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Dried Fruit & Nuts 2018
IEG Vu
IEG Vu | Dried Fruit & Nuts 2018 / 3www.ieg-vu.com
IEG Vu
Publishing Director IEG Vu & IEG Policy Adam Sharpe Tel: +44 20 7017 7587 Email: [email protected]
Senior Analyst: Dried Fruit & Nuts/Spices & Exotics Julian Gale Tel: +44 20 7017 7539 Email: [email protected]
Agribusiness Intelligence | Informa UK Ltd. | Christchurch Court | London EC1A 7AZ | UK Telephone: +44 20 7017 7500IEG Vu
Principal Analyst: Beverages Neil Murray Tel: +44 20 7017 7553 Email: [email protected]
Head of Advertising Sales Ben Watkins Tel: +44 20 3377 3911 Email: [email protected]
Advertising Sales Richard Jewels Tel: +44 20 337 73163 Email: [email protected]
Subscription & Marketing Enquiries Email: [email protected]
Agribusiness Intelligence Client Services Team EMEA: +44 20 7017 6242 (9am-5pm BST) APAC: +61 287 056 966 (9am-5pm AEST) NORTH AMERICA and LATAM: +1 21 26 52 53 22 (9am-5pm EDT) Email: [email protected]
www.ieg-vu.com© Informa UK Ltd 2018
News Analyst: Canned Products Estela Cuesta Tel: +44 20 7017 4549 Email: [email protected]
News Analyst: Dried Fruit & Nuts/Spices & Exotics Jose Gutierrez Tel: +44 20 3377 3704 Email: [email protected]
Contents Cracking new world05 Chile looking to boost
raisin exports
08 American Peanut Council, a solid pillar in an unsteady scenario
11 Brazil nuts must open new markets and channels to push up prices
14 Purafruta. Pure fruit, apparently, a simple idea
16 China’s scarcity at the core of the global dried apple industry
18 Chilean walnuts to face oversupply, low prices and trade conflicts
21 Investing in dried plums
These changes heralded a new period for global agricultural commodities and, of course, for the edible nut and dried fruit sector. Trump started commercial conflicts with India, Turkey and China, imposing punitive tariffs on all kind of products and triggering a similar response from these countries, all massive importers of US products such as walnuts, pecans, pistachios, almonds, raisins and prunes.
The industry is experiencing an unsteady scenario, where deep price changes, currency devaluations and subsidies for affected growers are common: none of them healthy trends in the global market.
In addition, Brazil nut and cashew prices experienced a deep fall between 2017 and the end of 2018, revealing a picture with hidden (and interesting) supply information in Bolivia, Brazil and Peru and fragile development policies in West and East African countries, very
dependent on raw cashew nut prices (RCN).
Tanzania saw its president decide to intervene on national crop, acquiring the national production and using the army to collect and stock it. A picture similar to Ivory Coast’s cocoa crisis in the 1980s.
However, emerging growers such as Peru, Australia, South Africa or Chile are taking a long-term view as Indian and Chinese buyers are set to seek alternative origins, open-minded to new proposals. Chile is already co-leading prune exports with the US.
Many international players thought that US trade wars would stop. If not, are we witnessing a transitional period into a new global scenario, painful but, at the same time, fascinating and full of opportunities? This supplement expects it to be a passing phase, leading to a renewed international industry.
News Analyst: Dairy/Tomato/Frozen Jana Sutenko Tel: +44 20 7017 4990 Email: [email protected]
As we wrote previously, 2017 saw deep and unexpected political changes: Brexit and the emergence of Donald Trump, as US president.
By Jose Gutierrez
Hiba-Frutco-ad-remake.indd 1 20/11/2018 11:51:21
www.ieg-vu.com4 / Dried Fruit & Nuts 2018 | IEG Vu
IEG Vu | Dried Fruit & Nuts 2018 / 5
Customs data compiled by Global Trade Tracker reveals that the South American producer exported 22,959 tonnes of dried grapes (raisins) in the first six months of 2018, 4.9% up from the volumes achieved between January-June 2017.
Various trade reports in recent months have warned that the country is already heavily sold so its prices have been firm, albeit not at the lofty levels of other origins, such as the US. International raisin prices, generally, have been high due to global shortages.
Based on Chile’s dwindling stocks, it remains to be seen whether it will end 2018 with overall raisin shipments ahead of those of 2017, when volumes dipped 6.8% to 51,791 tonnes (according to the GTT data). However, Chilean producers are hopeful,
based on various encouraging factors, such as being competitively priced against the US.
In late July, one Chilean producer estimated that Chile probably had 5,000-10,000 tonnes left unsold. He noted that August tends to be a particularly slow month for sales, due to the European holiday season, but the pace usually picks up again from September onwards as importers look to cover for their Christmas season requirements. “So we expect to be fully sold out this year,” he added.
On July 20, Rotterdam trader Catz International observed that Chile was offering its last stocks of Jumbo raisins at slightly discounted prices. “Demand for Jumbo Goldens faded at the current high levels,” the company stated.
