China’s 2018 Tomato Paste production not to reach 450.000mt
According to latest information from our local sources, the Chinese output will not reach 450.000 MT. of paste, its lowest level in 6 years or more.
The top 3 processors are :
COFCO – 10 factories running In Xinjiang and Inner Mongolia / 8 factories shut down – with about 180 000 MT., Ex-HAOHAN group – 2 factories in Xinjiang – with about 42 000 MT. and
GUANNONG – 2 factories in Xinjiang – with 29 000 MT.
The next 6 largest processors (TIANSHAN, DONG GANG, HUIZE, HONGXIANG, FUYUAN and THAISUN) have all production between 10.000 and 15.000 MT. of tomato paste.
CHALKIS, which ran one only one factory – 12 others shut down – dropped to number 10 with less than 10 000 MT.
80 to 90 % of the production is 36/38 % CB. When adding the 2017 carryover stocks still to be shipped, around 200 000 MT. in the exclusive hands of COFCO and CHALKIS, we come up with a total available volume of 650 000 MT.
We unfortunately miss updated export figures; 2017 exports reached 850 000 MT. and the first trimester of 2018 shipments reached 200 000 MT., equivalent to about 800 000 MT. on an annual basis.
Exports to Russia, Africa, Europe and even Middle East have indeed dropped significantly in recent years. Nevertheless, we should clearly head to a high supply / demand situation in a few months, not to mention that buyers sourcing exclusively 2018 crop will have more pressure to find Chinese paste. We therefore expect prices to keep on rising in the future after increasing by about 10 % from last crop, same period with a reduction on payment terms acceptation too.