21st June 2018 – Low Lira Reduces Impact of Rise in Turkish Dried Vine Fruit Prices

Fluctuations in the value of the Turkish lira against the dollar have had a significant impact on the purchase price of the different types of dried fruits.

The Turkish Lira has been subject to significant changes this year with a dramatic reduction in its value against the US dollar. The Turkish national elections due to take place at the end of this month may increase the value of the Turkish lira if international financial markets believe that the result of the election will have a positive impact on the economy. In the meantime, the low value of the lira has helped soften the impact of increases in Turkish raw materials.

Meanwhile, continued uncertainty over the Brexit process is also having a negative impact on the value of pound, as are the mixed messages of possible interest rate rises regularly sent out but not implemented by the Bank of England.

As reported previously the new crop of Turkish sultanas and raisins has been progressing well. In recent weeks however there have been sporadic hail and heavy rains in some of the important growing areas around Izmir. Overall damage had been reported to be light but in recent days prices on the local Izmir bourse have continued to advance as farmers and speculators predict a general hardening in the cost of dried vine fruits. Packers seem content to offer forward for prompt shipment at levels between USD1,800-1,900 per tonne fob for specially cleaned type No.9 sultanas but are more cautious going further forward as there is a growing air of uncertainty about the size and availability of this year’s Turkish new vine fruit crop.

Unsold stocks of Turkish raisins are limited with high prices now being quoted and some packers fully sold out. The same is true for Thompson seedless raisins from South Africa although there seems to be a slight softening in prices of Thompson seedless raisins from the US.

Exports of US Thompson seedless raisins from August 1 2017 to May 31 2018 have reached a total figure of 77,491 short tons with a total 19,693 tons being exported to European countries and 3,918 tons to Latin America and 53,829 tons to ‘other countries’ including China and Japan. This is a reduction year-on-year of 15% and reflects the high price of US raisins compared with other less expensive origins. The reduction to Europe however is much higher at 32% whereas the reduction to ‘other countries’ is only 4%. This year has seen an actual increase in sales to Japan from 23,768 tons to 27,915 tons making Japan by far the largest export market for US raisins. This compares with exports to the UK for the same period of only 5,266 tons.

The UK does however continue to import over 100,000 tonnes of dried vine fruits making the UK market the largest user per capita of dried vine fruits outside the US. Turkey has for several years supplied the bulk of the UK’s requirements and it is therefore a concern if supply this year may be insufficient to meet demand.

News from Greece continues to suggest that this year’s crop of currants will be up to 20% larger than last year but again, packers are reluctant to offer prices for new crop, preferring to wait until the fruit is safely harvested and a field price for the raw material agreed. There remains a continuing shortage of Greek currants on the UK spot market, but so far major manufacturers have been able to substitute other fruits such as midget raisins as an alternative. There has not therefore to date been a negative impact for consumers. It is likely however that prices of currants will increase in the coming months as retailers and manufacturers need to rely on new contracts based on much higher buying prices. The result of this increase in price remains to be seen.