Chile’s raisin shipments have declined in each of the last three years (2015-17) but the first six months of 2018 have shown a moderate improvement and the country’s raisin producers are hopeful that this signals a likely boost for the full year.
By Julian Gale
Chile looking to boost raisin exports
In late July, one Chilean producer estimated that Chile probably had 5,000-10,000 tonnes left unsold
6 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
The Chilean producer pointed out that Chilean grape vines are worked throughout the year to obtain premium quality fresh grapes for export. “That is why we have the Jumbo raisins, because whatever grapes are not good enough for export will be made into a raisin afterwards, but you are starting from big grapes,” he noted.
A lot of Chilean raisin producers are changing varieties because exports of Flame raisins and Thompson raisins are declining each year. “Some producers are experimenting with new varieties in order to get earlier and more stable grapes. Those varieties have not been tested yet as to how they are going to work with raisins,” the producer explained.
As a result of this gradual progression there are likely to be more medium size raisins – e.g. Medium Flames – as opposed to Jumbos produced in 2019, he suggested.
Harvesting of Chile’s raisin crop usually
spans from December into April of the following year.
The general consensus is that the 2017/18 crop was normal-sized, so around 70,000 tonnes.
It is very difficult to gauge crop sizes in Chile as there is no official organisation or groups making detailed estimates. A clearer view of the crop size tends to be formed when the end of year exports are known.
The 2017 downturn in Chile’s raisin exports followed a 6% fall in 2015 to 62,045 tonnes; and another of -10.38% in 2016 to 55,605 tonnes.
However, relatively speaking, these downturns in overall shipments are not
massive and Chile is basically maintaining a consistent position in the global market.
The shortages of US raisins over the last few years is well known and it is therefore not surprising to see that the US remains Chile’s top export market. Chile’s raisin shipments to the US in the first five months of this year have risen 56% to 2,619 tonnes.
Chile, along with South Africa and Australia, is a key southern hemisphere producer to benefit from the high prices of Californian and Turkish raisins.
Andrew Ciclitira, managing director of UK company Demos Ciclitira, noted in his IEG Vu column of April 26 2018 that this situation should enable farmers in these southern hemisphere origins to obtain higher prices for their crops. “This may, in turn, encourage larger tonnages in the future and is good news for the European consumer, as it is healthy to have a vibrant marketplace with different
TABLE 1: CHILEAN DRIED GRAPE (RAISIN) ExPORTS 2014-17 (TONNES)
2014 2015 2016 2017
US 5,442 8,194 7,126 6,245
UK 6,283 7,171 5,802 4,781
Peru 5,694 5,354 4,482 4,106
Colombia 5,866 3,411 4,168 3,768
Netherlands 2,763 2,907 3,520 3,298
Mexico 6,141 6,331 3,813 3,170
Taiwan 1,714 2,154 2,497 2,498
Ecuador 1,810 1,714 1,830 2,157
Russia 3,457 2,281 3,667 2,038
China 362 577 1,019 1,869
Spain 1,819 1,416 1,796 1,846
France 1,394 1,449 1,311 1,748
Denmark 1,475 1,613 1,683 1,447
Poland 1,353 1,019 848 1,316
Japan 667 505 543 1,115
Germany 1,142 1,717 1,343 868
Italy 1,133 917 813 792
Turkey 523 774 628 717
Australia 529 632 374 694
Lithuania 648 563 862 648
Others 15,808 11,346 7,480 6,670
Total 66,023 62,045 55,605 51,791
Source: Global Trade Atlas Tracker
TABLE 2: CHILEAN DRIED GRAPE (RAISIN) ExPORTS JANUARy-JUNE 2017-18 (TONNES)
2017 2018
US 2,457 3,181
UK 2,231 2,115
Colombia 1,542 1,634
Netherlands 1,721 1,532
Russia 841 1,508
Peru 898 1,224
Mexico 1,374 887
Ecuador 634 811
Taiwan 1,337 773
Spain 873 753
Japan 604 730
China 448 718
Denmark 733 688
France 888 651
Turkey 384 453
Thailand 247 448
Lithuania 269 408
Iraq 180 400
Poland 402 375
Italy 511 294
Others 3,307 3,376
Total 21,881 22,959
Source: Global Trade Atlas Tracker
Chile is basically maintaining a consistent position in the global market
IEG Vu | Dried Fruit & Nuts 2018 / 7www.ieg-vu.com
origins and types of fruit,” he suggested.
The UK ranks as the second top destination for Chilean raisins with 1,659 tonnes bought between January-May 2018, just 1.8% up from the same period of 2017. Colombia and Russia are next in the 2018 period.
The Chilean producer suggested that Chile’s raisin exports should end higher this year. “We already knew, when we started harvesting in December, that the US crop was coming a little bit short. So, everyone rushed to get more product to try and satisfy expected higher demand from the US. There is also the fact that some markets switch between the US and Chilean crop, depending on which price is better,” he explained.
