Market Update

MAY 2024

SHIPPING AND LOGISTICS UPDATE

Rates for May are looking to increase from the 25th May. At present the market is very unpredictable and ever changing with the rates continuing to increase and cause carriers to cancel all long term rates, including FOB contracts.

These are some factors that are impacting the rates:

From China to Europe and Med market, due to Red Sea Crisis many vessels need to transit via Cape Good, which has caused shipping lines costs to increase. Furthermore, in recent developments, the Houthis in Yemen have stated they will expand their attack arrange from the Red sea to Mediterranean Sea. Many vessel have been attacked so vessel’s transit time will be longer than before.

The second main issue is equipment . Many shipping lines have had a lack of equipment due to increased transit from China to Africa. The vessel and shipping capacity is very limited but has since increased and caused congestion in Africa. Equally, there is increased congestion in Europe but due to transit time increase, many vessels are unable to go back to China in time causing further shortage.

The final and most important issue is that all shipping alliances have increased rates and flooded the market with similar levels across China Main Ports, with rates circa USD6000/6500 per HC. Due to the current global situation, it is a good time for them to control the market and increase rates accordingly.

We anticipate that the rates will continue to increase into June and July by an additional USD500 per TEU.

ONION MARKET GLOBALLY

Very high to near historical high prices for onions are seen on many markets in different parts of the world. This is driven by several factors, with the shortages being exacerbated by extended onion bans from traditionally large exporting countries of India and Egypt. European importers have turned to China to supply more onions due to the bans as well as lower production in most of Europe.

Spain is seeing high prices due to a smaller harvest volume. Given the higher prices Spanish producers are set to expand production this year.

CHINESE ONION

Very high to near historical high prices for onions are seen on many markets in different parts of the world. This is driven by several factors, with the shortages being exacerbated by extended onion bans from traditionally large exporting countries of India and Egypt. European importers have turned to China to supply more onions due to the bans as well as lower production in most of Europe.

Spain is seeing high prices due to a smaller harvest volume. Given the higher prices Spanish producers are set to expand production this year.

CHINESE GARLIC

Although the acreage is similar to last year’s, this season is expecting to see a decrease of raw garlic material between 20% and 40%, due to unusual cold weather before and after Chinese New Year.

Price speculation has been stimulated and as a consequence, current pricing is much higher compared to last year’s.

CHINESE PEPPERS

This year, the acreage has decreased over 30% resulting on an significant decrease of raw material and expected higher pricing than last year.

PERUVIAN AVOCADO

An increase in temperatures of between 4 and 5 degrees Celsius is generating a reduction in fruit size due to unfavourable weather conditions linked to the El Niño phenomenon.

The size of the fruit is showing a slightly smaller trend, with a reduction ranging between 20% and 30% compared to initial expectations.

Production is also expected to decrease by at least 15% over the initial estimations, this means a drop of between 25% and 30% compared to the previous season.

As a result, it is expected that there will be an increase in prices in the international market.

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