January 2022

ItemCountry of OriginBeginning of harvestEnd of harvestUpdates
Baby CornThailandYear roundYear roundA colder climate is likely to reduce yield and raw materials costing will be higher. Packaging is also a major contributor in costing increase. Rates out of Thailand have been inconsistent. Higher "premium" rates are still guarantee a booking.
Tuna AlbacoreThailandYear roundYear roundPreviously higher priced raw materials is offset by improved catchings. The market has not tolerated the elevated costs, resulting in softer demand. This should drive raw materials costs down, but how much still remains to be seen. COVID remains a factor in plant processing personnel. Rates out of Thailand have been inconsistent. Higher "premium" rates are still guarantee a booking.
Tuna SkipjackThailandYear roundYear roundPreviously higher priced raw materials is offset by improved catchings. The market has not tolerated the elevated costs, resulting in softer demand. This should drive raw materials costs down, but how much still remains to be seen. COVID remains a factor in plant processing personnel. Rates out of Thailand have been inconsistent. Higher "premium" rates are still guarantee a booking.
Onions BlanchedChinaAprMayNo changes in raw materials and operational costing. Frozen rates out of China remain high. We hope to see some relief after the Lunar New Year break.
PineappleThailandAprJunDrought conditions are driving up raw materials costs. Quality of raw materials is questionable due to higher nitrate presence. Packaging, operational costs, and secondary ingredient costs are also up substantially, just from the third quarter of 2021. Rates out of Thailand have been inconsistent. Higher "premium" rates are still guarantee a booking.
OkraEl SalvadorMarJunThe new crop looks promising but we will see inflational pressure due to higher plant processing costs. Rates are consistent with the market. It is a shorter transit and has had fewer complications.
AvocadoMexicoTwice per yearMar/Oct2022 forecast has projected a decrease in supply of about 20%. Coupled with increased annual demand growth of 15%, we are facing quite a void this year. Starting point for the season is an increase of 25% year-over-year raw material cost and 42% increase over the 5-year average. In short, this year will carry a heavy cost increase for whole fruit and has the potential to be higher and more sustained than record costs incurred in 2017.
Blended OilsVariesYear roundYear roundMost of the current trade movement is due to weather in South America. There is not much talk about the US crop estimates yet because it is a bit early. Soybean oil will remain in current trading range with canola oil being tight supply the back half of the year.
Olive OilSpainNovMarSpain continues to rule the market as the main production season nears its close. The lack of rain encouraged a fast harvest. While sufficient oil volumes are available, there wasn’t much left to fall off the trees that could be gathered for refining. January saw a price spike on refined and pomace. Buyers have been waiting since the beginning of the harvest for the competition to warm up, as evidenced by a 10% reduction in US imports at the beginning of the crop season. Expect continued volatility driven by rising labor and production costs, global economic uncertainties, and erratic weather patterns.
Green OlivesSpainOctDecA difficult crop with the rising cost of raw materials added to increase costs of labor, packaging, and operational costs. Expect a minimum of high single digit increases in price.
ArtichokesPeruJulOct2021 saw a large demand increase on Peruvian artichokes due to the poor Spanish crop. This led to buyers not receiving all requested bookings and zero carryover stocks. Due to frost, projections from Spain have the 2022 crop to be 30% less volume vs 2021. If this holds true, Spain will not have enough materials to cover demand along with increased pricing. Peru and Spain are being hit with increases of 30-50% for all various costs of production.
MushroomsHollandYear roundYear roundAlmost all costs of components went up close to 20% ( tin plate, compost, energy, packaging). At current time, demand is exceeding supply.

Logistics Update

q1 supply chain image

Looking ahead in 2022, most experts agree that the pressure on global supply chains will continue—and the light at the end of the tunnel is not to be expected until the second half of the year at the earliest.
The pandemic has exposed the vulnerability of global supply chains—a problem the logistics industry will continue to face this year. A high degree of flexibility and close cooperation between all parties in the supply chain is required to be well prepared to respond to the crisis and, hopefully, to a post-COVID era. Investments in transport infrastructure, such as those being made on a large scale in the United States, are helping to make ports and airports more efficient, while digitalization and automation are important to optimize logistics processes further.

Not to be forgotten, however, is the human factor. The shortage of labor—not only among truck drivers, but throughout the supply chain industry; from administrative roles to dock workers—shows that efforts are still needed to maintain logistics supply chains. Restructuring supply chains to make them sustainable is yet another challenge.

There remains much work to do for the logistics sector, which has certainly proven its ability to provide flexible and creative solutions.