Turkish Dried Fruits

Tomatoes: China to face a record low crop

The 2018 crop output has now been seriously revised down to less than 34,5 Millions MT. of fresh tomatoes ! This is almost 2 Millions MT. lower than pre-crop estimates and up to 3 Millions MT. below the 2017 volume.

China is indeed experiencing a bad crop with low yields and a short harvesting period; Inner Mongolia is expected to stop very early September when Xinjiang should finish as early as by Sept. 10. The Chinese output is now expected around 450 000 MT. of tomato paste 36%, likely a record low level in 13 years ! Thanks to current inventories, local sellers should be able to cover export markets requirements till beginning of 2019 without any problem but it is now questionable whether we may face a shortage before the next crop becomes available.

In Europe, Italy, Spain, Portugal, Greece and France have revised their expected volume down, respectively at 4.8 Millions (- 8.6 % from 2017), 2.6 Millions (- 18 %), 1.1 Million (- 29 %), 350 000 MT. (- 12 %) and 150 000 MT. (- 19%) ! The total European crop is now estimated at 9.1 Millions MT. of fresh fruits, 1,6 Millions lower than in 2017 (- 15 %). As a reminder, this is equal to more than 250 000 MT. of paste 28/30 % !

In the rest of the world, Turkey is facing an extremely bad crop, now forecast at 1.35 Millions MT. (also – 29 % from 2017); so did Brazil at 1.35 Millions (- 9 %). Still, some countries are experiencing good crops : Iran production forecast at 1.45 Millions MT. (still far away from its record level), Ukraine at 0.7 Millions (provided a good harvest in September) and, more important from a global standpoint, California where the field yields are back to high level. However, the volume of export oriented Cold Break paste is limited according to local sources.

The direct consequences of this short crop is a sudden increase in Chinese origin prices. Current offers are around 75 US $ / MT. higher than they were a year ago at 800 – 825 US $ / MT. FOB for crop to crop contracts for high quality aseptic 36/38 %. We strongly expect these prices to keep on increasing in comings months ! In Europe, 2018 crop contracts have been made at price levels close to those of 2017 for semi concentrated and diced tomatoes but sellers have managed a 3 to 5 % increase for tomato paste.
We also expect a further price increase for European paste in coming months; this trend could be even stronger when buyers turn to Europe once Chinese supply gets tight.

Next report around Sept. 15/20 after our visit to China.

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