Turkish Grain Board and the largest grower co-operative will pay a minimum of TRY10 (USD1.75) per kilo to farmers and producers.
The perceived aim is to bring stability to the dried fruit market and discourage sellers from drastically reducing prices to obtain export contracts. The strategy seems to have worked, albeit in the short term, as prices have increased by between USD50-100 per tonne for specially cleaned standard No. 9 sultanas. This gives an export price of between USD2,000-2,050/tonne fob Izmir.
The weakness of the Turkish lira against the US dollar has put further upward pressure on prices. The Central Bank in Turkey has reduced interest rates from previous high levels in an effort to turbocharge the economy and the bullish attitude for dried fruit prices suggests that further price increases may be in the pipeline.
The UK dried fruit industry has become heavily dependent on Turkey as the principal supplier, so in the short term, buyers may have to absorb the higher prices. In the longer term however, there may be an opportunity for other less expensive producers such as China and Iran to take advantage of the high Turkish prices.
Imports from Iran have fallen dramatically in recent years, but in the past Iran was a major supplier to both Germany and the UK. Improvements in the quality of Chinese fruit and an increase in the tonnage of South African vine fruits should help to provide UK buyers with alternatives in the future. South Africa is looking to increase exports to the UK in the coming year and the establishment of a marketing body in the UK will be a welcome first step to this aim.
The harvest of the Turkish dried fig crop is now virtually complete. The threat of rain may reduce the overall tonnage, but so far reports are that the quality of the fruit is exceptional. Prices for both natural and Lerida figs have fallen, although not dramatically as packers are busy waiting to export on the first vessels which will leave Izmir in the coming few days. Turkey has found a number of new markets for its dried figs and this year’s bumper crop should help develop sales. As an indication prices of No. 6 Lerida figs are between USD4,250-4,500/tonne fob Izmir.
The Greek currants harvest has also gone well and first new season shipments have now arrived in the UK. Greece is in reality, the only major producer of dried vine fruits in the EU and the UK continues to be the largest export customer. The trade in Greek currants could therefore be badly hit if tariffs increase as a result of a ‘hard Brexit’ when the UK separates from the EU.
This year’s crop should exceed 20,000 tonnes and although prices have not fallen dramatically there has been a reduction in recent days. The number of independent packers of Greek currants and sultanas has steadily decreased with the result that a large percentage of exports are now made by the Union of Vostizza. This Union has been responsible for many of the improvements in the industry and its modernisation and it is to be hoped that an agreement will be made whereby the UK can continue to purchase currants without duty being payable. As an indication, good quality ‘provincial’ currants are being quoted between EUR2,450-2,550 (USD2,679-2,788) per tonne fob Piraeus.
Prices of US raisins remain steady despite the prediction of a much smaller new crop. The major US producers are keen to recover lost sales, particularly to the UK. Most major UK retailers have, however, moved away from the more expensive US fruit, preferring to purchase Turkish raisins, which up until today have been in plentiful supply. The possible drop in the production of Turkish raisins and the unexpected increase in prices should however present an opportunity. The US will however, go head to head with the new South African marketing campaign and it will be interesting to see if both counties increase sales of their new crop fruit to the UK.