It was good to see some of you at IFE last month in London. Hopefully further face to face meetings will be held in the coming months.
Generally we have seen demand return in March to previous levels after five months of weakness. We believe the cause of the slowdown was due to a general overstocking of ingredients throughout the supply chain. This potentially will lead to a tightening of availability generally, so we would recommend orders are placed well in advance for the next few months to avoid disappointment.
We continue our Tree planting scheme with Oblong Trees, offsetting the company carbon production through commuting, travelling and general office use. This is a 10 year scheme, and trees are planted in UK, Indonesia, Kenya and elsewhere.
Attention is turning to new crop expectations since sowing is due to take place. From sales of planting seed we can see a significant reduction in GWS grades being chosen by farmers. This is a continued trend now for several years. GWS are only really for the export market, whereas Shine skin have a ready domestic requirement. Some forecasts reduce the expected volume of GWS by 50% over 2022, meaning just a few thousand metric tonnes will be harvested. This will drive a significant price gap between the two varieties. Traditionally GWS trades at a premium to Shine skin, although this season we see otherwise due to sluggish export demand.
The availability of EU compliant organic pumpkin is becoming ever more challenging, and several suppliers are withdrawing from this market.
Prices remain stable as there are ample supplies from Kazakhstan even though we are seeing an uplift in demand. It is proving challenging to meet EU direct consumption levels for HCN of < 150mg/kg. Despite heat treatment, this is an industry wide challenge.
The market is behaving very unconventionally. Due to the high prices, planting in India for the summer crop was up nearly 100%. It has been damaged to some extent by unseasonal weather patterns. Demand for sesame has been weak from EU/USA countries too however.
In the USA, the import authorities are paying particular attention to pesticide levels in seed from all origins, which is resulting in several rejections and refused import permits. Suppliers get blacklisted if found to have shipped non conforming cargo. In the EU we see plenty of non conforming cargo from African and Turkish shippers.
Tender demand from South Korea keeps the market firmer than it feels it should be at present, with a lack of significant buying interest from anywhere else.
Demand is weak currently, but in some ways this is good since we are expecting availability for good quality material to decline as we approach summer. Whilst we see some firmness in origin pricing, logistic costs are reducing keeping the price level stable.
In EU we are aware of cheap Russian imports attracting some clients. Offers are significantly below material genuinely sourced from Ukraine or Poland.
Prices remain relatively stable with some smaller players discounting the market slightly. The general feeling is supplies from Ukraine should be OK for 2023 harvest, and as long as the grain corridors stay open, seeds will flow to the global market for the oil trade.
It is some concern that southern Europe is entering the planting season suffering a drought, which may impact yields if it continues into the Spring and early summer.
Demand from China has returned and is as strong as ever and is becoming the focal market for many processors.
We are genuinely concerned as to where poppy supplies are going to come from for 2023 season. All regions have reduced their production significantly, as a consequence to poor demand for alkaloid. To some extent the decline in demand from Ukraine and Russia has helped, but there is no reason this will not return, and poppy will be extremely short.
Harvesting ends in Peru late April. The crop is smaller than last season, as exports fell 15% and farmers switched to more lucrative crops. Bolivia will follow in a couple of months, and is dependent on the weather. Last year a severe drought impacted yields.
Quinoa is under scrutiny in the USA for pesticide levels currently, where limits are tighter than in the EU. To meet requirements shippers send organic material, at premium prices.
Good quality chia is hard to come by now as we approach the end of the season, this is particularly true for organic material. South America will start planting soon which will then give a view on new season availability and pricing. We are seeing an increasing crop area of good quality material from northern India, where pricing looks attractive in comparison.
White chia volumes from Paraguay and Bolivia look promising compared to last year and new crop availability should be around August for shipment.