TURKEY: We have said it some time ago already (see our news-letter of the 1st of October) that it is abnormal to see prices/quotations from Turkey at levels which were about USD 4 to 500 over those of Californian Thompsons.
Nobody has seen something exceptional ever before.
What one can distract from such situation is that, at the time, there has been a total dis balance between demand and supply, obviously, as a result of a very disappointing crop.
Such exaggerated over-reactions (mostly due to the shorts in the market) are quite normal in commodity-markets, as well as in the money-markets.
Once the smoke-screen has cleared, reality will slowly come back.
As a result of the forementioned, we have seen prices for Turkish nr. 9 already coming down to more reasonable levels (USD 2600.-), although we can hardly imagine that this is a level at which buyers are prepared to cover all their needs for the new season.
CALIFORNIA: With this year’s excellent crop, in the first place quantity-wise and with price-levels far under those of Turkey, it is clear that there is, again, no need to start panicking on buyers’ side, respectively to enter the market aggressively.
We expect that only those purchases will take place which are needed from now until the end of January.
By that time we shall have a clear picture about the S-African crop and also a more precise picture can be given about what we may and may not expect from Chile.