The Chilean producer recalled that this season the US almost doubled its prices from those of last year, whereas Chilean prices have been a “little more stable”. This contrasts with the 2016/17 season when US prices were more attractive than those of Chile, which suffered a fall in its raisin shipments.
Another factor to watch is the European Commission (EC) regulation on the pesticide iprodione. The EC ban on its use is expected to be back in force by 2019.
“When the first [Chilean] producers open for fresh grapes only decide to work their
orchards for raisins they will forget about pesticide limits or certifications so there is some concern about next year with the possibility about Jumbo raisins to Europe. Not all the raisins are going to be fit for the EU,” the Chilean producer warned.
8 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
A Flavour to SavourThe U.S.peanut industry’s technologyand research in breeding, seeding, cultivation and harvesting combine to deliver the most fl avourful, wholesome peanut.
Commi�ed to Quality The U.S.peanut industry invests heavily in plant modernization and the latestequipment to ensure that all buyersreceive the best possible product.
Stringent Safety PracticesU.S. peanut processors follow stringent food safety practices to ensure that consistency, safety and quality arepresent in every aspect of U.S. peanut production.
A Leader in SustainabilityPeanuts are naturally sustainable.They replenish soil with the essential nitrogen depleted by other crops, resulting in less greenhouse emissions.
peanutsusa.comAmerican Peanut Council (USA o�ce)+1-703-838-9500 / [email protected]
American Peanut Council (Europe o�ce)+44-208263-6254 / [email protected]
To learn more, contact:
peanutsusa.org.ukVisit us
at Gulfood, Dubai17-21 February, 2019U.S.A. Pavilion
Booth S3-A42
C
M
Y
CM
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CMY
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APC_Informa_Ad_2018.pdf 1 05/11/2018 15:41:13
Superior taste, quality, safety and sustainability. You've got to hand it to us.
The American Peanut Council (APC) is witnessing a complicated end to the year. The US industry must compete in several fields, after having enjoyed an optimistic playground for US origin in the first half of the year. This was due to a combination of unfavourable weather, aflatoxins and pests that caused crop falls in China, Argentina, India and Sudan. In addition, the US company has successfully launched peanut milk, following the increasing popularity of plant-based milks.
The second half of the year saw the trade war with China and hurricanes Florence and Michael’s devastation in US southern states, where peanut is a pillar of their grocery industry.
USDA downgraded its 2018 estimate to 5.4 million pounds on November 8, 5% less than in its October forecast and down 23% from the 2017 production.
China was the largest US peanut importer in recent years, accounting for 57.8% and 34.4% of the total volume in 2016 and 2017, respectively. Exports to China were 20,888 tonnes from January-September 2018, accounting for 20.5% of the total and 7.3 points less than in the same period in the previous year, according to GTT data.
“The size of the Chinese crop greatly determines the level of required imports in any given year. The crop size and prices in
IEG Vu has had the chance to talk to the president of the American Peanut Council (APC) and the vice president and European marketing manager, Louise McKerchar, about the 2018 season.
By Jose Gutierrez
American Peanut Council, a solid pillar in an unsteady scenario
The US industry must compete in several fields, after having enjoyed an optimistic playground for US origin in the first half of the year
SPONSORED
A Flavour to SavourThe U.S. peanut industry’s technology and research in breeding, seeding, cultivation and harvesting combine to deliver the most fl avourful, wholesome peanut.
Commi�ed to Quality The U.S. peanut industry invests heavily in plant modernization and the latest equipment to ensure that all buyers receive the best possible product.
Stringent Safety PracticesU.S. peanut processors follow stringent food safety practices to ensure that consistency, safety and quality are present in every aspect of U.S. peanut production.
A Leader in SustainabilityPeanuts are naturally sustainable. They replenish soil with the essential nitrogen depleted by other crops, resulting in less greenhouse emissions.
peanutsusa.comAmerican Peanut Council (USA o�ce)+1-703-838-9500 / [email protected]
American Peanut Council (Europe o�ce)+44-208263-6254 / [email protected]
To learn more, contact:
peanutsusa.org.ukVisit us
at Gulfood, Dubai17-21 February, 2019U.S.A. Pavilion
Booth S3-A42
C
M
Y
CM
MY
CY
CMY
K
APC_Informa_Ad_2018.pdf 1 05/11/2018 15:41:13
Superior taste, quality, safety and sustainability. You've got to hand it to us.
10 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
exporting countries such as the US and India also factor into the amount that might be exported to China. While the retaliatory tariffs imposed by China on US peanuts and peanut products are unfortunate and may have some impact on trade, we do not see them as being the biggest factor in Chinese imports,” the president of the American Peanut Council, Patrick Archer, told IEG Vu.
US domestic consumption is an alternative in an unsteady international market, especially for added value products. Peanuts are an excellent nutritional and vitamin source with a reduced price compared with other edible nuts such as almonds, pistachios, walnuts and cashews, and are a global grocery product for snacks or processed products such as oil, flour and butter. Favourable factors to increase sales include the current healthy food trend in developed markets. However, peanuts seem to need a qualitative jump to play in this playing field and the US industry is being very active in promoting its consumption to the Millennial generation.
