Quarterly Market Update – January 2021

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Quarterly Market Update – January 2021

January 2021

ItemCountry of OriginBeginning of harvestEnd of harvestReport Quarter
Baby CornThailandYear roundYear roundSupply and harvest are steady for this year round-item. No significant adverse conditions are plaguing harvest and production.
Tuna AlbacoreThailandYear roundYear roundSupply and pricing are stable. No significant adverse conditions are plaguing supply and production.
Tuna SkipjackThailandYear roundYear roundCatch rates on skipjack have been less than expected. This is unfortunate as we head into Lent season. Pricing will rise slightly.
Onions BlanchedChinaAprMaySupply and pricing are stable. No significant adverse conditions are plaguing supply and production.
PineappleThailandAprJunPineapple raw materials remain low. Encouraging news is that the winter crop is yielding better than the summer crop. Still we have quite a way to go, as we continue to face high pricing, low raw materials, and weakened demand.
QuinoaPeruMayJunCrop yields are expected to remain strong. There is a possiblity of a 30-day delay in harvest due to lack of rain but, at this time, concerns are low that it will affect health of the crop and supply.
OkraEl SalvadorMarJunSupply and pricing are stable. No significant adverse conditions are plaguing supply and production.
AvocadoMexicoTwice per yearMar/OctFruit is of good size and quality. Crop yields came in as expected
Blended OilsVariesYear roundYear roundSpeculation is driving pricing higher along with issues overseas with dry weather and labor strikes. Hopefully this will be a short term issue but expect a volatile Q1 2021.
MangoMexicoJunAugVolume fell short of expectations due to uneven fruit maturity in the fields. Less volume has led to a cost increase on the Kent variety.
Arborio/ Carnaroli RiceItalyJulAugRaw material price increased due to higher demand and lower availability.
Olive OilSpainNovMarHigher worldwide demand and no carryover stock led to price pressure as all major producing countries except Spain have lower crop yields.
Green OlivesSpainOctDecA short harvest for manzanilla and gordal (queen) varieties led to high raw material costs.
ArtichokesPeruJulOctRaw material costs were up 10% vs 2019.
MushroomsHollandYear roundYear roundCompost and labor costs were up 10-15% leading to cost adjustments in base pricing.

Logisitics Update

boat

2020 was an abnormal year in freight because of COVID-19, and at this rate, 2021 is proving to be equally unpredictable.   

Due to persistent strong cargo demand, most ocean carriers have deployed additional vessels, leading to infrastructure challenges in US ports. The port congestion combined with COVID-19 related workforce constraints has led to massive delays and a high number of vessels waiting at anchorage to berth, ultimately resulting in much needed empty containers not returning to origin fast enough and the vessel schedule reliability is suffering. Particularly hard hit is China to Savannah trade, with 26.4% reliability.   

COVID-19 cases are on the rise again and many places are locking down again. The introduction of a vaccine may bring back some sense of normalcy, but it is still too early to tell. Additionally, the inauguration of a new United States president could have some impact on Asia to United States freight trends and rates. While I expect the situation to ease slightly during the Chinese New Year break, I expect the severe equipment imbalance and subsequent record high ocean freight costs to last until end of Q2 2021.  

Quick adaptation and flexibility have been two saving graces as we navigate these uncertain waters. COVID-19 has caused irregular shifts in trends and cycles for most industries, freight included. Although rates are at record-breaking highs and capacity at unprecedented lows, Savor shipments have continued to move with regular flow. Delays have been common, but we have not seen any major halts or service interruptions.