3rd January 2019 – New Year Begins With Concern Over Possible Turkish Sultana Shortages

Exports of Turkish sultanas and raisins have reached around 112,000 tonnes by the end of December, a very similar amount to the same period last year. The principal differences, however, are the much higher cost this year and the smaller crop, which is estimated to be only around 240,000 tonnes.

There is a carry-over of around 25,000 tonnes from the previous crop to add to this figure. Prices have remained high as there is still a shortage of fruit on sale at the local Izmir bourse because farmers and stock-holders are holding onto their remaining stocks in the hope that prices will increase further.

The high interest rates in Turkey have meant that packers are less willing or able to hold large quantities of raw material for forward contracts, and the need to cover orders at relatively short notice has put added pressure onto prices. The value of the Turkish lira has stabilised and, with an election scheduled in Turkey in March, is likely to stay at levels around TRY5.3 to the dollar.

This is a big change from the start of the season last year when levels reached TRY7.0/USD1.00. Although it is difficult to predict the tonnage of sultanas needed for export until the new crop is harvested, last year’s figures for the same period suggest a possible requirement of between 160,000-170,000 tonnes. Indications are that there could be a shortfall or a continuing increase in cost or indeed both.

There is also a shortage this year of lighter coloured, better quality Turkish sultanas, with the local Aegean Exporters Association changing the colour parameters for the different grades from 10 to 15%.

As an indication, good quality standard number nine sultanas are quoted between USD2,100-2,150 per tonne fob Izmir for shipment through until March/April, with better grades such as standard number 10 at a significant premium, so between USD2,600-2,700/tonne fob.

The good news is that ample stocks of Turkish raisins remain at present, as farmers dried a higher percentage of their fruit as raisins this year. Prices vary from producer to producer but are generally at a premium of around USD250-300/tonne higher than standard number nine sultanas.

The new year will focus buyers’ attention on southern hemisphere production and while to date no problems have been reported by either Australia or South Africa, it is still too early to have any indication of prices. The total South African vine fruit crop last year reached over 70,000 tonnes. The major part of the tonnage is usually dried as Thompson seedless raisins, with approximately 60% of the total, with 35% for sultanas and 5% for currants.

This year’s crop may be a little less, but European buyers are hopeful that a good quantity will be available for export. Australia in contrast, produced only around 17,000 tonnes of sultanas, raisins and currants last year, but the high quality and appearance of both Australian and South African fruit should mean that there will be good demand this year.

Chile and Argentina are also both significant producers of raisins and demand for Chilean Flame raisins continues to increase year on year. The Chilean raisin crop exceeded 58,000 tonnes last year, but production varies, depending on the demand for fresh grapes. Chile is also experimenting with different varieties of grape, so there is likely to be a move away from the traditional Thompson seedless raisins. The 2018/19 crop is expected to increase, to between 60,000-65,000 tonnes, with 65% being the Flame variety.

The lack of offers or availability of Greek currants continues to worry the UK dried fruit market with very little information coming from Greece. It is a tragedy that Greece appears unable to grasp the importance of increasing its available tonnage to satisfy global demand and this perhaps reflects the result of decades of EU subsidies which have unfortunately not been linked to increased production.

Buyers have by necessity been forced to change recipes and to use other ingredients as an alternative to currants and it does seem difficult to see how Greece will now recover its market share. Prices, where available, for good quality provincial fruit range between EUR2,600-3,000/tonne (USD2,960-3,410/tonne) fob Piraeus for shipment through until March/April.