The market for Turkish sultanas is quiet these days before Christmas with stable prices in US Dollars. The market prices for USA raisins however has been going up like a rocket in the past month due to a short crop of relatively poor quality and growing demand for long term commitments.
In normal years these two markets for sultanas and raisins do not influence each other too much, with the Turkish sultanas often a few hundred dollars below US prices and each supplying their main markets: The Turkish exporters mainly supply the European (bakery) industry and the Californians are normally supported by their strong domestic demand in the USA.
However this season the differences in current prices are so huge, that this could create a very bumpy ride during the season, depending on the availability of raisins and changing customer interest from raisins to sultanas.
Sultanas
The Turkish crop has been a good crop in size with about 300.000 mton and the quality of the sultanas itself is perfect. However the berry size has been the problem this year and there are less medium and small berries in this crop, which is a big concern among exporters. Due to that shortage everyone had expected a firmer market already in October. However the currency developments have caused very stable prices in dollars, which were not foreseen. Especially with the short Iranian crop in mind too.
Sales through the Borse have been strong up till now and are reported officially around 180.000 mton, but many speak of 200.000 already. It seems 80.000 mton is still in the hands of farmers and about 60.000 mton in the hands of exporters and speculative traders, which is not much.
We foresee a stable market during January, but if anything in this market goes wrong in the months after, for instance frost in March or simply the preview of a smaller crop, we still believe in the risk of a strongly firming market for especially medium/smaller sized sultanas. We already see strong differences in pricing between exporters.
Further with the differences between the raisins and sultanas in this market, customers (and specifically German retailers) can decide to turn back from raisins to sultanas again, which would cause a strong demand for Turkish sultanas during January/February when the bigger retailers normally step in. There is a gap of USD 1500.- /mton (!) between USA raisins and Turkish sultanas and about USD 1100.- / mton between new crop South African raisins.
Raisins
The crop in USA for Thompson raisins has been disappointing and has been reported to be short, but especially also of poor quality. Now since customers have been tumbling all over each other to cover their needs for decent material, we have seen prices rocketing to levels over USD 3000.- / mton on an FOB California basis.
In February the South African crop 2018 will come to the market and is foreseen at this moment to be about 60.000 to 70.000 mton and of perfect quality. This could be a bit of a relief for certain European Thompson buyers, but some are ‘stuck’ to USA material in their recipes and will not make that switch. However even USA buyers are very interested in this crop which is priced about 25% lower than their Thompson raisins.
The new crop in Chile will be expected in a few months. Packers are forecasting a better crop in 2018; 65.000 mt. This is 10.000 mt more compared to 2017’s crop. Packers will start quoting new crop in January.
All in all there are many parameters which will determine the market prices in the next months and it is as always hard to make a clear prediction, but we still feel there will be an upward correction of the sultanas prices towards the raisin prices.
Published: 21-12-2017
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