Social media campaigns are a key tool to reverse this situation. “The APC is active on three social media platforms: Facebook, Twitter and Instagram. We are not a consumer-oriented organisation and our social media output is directed at our members and the worldwide peanut industry. However, some of our international marketing activities are using social media platforms to promote peanut nutrition and recipe ideas,” Archer added.
The second element is the marketing campaigns. “Most of the US industry’s campaigns have been focused on the US market, particularly on Millennials to educate them on the healthy profile of peanuts. Peanuts often have more healthy compounds (protein, magnesium and resveratrol), than much higher priced tree nuts. Meanwhile, in Europe and the UK we work with brands identifying the US origin of their products on packaging to support their marketing efforts, although these have not focussed on Millennial consumers yet,” Louise McKerchar explained.
A third element is the launch of innovative products. 2018 has seen the launch of peanut milk in the US, created by the US company Elmhurst. “The new peanut milk product has been well received by consumers, especially the chocolate version. Further product extensions are expected in stores soon. As far as we know, the company has no plans to export to Europe at this time,” McKerchar added.
Scientific researchA key point is scientific research, based on the Peanut Foundation, the APC’s research arm. The Foundation focuses on production and processing research. “This international project delivered high-quality genomic tools to support marker-assisted selection (MAS) which is already being used to incorporate desirable traits into new peanut cultivar releases. This technology does not use any form of genetic modification and
Favourable factors to increase sales include the current healthy food trend in developed markets
relies upon traits in the peanut plant, both wild and cultivated species, to develop new improved seed varieties,” McKerchar noted.
2018 has seen the launch of peanut milk in the US, created by the US company Elmhurst
The APC is currently shaping up plans and topics for the 2020 International Peanut Forum which will be held in Budapest, Hungary from April 22-24. This biennial event is a key forum for anyone involved in the peanut industry. Attendees include farmers, shellers, dealers, brokers, product manufacturers and equipment & service providers from around the globe.
Anyone interested in finding out more about the event should contact Louise McKerchar, [email protected].
IEG Vu | Dried Fruit & Nuts 2018 / 11www.ieg-vu.com
The Brazil nut industry has experienced a sharp price fall in six months, showing its main weakness: the Brazil nut tree yield is totally dependent on the rain cycles in the Amazonian rainforests.
Some collectors have provided false information about the 2018 yield, in an attempt to maintain 2017’s high prices, but from March onwards players knew that the crop was above average and not 20% below average. Jose Gutierrez of IEG Vu talked at SIAL 2018 to Juan Pablo Castedo, founder of CCBOL, veteran Bolivian dealer and a pioneer in opening new markets for Brazil nuts in the Far East.
JG: The south-western Amazon region experienced an unusually dry season in
2017, leading to product scarcity and pushing up prices. Has the industry experienced a similar trend before?
JPC: No, not really. Bolivian processors were pioneers in exporting Brazil nuts. We started to export 50 years ago, overtaking Peru and Brazil and becoming the main international supplier. The Brazil nut tree is always producing whatever the rainfall. Only the yield and quality of the in-shell product change. From my point of view, collectors in the rain forest have played a game of chicken in 2018 and traders have discovered it. The crop was not 20% less than average: it was 20% more at least and the prices fell to around USD3.0-3.3 per pound, down from USD5.5/lb in February 2018. The 2017-18 Brazil nut stocks must
By Jose Gutierrez
Brazil nuts must open new markets and channels to push up prices
The Brazil nut tree is always producing whatever the rainfall. Only the yield and quality of the in-shell product change
12 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
be sold before the new harvest in December because they may lose their organoleptic properties due to humidity. European traders know this and are awaiting their opportunity to acquire nuts at a lower price.
JG: Brazil nut is a key product for isolated communities in Amazonian regions. How can one secure a stable price which covers collection and logistics costs?
JPC: When Bolivian processors started to work in the international market, they were focused on the US and the EU, positioning the product as a cheap complement to edible nut mixes.
The second generation of processors felt comfortable with that marketing strategy because they were quite successful against other origins such as Peru and Brazil. However, the situation has completely changed. Peru’s government and exporters are working together and are quite successful in opening new markets, combining free trade agreements with promotion policies.
Bolivia is still the main origin, but we are behind them, taking advantage of their work and some of us are trying to open new markets to diversify export destinations and cut the US and the EU market share. South Korea is a wonderful example.
Peru managed to sell Brazil nuts as a premium product there and South Korean importers are not only selling it in mono-product packages but also re-exporting to Japan and China. However, Peru does not produce enough to cover this new demand and some brokers are betting on going there to cover the gap. As a result, South Korea has tempered the lack of European and US demand until February, and prices have remained high.
