July 2024 Market Update

 

Cherry Harvest Underway

The cherry harvest in Europe and the Pacific Northwest of the United States is underway. Early indications are that the crop will be more bountiful compared to recent years, although it’s still too early to know what the yield will be until the crop is successfully completed. Expect new crop pricing in July/August for maraschino cherries, Amarena cherries, and Old Fashioned Cocktail cherries.

 

Olive Oil and Olive Market Remain Tight

It has been a turbulent year for the Olive Oil industry.  Spain typically accounts for nearly 45% of global production.  Current Spanish inventory stock levels are at a 20-year-low with market prices near all-time highs. Expectations are that the market will remain firm throughout the summer and into the holiday season. Traditionally, new Green Olive/Olive Oil crop pricing is announced in January.

In terms of new crop, rainfall throughout the olive producing regions in Spain this past March and April has reversed the recent drought conditions, which has led to a cautiously optimistic outlook for the harvest this fall. If monthly exports remain average, Spain will enter the harvest with historically low inventory carryover.

Similarly, the Black or Ripe Olive supply remains extremely tight and unstable due to adverse weather conditions experienced in the main olive producing countries of Spain, Morocco and Egypt.

It is too early to predict if the yields will improve but the shortage is expected to go well beyond the coming harvest, as there are large quantities of back orders to be filled. Furthermore, the marketing order in affect since 2018 has added a significant additional cost to Spanish Ripe Olives.  Spain is by far the world’s largest producer of olives.

 

Jasmine Rice Market Faces Struggles Due to El Nino

The market for Jasmine Rice from Thailand has been firm through Q2. With the harvest hampered by El Nino, local Thai market prices have increased due to the limited availability of raw materials. The trend will likely continue throughout the summer months. Adding to the rice market woes are advancing ocean freight rates.

 

Baby Corn Tight Due to Drought

Severe drought conditions throughout the growing regions of Thailand and Vietnam have been detrimental to Baby Corn production.  Shipments have been delayed as farmers try to gather raw materials to fulfill orders.

 

Until New Crop, Artichokes and Peppers Will Be Tight

Peru

El Nino has brought higher temperatures, which has greatly impacted various vegetable fields in Peru.  The little supply that is available is being exhausted with no carryover to the new crop and is creating a backlog of back orders to be filled from the new coming crop. Peru will no longer be producing yellow bell peppers, so they will now be sourced from Mexico.

 

Spain

Production costs have also increased in Spain, the former traditional supplier to the world. Duty rates are also considerably higher on pepper exports from Spain into the US vs from Peru and Egypt.

 

Mexico

The Bell Pepper campaign in Mexico is coming to a conclusion with normal yields, although costs are higher versus Peru. Since Peru will no longer be growing yellow peppers, they will be sourced from Mexico going forward.

 

Ocean Freight Rates Continue to Rise

One of the biggest factors on the cost of foreign goods is ocean freight rates. Rates from Asia and Europe have been increasing dramatically over the past several months due to:

• Sudden increases in shipping demand, leading to fewer available vessels and more port congestion
• Houthi attacks in the Red Sea, causing a need to re-route around the Cape of Good Hope (which also increases transit times)

Rates are expected to keep climbing throughout the summer, having a direct impact on all products, especially those imported from the Far East.