FX   Monthly movement

US$/£1.63 from 1.59

US$/€ 1.43 up from 1.41

£/€ 1.14 unchanged

The above figures obscure what has been a very volatile month for FX. The € has gained 8 points and lost 6 in the month, and if the timing had been correct in purchases in the € zone a 5% reduction in pricing would have been possible, almost one day to the next! The US$ is still remaining stronger than expected, perhaps an indication of the uncertain world we live in at present. This strength is expected to correct at some time during 2011 and continue into 2012, with a decline in the £/$ rate of around 10%. Equally the € is expected to weaken further against both £ and $.

Pumpkinseed kernels: Little change, the position is dominated by poor demand from Europe and prices are stable at the lower level. The sowing season is soon upon us and if the market poor, with high stocks and low demand plantings will be reduced for more easily marketable products.

Sunflower seed kernels:  High stocks in Eastern Europe have seen prices weaken in this region, partly due to declining prices in China and poor demand. China has now stabilised due to domestic demand, but European interest is poor. The USA and Argentina remain firm, due to lack of material to supply and increased pressure on land for alternative crops. As previously mentioned Eastern Europe will become the major producer going forward, and with a significant stock holding and many companies looking to enter the market the situation looks aggressive and price may well continue to slide. Since it is predominantly a € based region, this assists with FX volatility.

Linseed: Stable market, with little new crop weakness for European grown material which will avoid all the GM issues still haunting Canada and dubious Eastern European sources reselling Canadian. The UK is suffering a drought, particularly in Eastern England where in the last 3 months rainfall is 30 % of normal. This is the planting season and there is concern that if rainfall does not pick up soon, it will damage yield.

Sesame seed: India the summer crop is much smaller than last year due to a reduced planting area, and poorer yields. We believe it will be 34000mt compared to 60000mt. Overall plantings in India, for this season, are down 20% across the two crops. The Korean tender of 12000mt was awarded fully to India last week. Africa still has stocks but they are reluctant to drop prices knowing China still has to buy. So no real strength in Indian sesame at present, plenty of availability.

Central American Venezuela has produced around 20000mt, but shipment issues still dominate from this region. Paraguay has had an average crop, but exports only natural with Japan being the major buyer and as usual they are prepared to pay premium prices. Guatemala still has premium seed to sell, be it at high levels. For a premium grade over Indian material Venezuelan provides a good alternative at present.

Hulled millet: Ukraine is looking to import hulled millet now, since supply is so limited and expensive. The USA situation is very tight, only a few containers remaining, and new crop plantings will be lower due to pressure from other crops. Do not expect prices to fall anytime soon!

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We hope this brief update assists and look forward to hearing from you in due course.

Telephone 0044 (0)1372 230020
Fax: 0044 (0)1372 748597.
 www.unicorningredients.com