New successful business cases? From my point of view, Japan for quality shelled product and China for in-shell. What is the main issue? Bolivia has no free trade agreements with these countries. Even so, many importers are willing to pay the
Peru does not produce enough to cover this new demand
Brazil Nut Exports: Main Importers 2015-Aug 2018 (1,000 USD)
500K
450K
400K
350K
300K
250K
200K
150K
100K
50K
02015 2016 2017 Jan-Aug 2017 Jan-Aug 2018
197,564
77,030
77,030
59,307
40,853
76,006
70,154
56,940
59,543
33,116
77,112
63,842
42,230
52,525
51,177
31,947
49,032
41,618
32,269
37,552
70,867
40,932
78,309
27,90826,030
Others US South Korea UK Germany Netherlands France Italy
Australia
Source: GTT
Brazil nut exports: main importers 2015-Aug 2108 (1,000 USD)
Juan Pablo Castedo, founder of CCBOL, at SIAL 2018
IEG Vu | Dried Fruit & Nuts 2018 / 13www.ieg-vu.com
tariff difference, which is around 25% in South Korea (Peru’s tariff is 5% against 30% for Bolivia). Processors and brokers are going to take the first step but the Bolivian government must try to sign new FTAs with Far Eastern countries.
JG: And Europe and the US…?
JPC: The US and EU are going to be important for a long time, if only to diversify importers. The US is going to be the key conventional market and we cannot change that in the short term. On the other hand, my European bet is the organic channel where the price difference is around 50-60 US cents/lb against conventional. There are organically certified Bolivian processors already, after previous long-term work in the conventional channel, and our competitors have not yet started to do this.
JG: Is the Bolivian industry thinking of new products based on Brazil nuts, such as milk or oil?
JPC: Not yet, because the priority is diversifying markets. If we achieve it, I am sure that importers will start to ask this in the mid-term.
JG: The 2019-20 harvest will start in December. Is there any forecast for the next crop?
JPC: Collectors have no information yet, but, I think the crop will be like 2018-19’s because we have enjoyed good rainfall. My plan is based on increasing sales in South Korea and Japan, not really waiting for checking if the yield is good or not.
Brazil Nut Price: Bolivian Medium, exw UK (USD/lb)
3
4
5
6
7
8
9
29/1
0/20
18
15/1
0/20
18
01/1
0/20
18
17/0
9/20
18
03/0
9/20
18
20/0
8/20
18
06/0
8/20
18
23/0
7/20
18
09/0
7/20
18
25/0
6/20
18
11/0
6/20
18
28/0
5/20
18
14/0
5/20
18
30/0
4/20
18
16/0
4/20
18
02/0
4/20
18
19/0
3/20
18
05/0
3/20
18
19/0
2/20
18
05/0
2/20
18
22/0
1/20
18
08/0
1/20
18
25/1
2/20
17
11/1
2/20
17
27/1
1/20
17
13/1
1/20
17
30/1
0/20
17
16/1
0/20
17
02/1
0/20
17
Source: IEG Vu
Brazil nut price: Bolivian medium, exw UK (USD/lb)
14 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
JG: How was Purafruta born?
UK: Fruit Group AG is a Swiss company specialist in fruit purées. One of its managers was travelling around Colombia to analyse products and contract fruit suppliers in 2016. He found dried fruit bars with no added elements such as sugar or artificial flavours in some stores, and they had a wonderful fresh fruit flavour.
He decided to research more about them and visited Prime Food, the manufacturer. Prime Food is a Colombian company that works with small farmers, having developed its own drying technique to make the product.
Fruit Group AG’s top managers were eager to partner with Prime Food and negotiated to sell the product worldwide. Fruit Group AG created the Hibas trademark in 2017 to market the snack bars online and launched the product at the Anuga Food Fair (Cologne, Germany) in 2017.
Hiba is an indigenous word from Colombian tribes, connected with spirituality and the
cycle of life. Fruit Group has developed a business model where the Colombian partner secures reasonable earnings to fruit suppliers and fair wages to workers at the processing plant and the warehouse, employing currently over 200 local women. We guarantee the fruit and process quality, not requesting organic certificates because they may become very expensive for the Colombian processor and the supplying small scale farmers
JG: Can you describe the product?
UK: They are 30-gram bars, not 100% regular because they are hand-made, free of any additive and containing no added sugar. They are gluten free, vegan and kosher, ISO-certified and have a shelf life of 12 months. Fruits are peeled by hand,
By Jose Gutierrez
We have agreed a deal with the retailer Rossman, which is selling the product in 350 German stores
SPONSORED
Purafruta. Pure fruit, apparently, a simple ideaThe Swiss company Fruit Group AG is selling Purafruta, dried fruit bars, in Europe. Apparently, a simple idea. However, it is a food concept which combines social responsibility, healthy grocery and a delicious and natural flavour, having received several awards. Jose Gutierrez of IEG Vu talked to Ulrike Köpf, sales manager of Hiba, about this project.
IEG Vu | Dried Fruit & Nuts 2018 / 15www.ieg-vu.com
slowly dried and then, after a gentle pressing process, cut by hand from the strand. The packaging shows images of cave paintings which represent fruits and leaves. This is a pure Columbian fruit taste for the world
JG: How many flavours do you have?
