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General news

Attention is switching now to the new crops that are generally being sown in Northern Europe now. It would be far to generalise that many market are seen as good value currently and there is an expectation of an upward correction expected any moment.

This period is always difficult to assess, as old stocks are declining in availability and quality, or already in hands of processors at fixed prices. Demand is weak from consumers who are finishing their contracts prior to the new season.

Some uncertainty remains around EU regulations and trade tariffs to try and control both thew quality and control the flow of cheap product into the region, but certainly these are not going to weaken prices.

Freight rates remain stubbornly high due to the Red Sea Situation. It is difficult to see an end to this scenario in the short to medium term. Rates might drift lower but are unlikely to return to pre conflict rates for some time.

The impact of the Baltimore bridge and the flow to global traffic is a concern but hard to quantify as yet. Whilst the port was not a major import point for foodstuffs, multiple containers go through the port and obviously container vessels, so there could be a knock-on impact to global supply chains.

Pumpkinseed kernels

Sowing is starting for the 2024 harvest due in August/September. Obviously, forecasts are highly unpredictable at this time and tend to be optimistic. But plantings of shine skin are expected to increase to meet growing domestic demand, by as mush as 25% whereas GWS volumes, for export will at best remain similar to 2023 quantities. Supply of organic material will continue to get tighter as several players drop out of the market due to the PA challenges.

So, expect differentials to widen between the grades in the new season.

Old crop carryover is below last season at this time, so when demand comes for H2/2024 we could see old crop prices increase somewhat, particularly for GWS.

Linseed

The recent EU announcement about potentially applying penalty tariffs on goods from Russia, has formed the market in recent days. The timing of the duty is unclear but will very likely be applied with no notice. This will close the door to cheap imports from Russia and Belarus. It has particularly impacted the supply of golden linseed since EU buyers relied on Russian sources. The UK will feel the price increases but had duty in place to prevent Russian imports for some time. Of course, Russia will continue to supply non-EU countries, in particular China with competitively priced goods.

Lower global production generally is expected for flaxseed, so this too is adding to a general firmness in markets. India starts to look competitive again, but the length of the supply chain is a disadvantage.

Sesame seed

The small Indian summer crop is expected to start harvesting end April. The majority of this crop is black sesame, from the Gujarat region. Since this area is largely irrigated, we do not expect a major adjustment to availability, but the quantity has to last for twelve months. Indian Jet-black sesame sells at a premium due to its colour and uniformity compared to other areas. It is probably a good time to look at cover.

There is some white sesame for hulling harvesting at this time too, unusually MP has a bigger crop than usual, driven by the higher prices, but this seed may not be suitable for EU/USA markets due to pesticide levels.  India is splitting into a two-tier market, with the majority of shippers no longer interested in EU/UK markets due to the challenges in supply.  The price difference is several hundred US dollars per tonne, so cheap prices risk issues.

Alternative hulled markets are Nigeria and Central America. Nigeria is plagued with logistical issues. Despite visiting the region recently, we do not find a way to reliably move containers from factory to port in less than 7 weeks. This includes analysis prior to shipment and four weeks to get the container on a vessel.

Central America trades at a premium but is significantly better-quality seed, the supply chain is robust, but it costs more as we know.

For natural sesame there are emerging regions in Africa that are gaining markets in the EU due to the issues elsewhere; Chad, Uganda, Mozambique, but these regions do not have GFSI processing facilities so EU recleaning is required to meet current specifications.

Hulled Millet

Non GFSI facilities are discounting the market with cheap offers which adds confusion to the supply chain. These facilities are not generally suitable for ingredient use and are unreliable in their contract performance. However, our regular suppliers have good stocks that are historically at good levels.

There is likely to be a carryover into the 2024 season, which may reduce farmers plantings this season as they adjust supply to demand.

Sunflower

Prices have increased in the past two weeks, and we expect this trend to continue now due primarily to the insufficient supply of raw material. Some processors still have low priced stocks that are being offered cheaply to keep facilities running, but these will soon run out. This has partly been caused by a slowdown in shipments to China due to the increased freight rates caused by the Red Sea issues. Neither buyer nor seller is prepared to absorb this premium on trades which are made on tight margins.

As with linseed the EU commissions proposal to impose prohibitive tariffs on oilseeds from Russia and Belarus. This will increase prices as it will restrict the availability of sunflower oil and meal within the EU from these regions thus increasing prices within the EU ultimately supporting EU farmers who are protesting at the cheap prices, below their production costs.

The situation is also dependent on the Ukraine situation, if Russia manages to gain additional areas and it appears the conflict is moving their way, prices could increase very fast.

Poppy

There really is no available poppy now, and we do not see this situation changing until Q4/2024 at the earliest. Most processors are sold out, and availability is extremely tight. Price will continue upwards through 2024.

The situation for low alkaloid varieties is particularly acute.

New crops will be planted now, we hear Spain is hoping for a normal crop size, although it will be weather dependent like last season where the volume was reduced by over 60% due to drought. The Czech Republic is thought to be looking to increase the area planted, but this is unconfirmed and with the EU commissions sanctions on oilseeds imminent it might swing farmers into easier growing high yielding crops.  The autumn sown fields are looking good, however.

Other regions mainly in the Southern Hemisphere had smaller crops this season and will not have significant quantities available for shipment again until 2025. This will not arrive in EU/UK until Spring 2025.

Quinoa

Bolivia is approaching its harvest which despite high temperatures is looking good, and the quality is always the best. Peru also has a crop of 65-75,000mt, having suffered a smaller El Nino effect than expected.  But, as we know, less than 50% of this meets EU requirements.

Peru has built a new deep-water port to facilitate trade with Asian countries where regulations on pesticides are less severe, and therefore suppliers are looking in this direction to develop sales.

New crop prices from Peru, will appear soon, and will discount the Bolivian prices which emerge first.

Chia

Paraguay, the primary origin in recent years, is being challenged by new sources developing the crop now. Peru and Bolivia will both have small crops and are able to compete into Asian markets. South America is at a disadvantage with freight costs and timings to the EU, so the developing regions in Africa have a supply chain advantage, although quantities available are limited.

Currency update

Focus seems to be on the expected interest rate cuts which continue to gradually get pushed back from initial expectations. Currently the EU is hoping to ease rate in June, whereas in the USA the likelihood is getting further delayed with some forecasters thinking Q4 at the earliest.

Otherwise, geopolitical issues continue to dominate and are unpredictable. Certainly, the unsettled situations in Ukraine and Gaza add the potential for volatility, and of course 2024 sees nearly 50% of the global population going to the polls at one time or another. This could deliver huge political shifting depending on the results.

There is increasing concern over the global financial system, not serious at present but something to keep in the back of one’s mind. In the UK the BoE confirmed banks had all got robust enough capital to support businesses and households should economic conditions deteriorate.

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