Price of easy peelers underwhelming
As the closing weeks of this roller coaster of a citrus season approach, the easy peeler market is well supplied and remarkably stable, although at price levels that are decidedly underwhelming.
Through Week 37, Chilean late mandarin loadings were up 36% to the USEC and up 66% to the USWC, all as compared to the same week last season. In spite of the fast and furious pace of arrivals, and in spite of the threat of an early start to the California clementine deal, the market has remained at the US$ 32 – 34 (mostly US$ 34) level and is likely to remain there for the next couple of weeks as the heavy Chilean W. Murcott volumes that were loaded in Weeks 35 and 36 hit the market in Weeks 38 through 40.
Chilean soft citrus loadings in Week 37 and 38 will be light due principally to the intervening Chilean National Holiday as well as to the fact that the Chilean late mandarin harvest is coming to what may well be an abrupt end.
For their part, California clementine producers are predicting that they will have fruit available in Week 42. But one must remain wary of this prediction. After all, domestic producers like to have the market clear of imported products when their fruit starts to ship and if imports are frightened out of the market a few weeks early, so much the better. But it is also in the interest of imported soft citrus sellers to get out of the market and make way for the domestic product as most retailers will make the switch the moment they can, even for fruit that has been subject to aggressive de-greening.
The result of this could be a short term, transitional, shortage of easy peelers in the market which could potentially send prices higher in mid-October as retailers try to stay in stock, waiting for the start of the California clementine crop. Shippers may be inclined to urge their receivers to conserve scarce fruit and play for that momentary up-tick in price that may (or may not) come to pass. But in our view, the winning strategy will be to resist that temptation and to keep selling with the intention of clearing imported stocks by the first week of November.
Navel orange market is strengthening
The imported navel orange deal has also had its share of challenges and disappointments this year. Through Week 38, Chilean navel orange loadings to the USEC were up by almost 25% over last season while loadings to the USWC were down by almost 3%. Despite industry expectations that California navel oranges would not go beyond June this year, they in fact remained available through July. But South African shippers, facing a generally early (and small sized) navel crop, shipped substantial volumes to the USEC earlier than the market could digest the product. Chilean shippers, also facing an early navel season, hit the market with heavy, early volumes. The result has been chronic high inventories of imported navel oranges since the start of the season, which gave rise to generally soft price levels throughout the summer.
But the navel orange market is finally strengthening as inventories are coming back into line. There are a number of reasons for this. First, in mid-summer the South African shippers were so concerned about market conditions in the US that they canceled their last bulk vessel of oranges and diverted the cargo to other markets. In addition, South African shippers are sending fewer of their already scarce Midknights to the US. Finally, the Chilean navel orange harvest is ending earlier than previously expected.
The result is that the market for large caliber oranges in Week 38 is firming-up with 40’s, 48’s and 56’s moving to a more solid US$ 22 and trying to push up to US$ 24. Smaller calibers are selling at US$ 19 – 20. With supplies remaining plentiful, the small fruit price is not likely to move too far from its current level.
California navels are expected to start becoming available in mid-October with many East Coast chains likely to make the switch in the first week of November. Those chains that eschew heavily gassed fruit will delay their switchover until the middle of November, or for as long as supplies last. West Coast retailers will likely make the switch one week earlier than the East Coast.
For more information:
Mark Greenberg
Capespan North America
Tel: (+1) 514-739-9181