UK: We already have 100% pineapple, 100% baby bananas and 100% mango and a mix of these three fruits and golden berries (25% each one). In addition, in December we are going to launch a mix of pineapple (70%) and coconut (30%) and a mix of pineapple (99%) and cocoa nibs (1%).
JG: What kind of consumers are you targeting?
UK: Purafruta can be classified as an ‘on the go’ snack, ideal for travellers, children, sportsmen and people who work outdoors. It is also ‘conscious nutrition’ for vegan, vegetarians and people who want or must follow fat-free and low-salt diets. Finally, it is perfect for allergy sufferers (histamine, lactose and gluten intolerance, sulphide incompatibility and nut allergy).
JG: Where are you selling the product?
UK: We are currently focused on Switzerland and Germany. We are choosing their point of sales very carefully because they must receptive to the message of social responsibility and not to be focused on a competitive price.
We have agreed a deal with the retailer Rossman, which is selling the product in 350 German stores and in the Swiss golf specialist Golfers Paradise. Currently, we are negotiating with important online retailers and a coffee bar chain. These negotiations are very well advanced, but we do not want to reveal their names yet. Our proposal analyses all the aspects, not only prices, having designed a display box which reflects the project values.
JG: Have you tested the general acceptance of Purafruta?
UK: We have ascertained that It is very attractive to children and young consumers. Mothers are our best prospect because they understand perfectly its health properties when they read its composition: 100% pure fruit.
In addition, the European grocery industry players granted it two awards in the ’Free from food Awards 2018, Germany‘, which was presented at The Allergy & Free From Show in London, held in July 2018. A
16-member jury selected our fruit mix of pineapple and baby banana in the ’Food on the go‘ category, plus an additional second place for the Purafruta 100% pineapple fruit bar.
It was a wonderful moment for us after being in the market for less than a year.
JG: What plans do you have for the future?
UK: We want to establish long-term work relationships with clients interested in sharing our work philosophy. We want to move step by step and jump into the US market. Why? Because many US manufacturers and retailers have been pioneers in developing products and services which combine social responsibility and natural ingredients and we are sure we may find customers who want to partner in this wonderful project.
Fruits are peeled by hand, slowly dried and then, after a gentle pressing process, cut by hand from the strand
16 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
April frosts in China and their effects on the crop and the processing plants have highlighted the dependency of the agricultural sector on weather. After a successful 2017 season, the Chinese apple sector had to face severe frosts, temperatures ranging from -9 to -20oC in the provinces of Shaanxi and Gansu from 4-7 April 2018. These frosts lead to a crop cut which affected all apple sectors: fresh, juice, purée and drying.
The Chinese apple harvest was completed in September, but the first alarm bells started to ring in August, when the first new crop offers on dehydrated apple from China should have been emerging. The
marketplace was empty, both in China and in the buying markets, making shippers cautious about opening the new season offers.
“The market in Europe is very tight and we foresee some firmer pricing both on the spot as well as for the opening prices from China,” Catz warned in a market report in September.
China’s 2018 apple harvest was officially reckoned at 32.06 million tonnes, a 28% cut from 44.5 mln tonnes last year, according to a presentation made at the China Juice conference in Xi’an on September 19. But international players
April frosts in China and its restriction on dried fruit production have boosted Chinese dried apple prices, affecting other origins.
By Jose Gutierrez
China’s scarcity at the core of the global dried apple industry
Alarm bells started to ring in August, when the first new crop offers on dehydrated apple from China should have been emerging
IEG Vu | Dried Fruit & Nuts 2018 / 17www.ieg-vu.com
mentioned a lower figure. “The general consensus is that about 40% of the crop has been damaged and that is having a knock-on effect with prices, which are moving up for first new crop shipments to leave China in the next few weeks,” Adam Johnston of UK trader Freeworld Trading told IEG Vu.
A second factor impacted on the availability of dried product: the environmental rules of the Chinese government forcing factories to update their machinery. Many of them have since closed
“There are a lot of measures from the government to minimise the pollution. All kinds of environmental issues have been raised, meaning that many factories are forbidden to produce. A lot of factories are obliged to invest in all kinds of monitoring systems or simply forced to cease production. This means, obviously, that the ones who are able to produce have a virtual monopoly. Less competition makes prices higher,” Joost Penning, manager of the dried fruit and nut department at Rotterdam trader Catz International, told IEG Vu.
In addition, the Chinese industry had to raise wages due to labour shortages, affecting production costs, and exporters had to contend with the new punitive US tariffs.
“Moreover we will, for sure, see quite a number of defaults and renegotiations, as usual in China when markets are tight,” Penning added.
First shipments were available from November onwards, suffering general delays because factories permitted to process were completely booked.
Several traders told IEG Vu that Chinese prices ranged from USD3,700-4,200 per tonne c&f in October, compared with USD3,100-3,300/tonne in October 2017. This sharp rise seems to herald an upward trend due to strong demand and tight supply in Europe, where no processor expected this window of opportunity to raise its market share on fresh apple against juice and purée processors.
