It was a hectic period around Easter for ADW Fresh Trade. Not only because of the Easter sales rush, but particularly due to major disruptions in air freight caused by the conflict in Iran. "At the moment, we are working a lot with mangetout and beans from Kenya, but there is simply a shortage of available air freight capacity, which is considerably hampering supply," says Ive Lambert of the Flemish importer, which continued under this name last year following the merger of Starfruit and Central Fruit.
"All flights to and from the Middle East have been cancelled, removing important logistics links," he continues. "While some connections are being restarted, the recovery is not yet running smoothly and remains far from previous levels. As a result, pressure on available capacity remains high."
© ADW Fresh Trade
This comes on top of a difficult period in Kenyan production. "They have had an awful lot of rainfall in recent weeks. They have suffered quite a bit from that, but production was actually just starting to improve when this issue came on top of it. As a result, supply remains difficult to manage."
Sharp rise in air freight
This is also having a clear impact on pricing. "Almost all costs are rising, but for air cargo products we are seeing increases of around 50 per cent," Ive explains. "Kerosene prices have risen sharply, and, in addition, land transport costs have also increased, both towards the airport and towards the customer. This accumulation of costs is making everything considerably more expensive, and I expect this to continue for some time."
"When you see that diesel prices have increased by another 20 cents today, you wonder where it will end. We are seeing diesel surcharges of up to 44 per cent. Passing on these costs in full is hardly feasible. Some customers show understanding, but others do not fully realise that these increases are unavoidable and affect the entire chain."
Ive expects that even if the situation stabilises quickly, the effects will be felt for a long time. "For example, look at the availability of fertilisers, for which many countries have introduced export restrictions. This could directly affect future harvests, making them smaller or more difficult to achieve in certain regions. The impact could certainly extend into the next season."
© ADW Fresh Trade
Quality differences in the lime market
Will these consequences also be seen in limes? "Not directly. It is generally not an air cargo product, but we do see that the market remains on the low side. So far, supply has been relatively high for this time of year. In addition, there are clear quality differences between limes from the north and the south of Brazil. Product from the north is generally of good quality, with a strong green colour, while limes from the south are often more yellow and lower in quality, especially when shipments are delayed."
"This is currently distorting the market and delaying price recovery. At the same time, I do expect the market could pick up somewhat in the coming period. If demand increases as summer approaches and weather conditions improve, sales will rise. The market is therefore expected to recover cautiously, although most likely gradually and within the limits of current conditions."
For more information:
ADW Fresh Trade
Hoveniersstraat 13
2860 Sint-Katelijne-Waver, Belgium
Tel: +32 2 242 62 00
[email protected]
www.groupadw.be/adw-fresh-trade/
