Ingredients Market Report: May 2025
General news
The disruption of long held trade agreements continues, although too some extent business is returning with a ‘just keep going’ attitude. The new USA tariff regime has in part been suspended with numerous discussions taking part. The next major change will be in July when theoretically reciprocal tariffs will come back into play, but we expect there will be multiple announcements before then.
Certainly, the US dollar has weakened against most foreign currencies providing some opportunity to buy US$ based commodities for these regions, although export prices for the same products might increase a little.
What impact on global commodity plantings is yet to be fully established, although we hear the US farmers are already planting larger quantities of sunflower seed for oil crushing and perhaps China is reducing areas for products where final market was USA companies. But it is still early and hard to draw too many conclusions from these announcements.
What is happening is further supply chain disruption as freight routes see diminishing traffic, vessels get reassigned and as usual it seems to add uncertainty and time to all journeys. Some good news in that it seems the Suez might soon be safe for container vessels again which will hopefully improve transit times.
A growing general trend is the reluctance of exporters to sell to EU, UK, USA markets having seen easier opportunities in Russia, India and elsewhere. The differential in price is becoming very significant since the risk in meeting tightened regulations is becoming to severe.
Pumpkinseed kernels
Undoubtedly there is some change in the planting habits of Chinese farmers. There is some switching in grades and qualities to ensure supply for assured markets. Overall area planted could be 50% down with reduction particularly in shine skin and GWS grades. This is partly due to the bumper harvest last season and carryover stocks in speculators hands. It is tricky to see how prices can fall further, and in fact we expect the gap between cheaper grades and the premium ones to narrow as demand switches here.
We fully expect next season to be priced higher than the current one for pesticide compliant material.
It is interesting to note that both Russia and India have seen dramatic increases in imports this season, reaching c. 20,000mt each. These are relatively new markets and add strong alternative markets for Chinese farmers.
Linseed
Prices for both brown and golden have increased steadily in the past few weeks, particularly the golden varieties which are in short supply. Overall, the availability of good quality seed is declining.
With steadily rising duty rates on Russian material and pending tariffs this is an item which might give Canadian suppliers a chance to be competitive in the EU/UK again. Time will tell, but certainly it is one to watch.
In India material is coming to market but has unusually high moisture which might impact quality. We should determine this during May.
Sesame seed
Indian has had a good summer crop although whilst harvesting is continuing, they have started very early monsoon rain which is bad for sesame quality. It will be impacted but probably not materially. In the meantime, India buys extremely cheap Brazilian seed for its own consumption. The quality is generally not suitable for EU/UK/USA markets, but it is depressing prices. Good crops are due in Mozambique & Tanzania which will supply premium buyers of natural seed.
Pakistan continues to supply the Chinese market competitively and looks to break into the hulled market. But with prices so competitive from traditional sellers of premium material the appetite to change source, of what is a challenging ingredient, is low.
Hulled Millet
Currently sellers are trying to clear this years crop and prices are weak. The new season looks similar. Planting is continuing in Ukraine and the forecasted area is expected to be similar to 2024 with a similar yield total. The conditions are favourable currently, so all looks good so far. Demand for millet from Ukraine is increasing and this will be the driver as we progress through the season. The price is likely to react to strong demand. Whilst it is possible to see some downward movement the upward potential is now significantly greater.
Sunflower
Stocks are declining and some processors of kernels are closed until new crop. EU forecasts are optimistic for the 2025 harvest. USA farmers are reportedly planting more, as already mentioned, so on the surface prices look set to decline. But it would be right to say there is nervousness after the disastrous weather of 2024 causing such a severe shortage of suitable raw material stock. So we have a true weather market for sunflower, and kernels production will depend on seed size which is also weather dependent, doubling the impact on this sector compared to the crushing market.
Prices have drifted lower since the highs of early 2025, due to reluctant demand, but a squeeze in availability in July & August is still potentially on the cards.
Certainly dry weather will firm this market rapidly in the coming weeks.
Poppy
EU new crops will be arriving July/August but we are not yet hearing significant price reductions. The alkaloid producers are installing machinery to reduce alkaloid levels which will add a premium to their material bringing it in line with the Czech Republic where prices have remained robust this season. We do not see much room for downward corrections currently. South hemisphere supplies do not arrive until the end of the calendar year. So we would expect a’ steady as she goes’ approach for now.
Quinoa
New crop arrivals, impacted by wet weather have meant in this period of high demand, prices have remained high. Carryover of EU compliant material is limited too. As sales at these levels continue there is no rush for farmers or processors to drop prices. As the harvest proceeds and availability increases there is a possibility, but this is by no means certain. Be careful of being too low on cover.