Traditionally, China was the cheapest origin. South American and European dried apple processors played in a segment of the international market where buyers paid more for better quality. But, the short Chinese crop has changed the rules of the game and Polish, Italian or Chilean prices seem more attractive and they can increase their sales volumes despite keeping prices firm.
Chilean productThere are four international dried apple processors in Chile, and most of the crop is focused on fresh, purée and juice sectors. Traditionally, Chilean dried apple processors have to pay high prices to growers, making a high-quality product because competing with low prices in the international market is not a viable option.
“We don’t compete with Chinese origin, as quality, traceability and certifications are higher and more reliable in Chile. We normally compete with European origins, and especially in the Granny Smith apples.” Joyce Abraham, manager of Chilean processor Surfrut told IEG Vu.
“Chilean dried apple processors must face tough competition with juice manufacturers to obtain fresh supply, and have high production costs,” Abrahams added. “Chilean dried apple prices have ranged from USD5.0-6.0 per kilo fob, very far from Chinese prices. Chile closed the drying season in October, having signed its export contracts in March, May and June. As a result, the current price trend is not affecting us.”.
“However, if next season the juice processors and fresh exporters decide to pay more to growers we are going to face serious difficulty in covering our costs. It is soon to have a clear outlook of 2019. We should wait for the 2019 Chilean harvest (February-March) to have a clear picture of the 2019 prices,” Joyce Abrahams concluded.
Italy’s main variety is the Morgenduft, which averages EUR9.0-10.0 (USD10.20-11.33) per kilo. However, as the price range would suggest, this does not feature as a competitive product to Chinese or Chilean dried apples on the export market.
Time for patience and waiting for better prices seems over. With the end of the year around the corner, dried fruit buyers cannot wait longer to achieve lower prices.
And, finally, a general recommendation from all our sources: “Cover!”
Chilean dried apple processors must face tough competition with juice manufacturers to obtain fresh supply, and have high production costs
The general consensus is that about 40% of the crop has been damaged
Phot
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18 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
Its 2010 harvest totalled 32,933 tonnes of in-shelled product from 25,400 hectares, reaching 121,446 tonnes from 45,600 hectares in 2018 and doubling its yield to 2.66 tonnes/ha. As a result, Chile’s crop is expected to reach 150,000 tonnes in the 2018/19 season, overtaking Ukraine as the third largest grower after China and the US.
Chile enjoyed record exports of 103,398 tonnes in 2017, 44.5% more than in 2016, and almost doubled its revenue to USD460.9 mln, according to customs data, taking advantage of high prices in California, the largest world’s exporter, which peaked in November this year, IEG Vu has noted.
The 2018 season has reversed this situation, after Californian growers and processors decided to sell all their stocks
before Chile’s harvest from April onwards. Sources in the Chilean industry noted that the fob price fell to USD2.7 per kilo in June, after reaching USD3.2/kg in February. In addition, the country must face global trade conflicts, after working confidently to develop free trade agreements with several key importers such as the EU, South Korea, India, China or Japan, although India, one of its most promising markets, increased its tariffs to 100% from a previous level of 30% in June.
This sudden change to the rules of the game dealt a strong blow to Chilean prospects, jeopardising its expectations of exporting 15,000 tonnes of in-shell product to India in 2018. India’s annual consumption of walnuts is 50,000 tonnes, most consumed during the festival season from July-September.
Chile has played well on the agricultural world stage and is a key global exporter of processed products in many sectors. Now it is the turn of its walnut production.
By Jose Gutierrez
Chilean walnuts to face over-supply, low prices and trade conflicts
Sources in the Chilean industry noted that the fob price fell to USD2.7 per kilo in June, after reaching USD3.2/kg in February
20 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
Many contracts were committed before May and Chilean exporters do not have a long time to make changes in the destinations of a large amount of walnuts.
In addition, the Turkish lira depreciated by around 80% against the US dollar from January-August, after the start of a trade conflict with the US. Turkey is the largest world’s walnut importer, Chile selling 33.8% of its exported volume there.
The US 2018/19 crop is expected to reach 690,000 (short) tons, up 10.7% from the previous season, according to the International Nut and dried fruit Council (INC), and the eastern European crop estimate is going to be updated due to excellent weather conditions before the start of harvesting, adding pressure to lower prices in the following months.
Chile’s growth will remain strong, and the crop is expected to reach 150,000 tonnes in-shell, 20% more than in the previous season.
“A lot of forward offers can be found, as sellers are aware of the record world production and prefer to have some first safety in the books,” the Dutch broker Global Trading & Agency noted in its July 27 market report.
As a result, the Chilean industry will face an extremely hard scenario which combines oversupply, low prices and trade conflicts in an interconnected global market. However, the South American country has been able to sail skilfully, taking advantage of the acquired successful experience in other products such as dried vine fruit, dried plums or berries.
