees or inhibit the bees from pollinating them. Bees will not come out if it is raining or if the temperature is lower than 20C. Even after the bees have visited a blossom, it takes about 12 hours before there is pollination and any adverse weather during that time will reduce the amount of fruit that comes in the autumn. The almond blossom is only out for a few very short weeks in the cool month of March, so this blossom period is a very anxious time for the growers. The Almond Board of California issues official crop estimates on certain dates, but many large buyers of almonds will have been in the orchards long before hand to try to second-guess what the autumn will bring. They will have seen many miles of pink and white blossom, making the hills look as if they have snow on them as far as the eye can see in every direction, and they will have smelled the exquisite scent which pervades the air and intoxicates the bees. Beehives are hired and brought in specifically to pollinate the trees. Unfortunately the honey which is produced is too bitter to be used as a by-product of the industry 

The new crop Brazils are now, I would love to give you good news that it is a large crop and the price has fallen however in the current climate that was always going to be a long shot. We have managed to purchase new crop product at the same levels as the previous crop so we are holding the prices at the moment..

I had hoped that by this book the Whole Hazelnuts would be dropping down to reasonable prices, unfortunately has not happened. The Turkish farmers are still insisting that there will not be enough product to last all 2008, so we can expect to see high prices all year..

 We are now using Chilean Walnuts in both the halves and piece varieties, these have been warmly received by the retailers.

So(w) to Seeds…

The Organic Sunflower seeds crop is increasing at origin due to bad weather in China which resulted in smaller than anticipated yields, however we should maintain a consistent price until the summer due to forward buying..

The new crop Pumpkin seeds (both conventional & Organic) are now in stock these are a lovely looking and tasting looking seed, however I expect the price to rise over the forthcoming months.

Sesame Seeds are very difficult to obtain (both conventional & Organic) due to a very poor crop, we have covered an amount but I would expect the price to rise throughout the year. 

Beans & Pulses           50’s      800151

Grains                           50’s      800250

Dried Fruit                    50’s      800359

Nuts & Seeds               50’s      800458

Julian Wright

Purchasing Director

Tel: 0115 976 7295

Fax: 0115 976 7290

[ Home ] [ Up ]

Copyright © 2008 The Health Store