The market in California is still at historically high levels and the US packers feel that also the new crop will not bring much relief. Despite that the expected crop will be about 10% bigger than last year, but there will be less carry-over from this crop than normally. Further the quality of the material left from this crop is far below average. Probably that means the situation will not change too much. Some US packers have been busy buying Thompson and Flame raisins in Chile and South Africa. This has caused South Africa and Chile to be virtually sold out on medium sized raisins within the first few months of their season.
If prices in the USA remain that firm, it will also reflect in a bigger ‘raisin’ crop coming from Turkey, if the weather there is favorable during the drying period. If they will dry (with the current price differences between sultanas and raisins being USD 1000.- / mton), the expected 60.000 mton (last year 20.000 mton), that will also have an impact on the available sultanas crop.
South-Africa (about 60.000 mton) and Chile (about 55.000 mton) both also have had reasonable to good crops, but the medium raisins from the 2018 crop have all been sold already to the USA. From those countries we mainly have offers left for Jumbo Flames and Jumbo Thompson and various sizes of Golden raisins.
The Turkish market shows historically high levels for raw materials these days. The only reason that prices in USD are not historically firm, is the relative weak Turkish Lira. Today’s levels in USD are about 30% higher than last year in June. The new crop size of sultanas fully depends on the volume that will be dried as raisins. The total expected crop of dried grapes will be about 280.000 mton of which a possible volume of 30.000 to 60.000 mton will be dried as raisins.
If the weather is favorable in August and two weeks of sunshine are foreseen, farmers will dry more raisins for sure and probably up to 60.000 mton. In that case we would only have 220.000 mton left for sultanas production with a domestic market that will also take 40.000 mton. Total exports this year will reach 275.000 mton.
For a clear view where new crop will settle, we will probably have to wait till August/September. The uncertainty about the currency, high interest rates, Presidential elections in June and the actual sultanas crop size, will determine where we are going to in the months to come.
The fact that (especially) Iran and China will have a bigger crop than last year, might have an indirect impact. As Iran will have a hard time selling in Europe, they will probably trade serious volumes to Russia, who will then not be buying Turkish material.
Chinese prices are still quite low for prompt shipments from the current crop, but they will be following the Turkish trend for new crop for sure. China is not offering new crop yet, but are expecting a crop of 180.000 mton of which 50.000 mton will be dried as sultanas and the rest as green raisins.
Looking at the demand side, the European market seems a bit quiet right now. However in the coming months a lot of business will have to be done for the period until the end of the calendar year at least. And not just the availability of sultanas and raisins will determine the prices in USD this season.
We will keep you informed in the months to come.