MARKET FOCUS – JULY 2020

GLOBAL MAPPING – MAJOR ORANGE – GROWING REGIONS

Covid-19: Impact on the market for orange juice concentrate

Slow sales by hotels and airlines and no sales date reported from the food service sector. Data from retail sales are good, but below the initial figures reported at the beginning of the lockdown.

Countries that produce orange juice concentrates:
Top 4 – Brazil, Mexico, USA (Florida) and EU (with Turkey and Spain leading)

Florida – Season for Navel and Valencia varieties: October to January.
Sales in Florida are concentrated on the North American market. The harvest figures for the 19/20 season were lower than the pre-harvest figures, as the trees were subjected to varying degrees of stress, which resulted in fruit loss for most Valencia varieties. For the 20/21 season, the predictions for the next harvest are favourable, as it rained only occasionally and the trees should be in high bloom. The crop should be similar to the crop figures for the 19/20 season.

Mexico – season for Navel and Valencia varieties:
Early varieties: October-December, higher quality Valencias run from January to April.
Covid-19 has had a great influence on production in the main growing region of Veracruz. Due to the high influence of demand in the fresh market, the availability of oranges for the juice industry has been reduced. Exports from Mexico are also concentrated on sales for the US market, and smaller quantities are shipped to Europe and Asia.

Brazil – July to January with peak harvest in August
Trading areas in Brazil are the state of Sao Paulo and the western part of Minas Gerais. Season 20/21 is currently running, the harvest volume is declining compared to last season due to high 2019/20 stocks still available in tanks, warehouses and international stores. The current global volume is estimated at 420 782 MT (66 Brix with a ratio of 11-18). The following figures should give a clear picture of Brazilian stocks for 19/20 and 20/21.

Season2018 / 192019 / 202020 / 21
Beginning Stocks15 000,0160 000,0290 000,0
Production1 004 000,01 312 000,01 022 000,0
Exports989 000,01 142 000,0965 000,0
Domestic Consumption40 000,040 000,042 000,0
Ending stocks160 000,0290 000,0305 000,0

EU – October to April. Top 4 Spain, Italy, Greece and Portugal
The Covid 19 crisis had a limited impact on the 2019/20 harvesters, but the production yield is 5% lower than last season. Due to the virus, there was an increasing demand for oranges – fresh and brand new. Retail sales increased and demand is expected to be higher than the market can offer. The increasing demand for fresh oranges has led to high price increases in the fresh market and especially in the market for processed oranges.

Global pricing: Leading the top 4 – Brazil, Mexico, USA (Florida) and the EU (leading Turkey and Spain)

Pricing in Mexico – offers on FJOC between 1650-1700 $/mt FOB (for EU and Asia)
Large Brazilian processors offer FCA $2000/MT for Orange Conc 66Brix with smaller processors between $1750-1950/MT FCA
Florida – $2000-2100/MT FCA
EU – Top 4 leading prizes: Euro 1700-1850/MT FOB

World 2019/2020 CROP production for apple concentrate

• increased by 8% overall, with China more than offsetting the sharp drop in EU production

Countries that produce apple juice concentrates: Top 3 – China, USA and Poland

Europe – Season: August to January. Main producer is Poland.
• EU 2019/2020 production increased slightly to that of the 2018/2019 season. Poland, the main supplier of apple concentrate, experienced frost but is not in danger of drought due to high rainfall.
• Turkey is expected to have a normal season. The main product sold from this country is sweet apple concentrate.

USA – Season: July to November
• Crop production in the USA 20/21 is expected to increase to 4.7 million/MT – Washington State is the main producer of apple concentrate and has experienced favourable weather for the 20/21 crop.
• Comparing crop yields with those of China and the EU, the USA still does not have sufficient stocks for export to neighbouring countries.

China – Season: End of July to December
• Growing regions in China have experienced frost and hail damage. The Chinese Chamber of Commerce expects a 30% decline in crop yields; therefore, producers do not expect large harvests and no availability of fruit for their productions.
• China is one of the main suppliers to the USA; due to the corona virus, these deliveries are offset by New Zealand, Poland and Chile

Pricing: From leading countries

Europe
Poland: 2,0-2,05% apple concentrate with medium acidity 70 Brix – Ex factory Eur 1200/MT
Turkey: 2.5-3.0% high acidity apple concentrate 70 Brix – Ex factory Eur 1290-1300/MT

China
1,22-2,0% low acid apple conc 70% – FOB $1050-1150/MT
2.0-3.0% medium/low acidity apple concentrate – FOB $1170-1200/MT

USA
Washington: 2.5-3.0% high acid apple concentrate 70 Brix – Ex factory $1400-1500/MT

World 2019/2020 CROP production for grape concentrate

• increased by 18%, with production from China rising again

Countries producing grape juice concentrates: Top 3 – Argentina, Italy and Spain

Argentina – Season: February to April
Production fell by 25% to an average harvest
Due to the lower demand for passion fruit juice in some markets, especially in Latin American countries, there are some delays in deliveries by manufacturers.

Italy – Season: Harvest from September to October
Rich harvest for 2019/2020 – most of the grape juice is used for wine production

Spain – Season: Harvest from September to October
Spain is one of the main producers of wine and exporter of grape juice concentrate.
Buyers are waiting for the harvest in September, as the estimated prices for the harvest seem to be variable.

