Freeworld Heads Up 04/04/2017

Adam and Sanjoy discuss the latest news on seed and nut pricing

Is well sold and very firm on style 0s and 1s with very few offers on style 2s as well. Huge in shell demand from china has firmed the market however styles 4 and 5 can still be picked up at competitive prices.
Market remains very quiet with buyer’s seemingly covered in the short term and some have even covered further forward. The next shipping report is on the 12th April and is expected to be up compared to last march. What will probably be more significant is the TNT estimate rumoured to be released this week which will give us a talking point over the next crop size. Might this inspire some buyers to take further cover? Let’s see
Market continues in the same vein. Spot material very tight. Rcn prices high and Vietnamese crop is poor. This firm market will continue at least until the bulk African seed arrives, may/june. After this we could see some weakening as long as the yields are good and there are no hiccups with the crop over the next couple months.
Availability of American product is running low. Spot material in Europe is also hard to find. Chilean crop looks good but prices are high with good demand for in shell and availability low from other origins pushing their prices up.
Sesame has jumped up a few hundred dollars due to a recent Korean tender (12000mt), increased sea freight and strengthening of rupee against USD.
We would like to inform you that market in India is continuously picking upwards and week by week prices are becoming higher. The key issue is lower raw-material arrivals leading to difficulty in covering big volumes. For example – in the good white seed category Gujarat origin only arrivals is 400-600 bags per day, and even with hard- cash payment we are only getting only 1-2 trucks per day which is nothing for such a big industry. This is very critical that a short supply scenario developing at ground level in India and the new big harvest is not before October 2017.

Our reading say that the price did not move up north too much before due to 1) DEMONITISATION that sucked all the cash from the trade in end 2016 & 2) in early 2017 months there has been HUGE SUDAN REDDISH seed arrivals in India, with people doing the blending business. On the other hand the people like us who don’t do this dirty job have nothing else to do but to face the increased prices inventory to cater our customers. However now, there is no saviour from Africa as prices there are boomed up around 1200$ for white sesame that terms hulled prices well over 1650$ range (if someone imports & offer hulled for re-export).
There is a 10000MTS Korean tender open in the market for early April bidding, thus all factors suggest market will be firm in the coming days. There is no reason to expect fall-out of prices down the line as the summer crop reports are also very bad for now with sowing only around 12000-14000 hectares as per market sources. The USD/INR exchange slipped 3-4% since last few days below 65.00 that is another factor adding fuel to fire. We would again suggest you to take some cargo as this would be positive for your business considering the scenario developing in sesame, any demand vacuum will push the market upwards as supply is shorter than demand and customers can check globally that Indian Hulled is the most competitive right now compared to prices from Africa/South America etc. So in general everything became expensive.
Since December, pumpkin has steadily declined in price. Demand for in shell domestically has been very weak, and export demand for kernels has also been rather subdued. This in the face of the a very large 2016 crop. We fully expect a very large carryover. And we also believe that despite the poor prices farmers are getting there will still be pretty large plantings for 2017; the reason being much of the new land pumpkin is being grown on is only suitable for that commodity. Farmers have little choice of other commodities to switch to.
Sunflower – Bulgaria
2016 crop was large in size, but demand within EH has been consistent. Prices have been stable, but we expect to see them rising in the coming months, as inventories are run down before new crop harvest. I think it was last year when April/May time inventories ran out and it was very difficult to source stocks on the spot. So we are advising clients to book their requirements now up to end September.
East European Poppy also enjoyed a good harvest for 2016. The low morphine material grown in Czech Republic has been stable in price to satisfy the big German market. But the ‘A2’ type with no morphine limit on the spec has been weak, as demand has not been there. We’re advising clients to book their A1 requirements for the remainder of the season. A2, not so much of an issue!
Goji prices are probably at the bottom at the moment. Good quality raw material starts to run out and there is sign that prices will go up again. New crop goji is available from August/September onwards and pricing normally starts high.

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