Offshore easy peeler market softening

The easy peeler market has softened in the last week owing to a confluence of factors. First, weeks 26 and 27 saw heavy USEC arrivals of clementines from Chile complemented by 2,000 metric tons that arrived aboard the first two South African bulk vessels and by an estimated 2,600 metric tons of clementines, satsumas and W Murcotts that arrived from Peru. These arrivals came just as retailers were focused on building their summer fruit displays for the July 4 festivities and paying less attention to their citrus offerings. Add to this the natural “hangover” in retail sales that invariably follows a holiday due to retailers taking stock…literally…before resuming orders in the normal course. The result was a full soft citrus pipeline and, by week 28, the first appreciable accumulation of inventory.

Through week 27, Chile loaded 49,827 metric tons of clementines to the US (all ports of arrival) representing a 42.9% increase over the same period last season. Of this volume, 57% or 28,489 metric tons were directed to the USEC and 43% or 21,338 were sent to the USWC. Over the same period, South Africa loaded 6,000 metric tons of easy peelers (all to the USEC). Peru has loaded over 16,000 metric tons of soft citrus to the USEC consisting of clementines, satsumas, Clemenvillas and the earliest of its W. Murcotts and Tangos, a 48% increase over the same period last season. Peruvian sources shipped 1,775 metric tons of a similar mix of easy peelers to the USWC, up 17% over last season.

Given the heavy volumes which, in the case of Chile and Peru, represent substantial increases over last season, the market has performed remarkably well. But the fact remains that soft citrus spot prices will always react quickly and efficiently to immediate industry inventory levels.

Through week 28, easy peeler prices for 10 x 3 lbs bags were at US$ 32 – 34 (mostly US$ 32) for standard sizes 1’s, 2’s, 3’s and 4’s. Smaller caliber size 5’s were selling lower at US$ 30 – 32 (mostly US$ 30). By midweek, prices started to soften and deals were available at US$ 26 – 28 as some sellers were looking to adjust their inventory to more comfortable levels. Prices on the USWC are at similar levels, perhaps slightly firmer.

The Chilean clementine harvest is coming to an end. Heavy rains throughout Chile in week 27 brought packing to a standstill such that loadings in week 28 and onward are likely to be very light. But there is still a good volume of Chilean clementines to arrive through the month of July. In addition, Peruvian W. Murcotts and Tangos arrivals are picking up and will dominate the late-July and August market until the Chilean late mandarins begin to arrive. There is no shortage of easy peelers in the USEC forecast.

The imported navel orange market has begun to gather momentum with most retailers having made the switch to imported sources. Two South African bulk vessels have arrived on the USEC and have discharged their cargo and the third will arrive in week 29. When that vessel discharges, South Africa will have landed 13,000 pallets (15,600 metric tons) of navel oranges on the USEC.

Through week 27, Chilean sources have loaded 12,994 metric tons of navel oranges to the USEC, a decline of 12.7% over the same period last year. Chilean loadings to the USWC are at 6,236 metric tons which represent a 19.8% decline from last season. Chilean sources are not expected to load heavily in week 28, but will resume loading in week 29.

Navel movement on the USEC is moderate and prices reflect the higher proportion of small calibers. While sizes 88 and smaller form only 25% of the total South African navel arrivals through week 28, Chilean arrivals are principally comprised of early, and congenitally small, Fukumotos. As a result, Chile’s earliest arrivals for the transactional market are skewed as high as 70% to 88’s and smaller. This will correct itself as the harvest proceeds and converts to other varieties. But in the short term, small navels will face some market pressure.

Through week 28, large caliber fruit (40’s, 48’s and 56’s) are selling at US$ 30 – 32 (mostly US$ 30), 64’s are at US$ 24 – 26 (mostly US$ 26), 72’s are at US$ 24 - 26 (mostly US$ 24) and 88’s are at US$ 22 – 24 (mostly US$ 22). Bagged navels in a 9 x 3 lbs configuration are at US$ 24 - 26 (mostly US$ 24).

The USWC has not seen any substantial arrivals and a stable market has not yet been established. Nonetheless, it appears that for the time being, on limited sales, prices are running US$ 2 – 3 higher than the USEC imported navel orange price level.

With arrivals from both Chile and South Africa next week, we expect to see prices on the USEC soften somewhat as we enter week 29 with most pressure on size 88’s and bags where the prevailing week 28 price could drop by US$ 2.

The Southern California lemon crop (District 2) continues to move at a faster pace and while lemon shippers say they can extend their lemons, summer heat will determine how fast fruit needs to come off the trees and how quickly the crop is depleted. We are led to believe that by mid August, California lemons will be done.

The imported lemon market remains strong and is perhaps even strengthening. Chilean lemons are selling well on the USEC at US$ 42 - 46 for 95’s and 115’s, grade depending. Sizes 140 and 165 are selling at US$ 34 – 38, grade depending.

Chilean shipments to the USA through week 27 remain substantially lower than last season. But, the pace of loading to the USA has increased in recent weeks and some of this shortfall will inevitably be made up.

For more information:

Mark Greenberg 

Tel: +1 (514) 739-9181