3rd May 2018 – Concern Continues Over Global Shortages of Thompson Seedless Raisins

The UK dried fruit industry continues to remain calm, despite the large increases in cost this year for two of the three dried vine fruits and significantly reduced tonnages available for export. Greek currants are now being routinely traded above levels of GBP2500 pmt landed ex UK warehouse and US raisin prices have now breached the psychological level of GBP3000 pmt landed ex UK store for select grade Californian Thompson raisins. These are high prices and the difference in cost to the widely used Turkish sultana has grown, as these are still available between GBP1350-1450 pmt landed ex UK store.

Most industry commentators do therefore expect an increase in the price of Turkish sultanas for the new crop and first new season offers are now available, with prices being quoted between
USD1650-1700 pmt FOB Izmir for Ready to Use standard number 9 sultanas. The discussion continues on the quantity of this year`s crop that will be dried as raisins with some predicting levels between
10-20% of the total crop depending on weather conditions. It takes longer to dry fruit as raisins and the risk of damage to the grapes increases the longer the fruit is outside and exposed to the elements. It is too early to accurately predict the size of the new crop, but suggested figures range from 300.000 metric tonnes to 320,000 metric tonnes with a modest carryover from the previous year.

A new factor that has occurred is the knock-on effect of the clash between the US and China over tariffs and duties. The threatened increase by China on a range of agricultural products from the US has presented a new export opportunity for Turkish packers, as China seeks to find a more competitive source to replace the high-priced US raisins. This could significantly increase demand for Turkish fruit, which could then in turn put pressure on the quantities of sultanas and raisins that are available for export to major European customers.

The UK has long been the largest export customer for Turkish sultanas and major UK manufacturers have become used to low prices for Turkish fruit and easy availability. It will therefore be an unpleasant surprise if fruit is not readily available at the price required and buyers may need to look for alternative origins and sources of supply. This year Southern Hemisphere producers have enjoyed good weather and much increased tonnages, but this has gone hand in hand with an increase in demand, particularly for raisins, so some origins such as South Africa continue to be withdrawn.

The US raisin market continues to appear overheated from a European perspective, but the shortage this year, comes following several years of reduced acreages given over to raisin production and several seasons of poor returns for producers. It seems unlikely therefore that prices of US Thompson seedless raisins will reduce anytime soon and price levels of USD1.7 – USD1.8 per lb. C&F Felixstowe continue to be commonplace.

The difficult year ahead should in theory provide opportunities for other producers, including Iran and China. The recent currency fluctuations in Iran between the local Iranian currency the Rial and the US Dollar have prompted the local authorities to create a new system that obliges exporters to sell hard currency they have obtained from export deals back into the local banking system. This may discourage trade, as a number of International banks have indicated that they be unwilling to carry out business with Iranian exporters. It seems unlikely therefore that Iranian sultanas and raisins will be a substitute for the Turkish or US equivalent for the time being.

In conclusion UK buyers need to be cautious and perhaps have longer or greater forward cover than in an average year, particularly if they have firm forward sales. There is also the added uncertainty of the local Brexit negotiations, although the impact of any decision is still some way ahead and unconfirmed!