Every year and for every product, farmers, producers, traders and buyers wish to know how the price-fluctuations for the new season will go.
If prices should basically be appointed by means of worldwide new crop figures (1.42 mln ton for the season 2015/2016, in case of raisins), related to the crop-figures of the year before (1.5 mln ton 2014/2015), it should, theoretically, be not too difficult to foresee what way the market in general would go.
Practice is different however and far more complicated than it looks like.
Again, this does not only apply for raisins but for all products.
We should not forget the most important but simple and direct factor in this respect: sellers want the highest and buyers the lowest price!
What makes things complicated then? Let’s give an example.
There is a cheaper alternative in the market. The purchaser is hesitating however. He is working with the same quality and the same supplier for many, many years and the consumer is used to that very taste, texture and outer appearance.
The alternative might be cheaper and good reason to make a change of supplier but does it bring the same end-result for the consumer and will the supplier be in a position to offer, next season, the very same quality and price or was it simply an attempt to break in? Being seen from the point of the buyer: a change brings always risk. This is the reason that final buyers/industries will cover those risks as good as possible and henceforth they will accept only preferred suppliers after having scrutinized them in every aspect.
Notwithstanding the above, there is always the possibility that adverse weatherconditions diminishes said crop in such a way that buyers have to look for alternatives.
To exclude such situation, optional contracts are sometimes drown up, giving the supplier/seller the chance to deliver a comparable quality, which has been accepted before by the buyers.
If the above examples do not apply, there are still the risks of carry-overs which can have strong influences for a certain time on the market, as a whole.
Should not there be any old crops left, which could spoil prices, there can still be a.o. currency-risk for buyers and sellers.
Should these risks been covered up through the bank, there is still the factor RUMOURS.
There are always rumours in the market. In this respect an old saying is: SELL the rumors and BUY the facts.
In other words do not let yourself be guided by rumours. In the end, a market will be made by facts… not by rumours.
We write the above because markets are always based on factors which are going to happen in the future. and since nobody has a crystal-ball, one has to act very cautiously and it is good, that way:
because…..if we should know everything before, we all should do the right things and would lay down in the sun.
On top of what has been mentioned so far trade-embargo’s can turn up, political interferences, exportbans, new foodregulations and the lot can happen.
Because all these things play in the FUTURE and thus we have to use and torment our brains to get, hopefully, a fair result.
In all modesty, the one who knows better, should step forward because looking in retrorespect how things should have gone, is quite easy.
We have said it many times before: the above is the reason that we can only make offers (and we will) when we get the serious interest and shall handle then to the knowledge we possess.
To stress it again: markets can change by the day and can make the difference between profit or loss.
Off late we heard that shipments from California were 17 percent less than previous and that could possibly mean that those shipments have to be replaced by other origins but……. but….. one cannot be sure about it. Just quesswork!!!.