Emergency Update - 20 March, 2020
Edible Solutions normally issue one market and stock update report to customers every month. The report for March was issued on 12/03/2020 and is available on our website and other social media pages. It is also reproduced below after this Update.
However, in view of the current global Covid 19 Pandemic and recent guidance issued by UK government we are issuing this Emergency Update. We are attaching our Company Policy with regard to Covid 19 and would like to assure our customers that your health and safety and the health and safety of our staff are of immense importance to us.
We are aware that at the retail level, to which we do not cater directly, shortages of food and stock out is being reported on a daily basis for the past few days. Edible Solutions, on their part, will keep their delivery chain open as much as possible. However, our services are dependent on third party facilitators such as warehouses, freight forwarders, transporters and suppliers.
We have also seen a significant weakening of the Pound against the US Dollar and the Euro – two currency which we use to buy our goods. With the frequent fall in the value of the Pound we are having to revise our Price List for the second time this month. The revised Price List is attached.
In view of the current situation, we would earnestly advise our customers to note that all our offers are strictly subject to final confirmation.
Market Report and Stock Update
Markets globally are having to contend with a number of imponderables. Covid-19 or the Corona virus is first among them. This has resulted in certain markets being under lockdown, severe restrictions on movement of people, social isolation and unprecedented strain on medical services. This has subdued demand as a whole.
Then there is the fuel wars which have commenced between Saudi Arabia, Russia and USA. This has brought fuel prices down sharply. This should, eventually, filter down to lower freight rates especially as demand falters.
The third imponderable, which is UK/Europe specific, is the ongoing trade talks for a post Brexit environment. Given the posturing from both sides, it is not clear as to what changes will come about in the current way of doing business between these.
As a result, global markets are in jitters. One silver lining, again from a UK perspective, the recent expansionary budget announced by the UK Chancellor of the Exchequer, which is intended to shore up demand in the short and medium term.
Prices in all the major exporting countries and especially in the Philippines and Indonesia had increased significantly during Dec’19 to early Mar’20. To put it in perspective, average prices of DC from these two origins were around the US$ 1350 – 1500 mark in Quarter 2 of 2019. This went up to a band of US$ 1950 – 2200 from Dec to Mar. So an crease of between 44 – 46 % overall.
Prices from the Philippines continue to remain firm as the factories are reporting full order books until end of Q2 this year. Indonesia, on the other hand, are showing signs of weakness due to market correction. Given the overall demand situation, one would have expected sharper falls, but this is not happening mainly because factories are still reporting difficulties in getting hold of raw material coconut. So Philippine (and Sri Lanka) prices continue to hold between $ 2100 and $2200 on C&F Basis. Indonesia is currently between the $ 1950 to 2000 mark. All indications basis C&F Main European Port.
Spot availability is tight but if there is interest going forward please let us know.
Edible Solutions offer Coconut Milk/Cream, Creamed Coconut and Fancy Grades like Coconut Chips and Sweet Twine.
Our Coconut Milk (17% Fat) is sourced from Indonesia. It is free of additives and packed in 25 kg aseptic bags. Prices are firm but stable and we are able to cover forward positions through the year.
Creamed Coconut – Creamed Coconut Blocks (200 g) or Flaked Cream Coconut (14 kg cartons) or Coconut Cubes – is produced exclusively for Edible Solutions by our partners in Indonesia. The product is additive free. Private label packing is available against orders. Flaked Cream 14 kg currently in stock. Price moves along with price of DC.
Coconut Chips – Raw and Toasted. Prices are stable and there is spot availability. Our product is the thicker chip made in Sri Lanka.
Coconut Chips Flavoured – a range of flavours available for snacking and crunchy cereal mixes. Chilli Lime, Pineapple and Caramel Sea Salt flavours currently available.
Coconut Sweet Twine – new stock will be available in end March beginning April.
Crop availability in Iran and Pakistan
Iran crop: is not reaching UK and EU because of complete closure of supply routes via Turkey. Iranian borders are closed now.
Pakistan crop: is still reaching UK and EU but there is increased pressure on Pakistan which is hiking the prices.
Quality of crop
Iran: The Sayer Date Crop from Iran this year is excellent quality in terms of the fruit size. However, the quantity of crop is low. Combination of good size and low volume in the market has driven the prices up i.e. 30-35% up from last crop’s prices.
Pakistan: The crop is usual size however due to supply pressures the price has increased from the start of season price level.
Generally stock levels of date fruit (Sayer and Aseel) are low in the UK.
Shipments from Iran are completely closed since last few weeks, we are constantly
monitoring the situation and as soon as any supply routes become available, we will commence the import.
Prices of Sayer (Iran) 35% higher than last year
Prices of Aseel (Pakistan) increased around 15-20% since the market opening trading price in September 2019.
Sesame has been impacted severely by slump in demand from China and East Asia. Prices have fallen by around 7% since the beginning of December.
We have premium Indian Hulled and Natural Sesame Seeds arriving at the end of March. We will also be having small quantities of Toasted Sesame – both Hulled and Natural – to offer around the same time.
Crop receipts have been too good, pushing away buyers. Prices have fallen dramatically. New crop is offered at $0.05/lb discount to current. Corona virus and price falls are causing problems in market such as Middle East, China, India, with reports of defaults already occurring. We feel prices have fallen to levels where buyers should be covering some if not all of their requirements.
Splits and pieces are at very cheap levels, pieces are at 10 year+ lows. We are recommending all buyers to take long cover on these grades. The market will turn as it always does. The market on wholes not so certain. We believe prices could fall further as new crop arrives. Many Vietnamese processors are saying prices are already too low and have stopped processing. Seed prices can of course come down further if demand can not be resurrected.
TMO sold some of its holding, but at high prices. Shippers do not want to lower their levels, but again demand is driving prices lower. Contracts are not being delivered to Italy as it continues its shut down. Of course Ferrero is the biggest user of hazelnut in the world and is located in Italy. Bids that were not confirmed yesterday are being confirmed today.
Some cheaper Iranian material has entered the UK market making kernels and inshell more readily available. The Iranian product is offered better than US prices. We are not stocking the Iranian as we do not have the traceability for our BRC requirement.
We publish monthly Price Lists and our March edition is out now. Email us on [email protected] in case you would like to have a copy, mentioning your name, the name of your company, your location and a brief introduction about yourself and we will get back to you.
The Sales Team
Edible Solutions Limited