24th August 2017 – Sterling’s Slide Worries UK Dried Fruit Trade

The continuing slide in the value of the UK pound against both the US dollar and the euro over the past week has been met with disappointment from all leading UK importers and retailers as this will inevitably increase the cost of all types of dried fruits.

Sterling has seen historic lows against the major currencies and this week has traded at its lowest level for over eight years. The continuing uncertainty over the Brexit negotiations and their effect on the British economy and increased confidence in the Eurozone are the principal issues, although the Bank of England’s reluctance to increase interest rates is also a major factor.

Dried fruits which fall into two categories, dried tree fruits and dried vine fruits, are principally traded in US dollars with less emphasis on the euro, although the value of the euro does affect products from Italy, Greece and France. These are principally Italian mixed peel and cherries, Greek currants and French cherries and D’Agen prunes.

The Turkish lira has also weakened in recent days against the dollar, which has hardened the cost of Turkish dried fruits. Local packers have reported some sharp rain showers over the past week in the sultana growing areas around Izmir, particularly in the important Manisa region. The harvest is well under way but will be interrupted by the national holidays for Byram which begin on August 26 and continue until September 4.

There are also reports of rain in the fig growing regions but so far, as much of the fruit is still on the vine or on the trees, little serious damage has been recorded. The local holidays fall at an inconvenient time this year and may delay first new season shipments from Turkey. This could cause local shortages and create an artificial (and hopefully temporary) increase in costs.

The official Turkish Agricultural Committee has completed its inspection of the fig orchards and recorded a total crop of 78,200 tonnes, plus or minus 5%. This figure includes damaged and sub-standard fruit which is unsuitable for drying, so the final exportable quantity will be much lower. (Editor’s note: a source in Turkey says that the margin of error could be as high as 10%, and reckons that the crop will be closer to 90,000 tonnes)

There is a reported increase in the Fusarium SPP condition. This disease, although harmless, renders the fruit unfit for use. First fig prices are now available with most packers continuing to wait until more of the crop is harvested. Early expectations continue to suggest a good-sized crop with firm opening prices. There may be a shortage of larger sized figs and an increase in figs that have cracked or split, following the very hot weather earlier this month.

The harvest for Turkish apricots has been completed, with a very large tonnage recorded. The quality is poor, with a high percentage of hail damaged and speckled fruits, although it is possible that these are the first to be traded. There appears to be a surplus of diced or chopped apricots and a large quantity of industrial quality fruit, so prices of these type will undoubtedly fall. There is also a greater quantity of natural apricots this season, with prices of whole pitted No 4 natural apricots at almost the same level as those treated with SO2. The high levels of SO2 this year will mean an additional premium for fruit exported to the EU, which has a policy to reduce the levels of sulphites in dried fruits and a strict enforcement policy.

New crop Greek currant prices have also been released by the major Union in Greece. As predicted, these are high, with the cost of the premium Vostizza currant approaching GBP2,000 per tonne for fruit landed ex-UK warehouse. Such high prices are likely to be met by buying resistance from UK buyers, as the differential between the cost of Greek currants and other vine fruits may encourage large users to change their recipes.

Early reports do however, suggest that this year’s exportable tonnage will only be between 18,000-20,000 tonnes, barely half the size of the Greek currant crop, just a few years ago. The reduction in tonnage does perhaps bring into sharp focus Greece’s continuing economic problems and the reluctance of local businesses to commit to modernisation without either state or EU funding. Prices of provincial currants, where available, are being quoted between EUR1,800-1,900/tonne fob Piraeus and further news is awaited once the crop is fully harvested.