Ingredients Market Report: February 2025
General news
Global trade has been quiet through January, perhaps partly due to the anticipated changes to be implemented by the Trump administration. The threat of tariffs on imports into USA threatens to disrupt global supply chains as alternate regions become more competitive or originating countries seek alternative markets. The imposition of tariffs on Mexico and Canada of 25% from 1st February means suddenly these countries will look elsewhere in the global market place to sell their produce, whilst doors will open into the USA for regions without tariffs. Â So, all change.
Currency patterns have flexed in January too with the EU, Canada amongst economies cutting rates whilst USA, UK keep them on hold. But warnings of weak EU economies similar in UK and China are a growing concern. This is causing freight rates to dip as demand for goods declines.
Chinese New Year and the Maha Kumbh festival in India has meant roughly 40% of the world population has been distracted for the last 10 days of January into February too.
As we said in January, 2025 is a year of change and uncertainty. Let’s hope we can avoid major trade wars.
Pumpkinseed kernels
2024 saw a record year of exports from China with significant growth in demand from Arab countries as well as the USA. EU/UK consumption was also up. We would expect this trend to continue as shine skin prices are very attractive this season, but this will negatively impact on areas to be planted in 2025, so we would expect firmness to return to the market for supplies in 2026.
The GWS price is converting more and more end users to shine skin too, along with the risk of pesticide contamination.
Linseed
Slow demand and fluctuating foreign exchange have presented some buying opportunities. EU buyers bought large quantities of Russian flaxseed in December to avoid the increase in tariff from 1st January. We would expect the same pattern to repeat as we approach the next hike in duty. The recent imposition of 25% duty by USA on Canadian markets opens the opportunity for other origin material to enter the USA competitively and will push Canada to look elsewhere: China? EU?
Yellow linseed quality and colour is disappointing this season due to the late harvest, and supplies are tight of premium material pushing prices ever higher.
Sesame seed
Whilst demand has been good in recent weeks from China, Vietnam and Korea, it continues to be lack lustre from EU/USA regions. This has led to a flat market for exporters of hulled seed. India is gradually regaining its market share as quality, consistency and reliability of supply outperform other regions for hulled seed.
The weak demand will impact on planting for the Kharif crop in India which harvests in April and is becoming the more significant crop as growing patterns are impacted by climate change.
Harvesting in Brazil will start now, and the rapid increase in the volume of natural sesame has put downward pressure in the global market. As before we expect the majority of this seed to go to BRICS countries, in particular China, India and Russia. But it will obviously impact global markets.
The 25% tariff on Mexico by the USA, might open opportunities for other origins to increase supply of hulled sesame here. We shall see. Of course, if the tariff increase is rolled out globally, we are back to status quo in the USA.
Hulled Millet
As we advised the EU duty free quota on Ukrainian millet is already 50% utilised since 1st January with less than 4000mt remaining across all items. Once exhausted prices will rebound for all origins, EU or otherwise. Non-EU sources such as China remain uncompetitive.
Sunflower
Cash flow challenges dominate this market. The processors who remain open have expensive purchases and cheap sales to try and marry up. The market is quiet but expectant of further issues as we approach quarter two of 2025 and raw material availability tightens further. We see a deteriorating situation through until new crop shipments which will be September at the earliest from origin with an expected rush for orders as buyers wait for anticipated new crop reduced prices. We would strongly recommend cover is taken through to at least end November delivery now.
Poppy
Steady pricing these days from all origins, as supply and demand appear to be in balance. Issues around alkaloid level requirements and interpretation continue to raise concern, but we do not anticipate significant price adjustment this season now.
Quinoa
Another quiet market partly due to a lack of available EU grade material, so USA options are more attractive to processors. We should start to see crop estimates from Bolivia in February with Peru later due to the late planting here this season.
But for now we see prices staying firm.
Organic material is very short, and prices will likely climb.
Chia
Farmers are holding stocks as they see prices climb in the local markets in Paraguay. Eventually they will need to sell to finance the new season, but for now it adds firmness until at least the new crop.
USA demand is expected to increase soon. Other origins will have new harvests due before South America as usual filling the supply gap with both India and Africa contributing here.
Currency update
FX Monthly movement:  US$/ £ 1.24  |  US$/ € 1.04  |  £/€ 1.19
