Ingredients Market Report: August 2023

General news

Markets are looking firmer generally despite new crops being on the horizon. For a variety of reasons from different areas we are off the bottom generally. Freight rates are also starting to climb as shipping lines withdraw sailings whilst also bring additional vessels into play due to the increased demand previously experienced.

Organic seeds are becoming increasingly challenging to achieve correct analysis results, so we encourage clients to stay well covered forward.

Pumpkinseed kernels

The market remains quite lacklustre, with poor demand and flat pricing. The shine skin crop is looking very good with increased plantings and a higher yield forecast. However domestic demand is expected to increase next month which will prevent a significant price drop.

For GWS there is little carryover and the forecasted crop is significantly down on last year. Some predict by 50%. There is little chance therefore of further price drops since the volume is so low, and if demand picks up we could see a widening differential between the two grades.

Organic pumpkin is now sold out in China and there is almost no inventory in EU/UK. The crop is smaller than last year so again, we see supply a challenge, prices stable or upward and slow logistics whilst consignments await extensive analysis.

Linseed

Exports from the last crop are reportedly 31% higher than the previous season driven mainly by demand from China ex Kazakhstan. The spot market has weakened recently as traders liquidate stock in anticipation of the new harvest which is expected to be smaller than last year. There is a carryover which will continue to supply the market through the remains of 2023, but the fundamentals point to firming prices as demand picks up, which it is already showing signs of.

There is a concern over pesticide levels this season in the raw material remaining from the 2022 crop.

Sesame seed

The market remains persistently strong supported by domestic demand and tenders from Asia. There is little chance of a decline in the coming weeks. All old stock is now in the warehouses of processors and stockists, so demand will drive the price until new crop. The inclement weather has delayed and damaged plantings in India, which are expected to be up on 2022 due to the encouraging price levels.

The latest tender was split between; India, Pakistan, China and Nigeria all at similar levels.

In Africa the political instability across the sesame belt; Sudan, Nigeria, Niger, Burkino Faso continues additionally hampered by frustrating logistical arrangements.

EU/UK testing on importation still remains a hindrance to imports from India and Africa adding up to three weeks to the transit time. It is definitely discouraging suppliers from this market due to the difficulties encountered compared to the rest of the world.

Hulled Millet

Uncertainty over the Ukraine situation is impacting forward business and is likely to continue for sometime. Ukraine remains the major supplier to EU, despite the ban by some nations on their borders in an attempt to support prices locally. EU supplies are now short with Polish stocks low, but new crop coming next month. It is expected to trade initially at least at a premium.

Perhaps surprisingly Russian imports into the EU have increased significantly since the start of the conflict, obviously due to a heavily discounted price attracting some buyers. This is not possible in UK where an import duty of 35% was imposed on Russian material.  But it does present a very significant two tier market.

Due to the challenges the amount of organic material is limited this season.

Sunflower

The closure of the Ukrainian export grain corridor is the major factor in escalating sunflower seed and oil markets, and this has impacted kernels too. Both commodity prices and the freight costs are climbing. Part of the problem is that with harvest a few weeks away, storage facilities are limited and where is the crop put?

The situation is not helped by the severe heat and drought over the region which will impact yields, although advancing harvest a little.

Chinese sunflower whilst almost out of stock should be available in adequate quantities and will follow global pricing trends.

Poppy

All news is gloomy with crop forecasts reducing everywhere, on what was already a tight season. It is impossible to see sufficient poppyseed being available to meet the usual demand, or even the reduced demand of the last year.

Prices are firm and starting to edge upwards. We would expect a severe upward correction when demand returns in quantity.

Quinoa

With harvesting complete in Bolivia and almost finished in Peru the anticipated reduction in availability of 25% is manifesting itself. This has so far stabilized prices, assisted in part by freight rate reductions. This last point is likely to reverse in Q4/2023.

Fosetyl levels continue to challenge the availability of suitable organic batches.

Chia

Breaking the trend, the weather has been favourable for Chia in South America and a good crop is expected. Strong demand is keeping the price firm and we do not foresee a reduction in coming weeks. In fact if demand picks up the market could firm significantly. New crop will be available for shipment from September, arriving in November. Until then supplies of good quality are arriving from alternative origins, which conveniently feels the short supply window over the Northern hemisphere summer.