In literally all markets, specially soft-commodity-markets, because the weather plays here a dominant role, it is a permanent look for the most accurate estimation to hopefully find out what the market is going to do in the next weeks/months. This is highly important on both sides: for the purchaser as well as the supplier
Such knowledge can only be achieved after very precise evaluation of all essential factors.
To make things even more complicated: the moment one things he has done his home-work: that is to say he has calculated very precisely the factors supply and demand, currency and competition etc etc,
something unexpected and out of every-body’s control can happen and immediately will nullify the man’s carefully calculated knowledge about the market.
This not only applicable for commodity-markets but all markets like stock-markets, oil- and gas-markets,etc
What is the point: we all want to have a real chrystal-ball but fortunately there is none.
Of course there are some basic principals. There is no need to explain that.
Everybody, long enough in the “trade”, knows that.
OK just one example: it is a very old and general saying: after seven fat years, 7 meager ones will follow.
Let us concentrate on raisins:
we have seen, during the last 7/8 years, that prices have been going from USD 12/1300 for Thompsons to abt USD 25/2600. In other words: it doubled in the last 7/8 years. For golden mediums we have seen the same: from USD 17/1800, seven/eight years ago, to USD 3600 a year ago. In other words::…. prices doubled here as well!!
What was the result of this fortune: more and more acreages of uncultivated land were covered with vineyards and…..LET US NOT FORGET…… attracted by the high price-levels, competition, in many countries, saw their chances as well and planted more and more hectares of raisins……….
We have seen the same in Holland shortly after the Second World-war. There were no eggs and everybody wanted to eat eggs again.
Because of the strong demand the prices for eggs went up from 12 cent to finally 32 cents.
What happened then: everybody in the trade was buying young chicken, everybody was building big chicken-houses and in the end they made good money to start with but what was the conclusion in the very end:
too many chicken-farmers did the same thing at the same time and what was the result: after one year ……..the prices for eggs were back again at 12 cent.
What was the wrong conclusion and decision:: too many farmers, who were only making losses, stopped their chicken-business and left the market-place and what was the result:….. the price of eggs went up, quite swiftly again to 30 cents.
What is the lesson: only those entrepreneurs who do not go into stress and accept the fact that one year is not as good as the other one. Consequently he should make, in time, some savings, instead of new investments out of the extra profit for bad days so that he shall survive.
What applies for the farmers also applies for the producers and the purchasers. No one is excluded.
Don’t forget:: TREES DO NOT GROW INTO HEAVEN
It is this establishment which makes that we are not in a position to give out prices for a longer period.
It is simple: when buyers come to us we shall make an offer based on the knowledge we have at that specific moment.
You can try us.
Our experience is: buy your needs as you feel them but in portions.
You will regret the high ones but smile about the bottom-price so that, in the end, you have a fair average!!!
No special news from California, no further news from Chile or Turkey either.
Let’s wait what the expectations from the biggest suppliers (California and Turkey) for the new crop shall be. They are the ones beating the drums.