Pricing: From leading countries

Argentina
Grape white Conc 68B – FOB $1250-1300/MT

EU (Spain and Italy)
Grape white Conc 68B – ex factory $1100-1200/MT

Banana puree

• Banana is the second most important fruit consumed internationally after citrus fruits; total global production: 86 million MT, with India producing 14.2 million MT of banana puree
• Main producing countries: India leads with high production volumes, followed by China, Uganda, Brazil and Costa Rica, Mexico and Colombia
• Brazil and India are hardly involved in exports due to the high national demand.
• 70% of world production is imported by the USA, the EU, Japan and China.
• India mainly exports banana puree to the Middle East

Current prices for bananas from Central America – FOB $600-$680/MT

Mango

Totapuri, Alphonso and Kesar (India) – Seasons: Southwest March to April. Northeast June to July
Restrictions on the transport of fruit between districts and states have restricted the suppliers of processing plants. Lack of labour in production has led to the closure of processing plants, particularly in the West Indies.

Mango – LMP (India)
Alphonso’s 2020 harvest ended in mid-June in southern India, but was interrupted on 5 June in western India due to Cyclone Nisarg. The quantities processed are far below those of the 2019 season, but demand was good, especially from Europe and North America. Stocks of LMP are sold out in the West Indies and stocks in the South Indies are almost exhausted.

Mango – Kesar (India)
Kesar is also a popular mango puree sold from India that can replace AMP in fruit juice formulations. Inventories are almost exhausted due to the replacement of LMP.

Mango – TMP/TMC (India)
Progress for the 2020 TMP season is slow, due to working capital constraints and bankruptcy problems at some major processors. Other processors are struggling to obtain fruit. For these reasons, fruit merchants are raising fruit prices to new historic highs, resulting in expected volumes 40% below those processed in 2019. Only a limited quantity will be processed against firm orders. Demand from the EU, North America and the ME is strong and inventories are expected to be sold out by December.

Magdalena River and Kent (Colombia). Season: Most of the year
Due to Covid-19, the fruit harvest in this season was reduced as the municipalities closed the roads and prevented trucks and fruit pickers from entering. Transport freight prices increased during the period of restrictions, but processors indicated that they would crush the fruit reaching the factories. It is predicted that the summer harvest will only reach 60% of the predicted volume. The harvest is expected to last until the second or third week of August, with processors saying they will be sold out by the winter season. Demand has been incredibly strong, and processors have received inquiries from around the world, especially for the Magdalena mango puree.
The winter harvest will start in November and juice supply is expected to reach the ports in mid-December.

Pricing: From leading countries

India
AMP now linked to CFR Europe $1450
TMP prices at CFR Europe $850-900/MT versus CFR Europe $825-850/MT last month
TMC prices at CFR Europe $1350-1400/MT compared to CFR Europe $1250-1275/MT in early June

Colombia/Kent
28Brix Conc FOB $1150/MT versus FOB $1100-12350/MT last month

Maracuja

Top 3 – Ecuador, Peru and Vietnam

Ecuador:
Season – Peaks in April and August with lower, sustained production throughout the year. Producers indicated that quantities are lower than they expected from the high peaks of the season. Fruit prices rose, with prices peaking at $400/MT, and fruit delivered lower juice concentrate output than last year.

Peru:
Seasonal peaks in July through September. Volumes are lower than last year’s season, but fruit prices are the same as last year.
As many companies are affected by Covid-19, the smaller harvest was offset by lower demand in the consumer market.

Vietnam:
Season – October to March. The volume of passion fruit concentrates is lower than last year, but the volume of SS passion fruit is similar to last year. Rotterdam is the largest destination for Vietnamese passion fruit juice concentrate, accounting for 60% of shipments.

Pricing: Ecuador, Peru and Vietnam

Ecuador
Passion Fruit Concentrate – FCA Europe $6500/MT versus FCA Europe $6200/MT
SS Passionfruit – FCA Europe $2300/MT against FCA Europe $2150/MT

Peru
Passion Fruit Concentrate – FCA Europe $5800-6100/MT
SS Passion Fruit – FCA Europe $2000/MT

Vietnam
Passionfruit Concentrate – FOB $4800-5000/MT-SS Passionfruit – FOB $1600-1800/MT

Pineapple Juice Conc/Frozen Pineapple Juice

Thailand, Costa Rica und Philippinen

Thailand Pineapple Conc/Juice – Season February to May
The Thai pineapple industry can be described as a “colossal disaster” as processors will lose more money than ever before.
The usual production of pineapple juice concentrate/frozen juice is normally between 2.0-2.2 million tons. This year the volume was about 0.9 million tons. Farmers reportedly harvested the small unripe fruits during the summer harvest, which could lead to higher nitrate content and darker colouring of the juice. Demand for the pineapple juice is low from buyers, as they know that there is no shortage of supply in other regions.

Thailand, Costa Rica and Philippines
Costa Rica Pineapple Conc/Juice – Season all year round (variety MD2)Costa Rica dominates the pineapple market, two out of three pines.
The export volume for the conc/FJ pineapple fell for the first time in 3 years amidst weather and market-related challenges (decline in the international price for the conc/FJ). Due to lower prices, this led to lower producer income, which meant that inputs were not produced at the right time and some producers left the country. The industry expects the price decline this year to end with a recovery in 2021.

Pricing Thailand, Costa Rica and Philippines

Thailand
Pineapple concentrate – FOB $2100-25

Costa Rica
Pineapple concentrate – FOB $4300/MT

Philippines
Pineapple concentrate – FOB $2000-2100/MT