We were please to renew our BRC AA certification this past month and extend it to fully cover our offices in Germany. With no major non conformances, and only 5 minors, we feel we are well placed to meet your quality requirements on all seeds from our various regions of supply.
We are approaching the quiet season between crops where little is known about the new crops, and everything is known about the old crops.
Gulfood occurred last month and saw a 25% reduction in attendance driven by reaction to the virus, this trend is only going to develop and supply chain problems will manifest themselves from various regions as regulations are tighten to restrict the movement of people. China is re-opening slowly, but there is a 6 week hole in the supply chain, and this will hurt some suppliers. Their government will support local businesses, but this will not help the available supply through April & May.
The impact on planting etc. is as yet unknown, but it cannot be positive. China has also been preoccupied with internal issues and stayed away from global markets. This has softened some prices, but this can only be a temporary measure, and buyers should be prepared for the double negative, of poor exchange rates and rapidly escalating prices, in an environment of short stocks. Not a great picture.
Factories are more or less back to work and have received local licenses to produce. All good news. Logistic issues continue, and the implication of this, and mis positioned containers, and demand for higher value items is yet to manifest itself. We suspect it will not be good news
Prices which looked like they might ease, have stabilized and in fact this week increased slightly. It is hard to know the actual state of the supply chain, but it seems likely there will be a stock squeeze in a few weeks leading to increased prices.
Prices are up around 25% from the lows and currency is not helping. Quality continues to be a concern with micro levels and moisture/mould problems concerning. We have seen this issue on Kazak material now for several seasons, due to the wet and early winter. It seems likely prices are going to continue to push upwards, and we are a little concerned availability will become tight prior to new crop.
We would recommend covering your requirements asap.
The lack of China buying has presented a small opportunity in this market. We have seen prices drop lower as sellers look for buyers. This situation is unlikely to last, and we could see a vicious rebound as China returns to the market towards the end of the season, as they surely will.
Obviously the currency negates some of the benefit, but not all.
Prices, quality and supply are stable, with plenty of quota available from Ukraine. Interestingly due to the poor and wet crop in USA European supplies are the most competitive and we urge clients to cover now.
The supply situation in Bulgaria is easing somewhat as processors catch up with the high demand. Logistics issues are rumoured with potential road blockades towards Germany, which would lead to more container traffic as shippers look to move goods this route. Fundamentals however have not changed, and any stalling in the price is probably temporary.
The market has stabilized for a variety of reasons. Firstly, most shippers are fully committed and unable to offer further quantities. For clients with higher morphine tolerances, we see available supply, but the below 200ppm and lower material is now difficult to obtain. Turkish and Czech shippers have limited quantities to offer and have little pressure to drop prices. The new crop is still a long way away, and our initial feeling is supplies from the morphine industry are likely to be lower for 2020 harvest.
Demand has also been sluggish recently, so in our opinion, we do not see prices moving much, and as a consequence suggest clients cover their requirement to avoid unexpected price movements.
We are expecting an increase in the harvest over last year in Peru, but how much of this will actually meet EU requirements, should importers live by the regulations. The new EU regulations came into effect on Chlorpyifos after the crop was 50% planted and treated. It seems to us, that the market will split pricewise into two bands. Tightness in supply of Codex material for US/EU and cheap, non-approved offers for the remainder. Realistically, this material will arrive in EU, and be offered by those not analyzing or aware of the regulations.
Information on the 2020 harvest is scant, but we are seeing very competitive offers coming from Paraguay & Argentina putting the traditional sources of Bolivia & Peru under pressure. Certification etc is not always available from these regions and information on Glyphosate, and other pesticides is limited. We are investigating and will offer EU approved material only.