Dear Readers, November 29th 2013
Future dis balance between supply and demand
The fear is justified that in the years to come, we have to look forward to a disbalance, as described above, caused by a continuous, serious declining raisin-acreage in California
What is the reason?
More than 10 year ago already, Californian raisin-farmers complained about the very low raisin-prices (dollar cent 50 per lb at the time), where a bottom price of min. dollar-cent 70 was needed to survive. That was reason enough to start decreasing their acres of raisin-land in favor of almond-trees.
Today’s almond price, for top-quality, lies around USD 6900.- per ton, whereas prices for Californian Thompson raisins are in the region of USD 2400.- per ton c+fr which works out at around USD 1700.- per ton, farmer stock-price, being roughly abt. 80 dollar cent per pound.
As a result of the decline resp. lower crops, the raisin-prices started to climb which resulted in last years’ all time record of USD 1900.- for raw-material.
Despite this years’ positive crop-news, more and more farmers were/are cutting their vines for the simple reason, as stressed before, that almonds bring them now and in the future more than double, almost triple the price of raisins and by the same token, using much less costly labor.
Of course one can emphasize that this might give opportunities to other countries to fill up such shrinkage but before new qualities are acceptable for and implemented by industries and have them finally replaced by others, will take a lot of time because factories, for all kind of reasons, cannot take the risk to change a final product, a.o. taste- and texture-wise, overnight.
It goes without saying that such problems of e.g. dis balances and differences in qualities will be solved in the end but when above-mentioned important moves are taking place in one of the two main supplying countries the alarm-bells are ringing.
In this light and taking this years bad crop of Turkey’into consideration, it is not likely that raisin-prices can go sharply down in this and the following years.
after the serious frost-damage in September which stands automatically for a smaller crop (35/40.000 tons?) in comparison with last years’ big crop of 55.000 tons, the crop is developing well. We have to wait and see what really comes out. Quality- and quantity-wise.
A week ago we produced and shipped the very last containers of this season and closed the factory for maintenance and renewal to have a fresh start again at the end of January or so much earlier, depending on the time of arrival of the new crop.