Currency update

The EU is struggling the most in these current trading conditions, with Germany announcing its first trade deficit in 30 years, and the Euro at its weakest point against the US dollar in ten years. The trade shock of rising import costs, oil & gas price levels and trade disruptions have come to bear severely. Euro zone inflation is rapidly increasing too.

Sterling is not in a much better place with inflation targets ever increasing, and expected now to exceed 11%, something not experienced here since the 1980’s. This is before a lot of the food price increases come to bear in the marketplace. Interest rates have increased by a factor of 5 this year already. The Government remains under pressure to ease the situation on consumers with tax cuts, but it is hard to see that there is much opportunity as the impact of Covid on Government borrowing, and the increased cost of servicing this debt put Government finances under strain. Sterling is at its weakest against the US Dollar since 2008.

The US Dollar is still the safe haven of choice and has strengthened 4% in the month. Whilst this cheapens exports it increases the cost of imports for many nations, but certainly adds to the dollar strength.

FX Monthly movement

  • US$/ £ 1.21
  • US$/ € 1.03
  • £/€ 1.17

General news

General uncertainty remains as to the likely demand and supply options as we approach new crop harvests. Suppliers are reluctant to sell too far forward, buyers seem cautious of demand in an environment of high inflation already. Supply chains remain disrupted and ever lengthening. Changing bureaucracy regarding import documentary requirements, especially in EU organics, and delays at arrival ports by Health officials examining more and more cargo adds unexpected cost to many imports. Nothing seems to run smoothly these days.

In addition, we see markets tending to discount nearby and trade at a premium forward. Quite an unusual situation, but indicative of overstocking nearby.

Global weather patterns are alarming too, with El Nina causing havoc is Australia and other Southern Hemisphere regions, when combined with climate change, whilst Northern Italy declares a crisis of drought impacting 30% of the countries agricultural production, and most of Southern Europe basking in unseasonal warm weather.

Lastly the undoubted uncertainty of what will or will not be available ex Russia, Ukraine come the new harvest and political unrest in Kazakhstan and Uzbekistan pushes us to source conventional material from unconventional supply origins which are all further away and more complex.

It is going to be an interesting season!

Pumpkinseed kernels

Change is in the air!

After steadily escalating prices the market has stalled, and even declined on some grades. Other grades, such as snow white, are sold out until new crop. The availability of free stock is minimal now, processors are selling off their last few containers and the remainder is in the hands of speculators. The market is full of expectation that the USA will be removing the 25% duty rate on pumpkin. This some feel will trigger a buying spree in turn firming prices, but new crop and good supply is approaching, and we could see prices ease. Which way it goes is anyone’s guess.

The crop looks good, but suppliers are not rushing to sell the future positions and gamble their businesses and reputations. China remains largely isolated from international input due to COVID. Overseas travel or overseas visitors are unlikely to return until 2023, meaning buyers and suppliers have not met for three years. Supply relations have changed, defaults and quality issues have occurred, and relationships changed.

Freight rates remain very uncertain, and no origin shipper takes this risk, so it remains in the hands of the importers, and can easily erode a trading margin.


The new season supply is going to be fraught with supply chain issues, if we remain reliant on Kazakhstan as the primary supply. How do we get steady shipments from this region without routing it through Russia? How do we know the seed is from this region and not from Russia where exports are restricted, and duties imposed on material?

Certainly, we have material from different regions coming forward, India, Turkey (ex Kazakhstan) and elsewhere, but supply chains are long and complex. There will be some EU crop too, but how much we don’t know. There is good availability currently but we are picking up issues with pesticide residues as sources struggle for supply, or use up stocks from Russia which have no other home.

Golden linseed looks particularly critical at present, with Russia having been a primary source of this material.

Organic flaxseed is a little easier with further a field regions able to supply.

Sesame seed

We are between seasons now, and the market reacts to the Asian tenders now. China recently placed a contract for 12,000mt which unusually went to India. These goods are routed through Vietnam or other neighbouring countries to avoid import duty, but it has warned the market of poor harvests in the smaller crops of Mozambique and Tanzania where China would expect to buy this time of year. These regions also have a reputation on pesticide contamination and are not favoured by Indian hullers.

The next harvest is in China in August, this should relieve pressure on international supplies whilst they utilise their own crop. India will harvest in October, the monsoon is underway, and planting will commence soon. Unseasonal heat pre monsoon was of serious concern, but sesame likes heat and dryness. After India comes Sudan, Ethiopia and Nigeria in November, followed by Central America. For now, however market will respond to buying demand and weather speculation.

Freight availability is a major concern too. From India this month there are currently only two vessels EU bound which is insufficient and thus freight rates from India exceed those from China.

Hulled Millet

There is suddenly plenty of stock around, which will keep supplies steady for the remainder of 2022. Ukraine has a reduced harvest, approximately 60% of normal, but suppliers are determined to main a supply route. The concern is how confident can we be that forward contracts will physically be supplied knowing best intentions are to do so. The USA as an alternative is expensive, and operationally not really performing well or in quantity to plug the gap now. So this item remains vulnerable above all others. The unseasonal heat will impact on the reduced area planted too.


We all know the story here and the impact on sunflower oil prices which directly impacts the kernel market. The situation is volatile and uncertain, and really quite difficult to predict. The fundamentals are for a reduced supply, strong demand, and a bullish sentiment is in place. But prices have declined. Raw material supply is difficult, farmers see the possibility of higher prices, consumers are mainly uncovered for the new season. Few processors are able to confidently supply forward future contracts, and globally the crop is projected to be 7-7.5 million tonnes shorter.

But nearby prices have reduced, and this has dragged the forward market down too.


Beginning to look like a one-way street, with supplies from all EU countries reduced and in the major growing regions by 35%. We see a similar crop reduction in Turkey, where exports are unlikely to reach 3000mt this season. Compound this with the limited Australian crop that, whilst not sown, will be very reduced means we are looking at a global shortfall in poppy availability for the remainder of 2022 and the whole of 2023. Prices have leapt up and will keep going into the season. There are small crops available in different parts of the world, but not sufficient to meet demand in our view.  We have seen this situation in poppy before and this season we could see price records broken in our view.


We have previously reported that the planting area was reduced this season after poor demand from the USA. This has been compounded by drought impacting the yield. So availability is likely to be a problem as the season progresses. Already prices have increased 20%, and this is further impacted by freight cost and availability. Red & Black quinoa whilst available in larger quantities than last season, are seeing demand increase as China emerges from covid restrictions.


Good weather and no early frost have given optimism to the harvest this year, which is about underway. Yields look good at 0.5-0.8mt/hectare in Paraguay. If the weather holds the crop will be good and prices will stabilise. Freight, like Quinoa, is a major concern. Not only cost but actual availability and supply chain length. This impacts the lesser destinations more significantly. We believe good contracts have already been placed by USA buyers, helping to produce a baseline to prices, for at least the foreseeable future.

Get in touch

Frank Horan
Frank HoranDirector
Nikki Divers
Nikki DiversDirector
Jake Yerrell
Jake YerrellCommercial Manager
Vera Grosse-Drieling
Vera Grosse-DrielingCommercial Manager
Micaela Camantigue
Micaela CamantigueAccount Manager