Chilean Walnut Exports, 2013 - July 2018
2013 2014 2015 2016 2017 Jan-July 2017 Jan-July 2018
42,5
95
247,
624
48,4
23
320,
378
70,1
18
357,
203
71,5
34
242,
369
103,
398
460,
892
49,8
96
201,
886
44,6
80
177,
770
Tonnes USD Thousands
Chilean Walnut Exports, Main Importers 2017 (103,398 tonnes)
Turkey 33.8%
Italy 11.4%
Germany 9.9%
UAE 8.9%
India 6.0%
Brazil 4.7%
Spain 4.2%
Morocco 3.1%
France 2.5%The Netherlands 2.1%
Others 13.5%
Source: ODEPA/GTT
Chilean walnut exports, 2013- July 18
Chilean Walnut Crop, 2010-18
2010 2011 2012 2013 2014 2015 2016 2017 2018
25,0
54 32,9
33
27,8
75 37,1
49
30,4
75 46,0
00
33,1
66 45,0
00
36,1
36 49,0
00
39,2
21
71,5
00
41,6
88
72,0
00
43,6
62
106,
747
45,6
00
121,
446
Hectares Tonnes
Source: ChileNut
Chilean walnut crop, 2010-18
Chilean walnut exports, main importers 2017 (103,398 tonnes)
Chilean Walnut Exports, 2013 - July 2018
2013 2014 2015 2016 2017 Jan-July 2017 Jan-July 2018
42,5
95
247,
624
48,4
23
320,
378
70,1
18
357,
203
71,5
34
242,
369
103,
398
460,
892
49,8
96
201,
886
44,6
80
177,
770
Tonnes USD Thousands
Chilean Walnut Exports, Main Importers 2017 (103,398 tonnes)
Turkey 33.8%
Italy 11.4%
Germany 9.9%
UAE 8.9%
India 6.0%
Brazil 4.7%
Spain 4.2%
Morocco 3.1%
France 2.5%The Netherlands 2.1%
Others 13.5%
Source: ODEPA/GTT
Chilean Walnut Exports, 2013 - July 2018
2013 2014 2015 2016 2017 Jan-July 2017 Jan-July 2018
42,5
95
247,
624
48,4
23
320,
378
70,1
18
357,
203
71,5
34
242,
369
103,
398
460,
892
49,8
96
201,
886
44,6
80
177,
770
Tonnes USD Thousands
Chilean Walnut Exports, Main Importers 2017 (103,398 tonnes)
Turkey 33.8%
Italy 11.4%
Germany 9.9%
UAE 8.9%
India 6.0%
Brazil 4.7%
Spain 4.2%
Morocco 3.1%
France 2.5%The Netherlands 2.1%
Others 13.5%
Source: ODEPA/GTT
IEG Vu | Dried Fruit & Nuts 2018 / 21www.ieg-vu.com
Goodvalley started in Chile’s Colchagua Valley (the heart of the country’s wine industry) in 2009, when some local plum farmers banded together to process their own fruit in newly constructed gas fired ovens.
Sun dried production is shrinking these days. It may be a more economical and energy-efficient means of drying fruit, but tunnel drying gives a more consistent product, and is obviously much more hygienic.
In 2013, the plant was upgraded again with new pitting and tenderising machinery. Now, construction is nearly completed of a new warehouse on the Goodvalley site. This will handle incoming fruit, and its large capacity means that Goodvalley will be able to process from stock, instead of being reliant on perhaps erratic deliveries from farmers. It will
ensure a smooth flow of raw material into the processing plant.
In one season (harvesting runs through February and March) the company can presently process 4,000 tonnes of pitted prunes: the new warehouse will raise that to 7,000 tonnes. Unpitted prunes are also available, for customers who desire this type. Sizing takes place between April and September and packing runs from April through to December, giving a month for preparation for the next season’s fruit.
Chile is a global player in the dried plum (prune) market, and one of the country’s key processors is expanding its production capacity.
By Neil Murray
Investing in dried plums
Sun dried production is shrinking these days. It may be a more economical and energy-efficient means of drying fruit, but tunnel drying gives a more consistent product, and is obviously much more hygienic
22 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu 22 www.ieg-vu.com/ Dried Fruit & Nuts 2018 | IEG Vu
Goodvalley also dries raisins in its plant, but the volumes (packed in 10kg boxes) are smaller: some 300 tonnes annually of Goldens and 200 tonnes of dark.
Bruno Ceroni, Goodvalley’s sales and marketing manager, is under no illusions about what makes Chilean dried plums attractive to buyers. “For sure, it is the quality (oven dried fruit) and the service and the reliability of supply,” he told IEG Vu
Goodvalley is expanding its dried fruit portfolio beyond plums and raisins. “We want to diversify into new kinds of dried fruit like cherries, blueberries and apples to give a complete full table of dried fruit to our partners,” says Ceroni. “With the increase in volume we need also to diversify our markets. We are trying to enter new markets like Japan and Taiwan or niche markets like Austria, Belgium, and Switzerland.
And walnut production (Goodvalley is also active in this sector)?
“Walnuts, of course, are the success story of Chile right now. Yes, the walnut business has been very successful in the last 10 years but now the market has crashed and only the best growers will survive the new market conditions.”
We want to diversify into new kinds of dried fruit like cherries, blueberries and apples
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