Quarterly Market Update – January 2024

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Quarterly Market Update – January 2024

January 2024

ItemCountry of OriginBeginning of harvestEnd of harvestUpdates
AnchoviesMoroccoYear roundYear roundOur anchovies are processed in Morocco using Peruvian raw materials. The Peruvian government put in a ban on fishing anchovies to allow for larger sizing. This has caused a shortage in the market, causing producers and customers to seek other countries of origin. Additionally, our product is in olive oil, which has experienced a dramatic increase in cost. We had hoped for a quick better outlook on raw materials but that has yet to happen.
Baby CornThailandYear roundYear roundWhole baby corn is still experiencing supply difficulties. The industry is currently experiencing a lack of seeds for planting.
PineappleThailandAprilJuneDrought and El Nino have resulted in lower availability of raw materials in general, resulting in a scarcity of choice grade. Farmers are harvesting product earlier, and also using larger amounts of fertilizer. This is causing higher nitrate levels in the raw materials. The U.S. dollar is also weaker against the Thai Baht. We will not see any relief in pricing in the near future.
QuinoaPeruMayJuneEl Nino is once again cited as the primary factor in reduced rain, causing lower yields, even as Peru-origin raw materials remain in high demand. Prices are expected to continue upwards. The severity of the increase will be dependent on rainfall totals and other agricultural inputs.
PeppersPeruMayJulyWe have been short most pepper SKUs the last part of the year due to a major producer exiting the business, causing a shortage of product. We were able to acquire product on a handful of items, but won’t see real relief until new pack in July.
MangosMexicoJuneAugustWeather issues have caused a shortage in Mexico and Peru. Varieties such as Kent, which are in high demand, are extremely difficult to procure. We anticipate the situation will improve as we get to August.
Onions BlanchedChinaJuneAugustIt’s a little early to report on onions and peppers out of China but Europe’s harvest was short this past season. For the U.S. domestic market, onions are in good shape but peppers have come in short. This will lead customers to seek product from other origins. Raw materials for our caramelized onions are secured through the next harvest season.
Yellow TomatoesTurkeyJuneAugustPlanning for the new season begins in February. Now is the time to discuss new or additional demand so we can adequately prepare for the new season.
Jasmine RiceThailandJulyJulyThai jasmine rice will see higher prices for the new year. The issues cited are not specifically related to Thailand but Asia in general. The lack of white rice in India and Vietnam, due to climate change impact, is causing panic buying. Also, the U.S. dollar is weaker against the Thai Baht and this contributes to higher costing.
ArtichokesPeruJulyOctoberEl Nino hit Peru in the first half of 2023. Rains and floods caused significant issues while now higher temperatures are causing crop issues. As a result, plants are producing fewer units and smaller sized artichokes. Yield will turn out to produce 30-35% less than the previous year.
Ripe OlivesMoroccoOctoberJanuaryPoor weather along with excess demand have caused major issues in Morocco. Farmers are demanding higher prices for their product and are demanding prepayment. This is causing suppliers to need to ask for prepayments as well.
Olive OilSpainNovemberMarchThe olive oil market is continuing to climb to start out the New Year. Producers have had to buy more product at higher prices. This, paired with countries restricting olive exports, has resulted in much smaller olives to purchase. Weather has caused poor olive harvests for two consecutive years.

Logistics Update

Ocean freight is currently running efficiently. However, there are 2 canal issues we are watching closely.

Suez Canal - Recent attacks on ships in the Red Sea have prompted carriers to divert ships from the Suez Canal, rerouting through the Cape of Good Hope. This is a fluid situation as carriers evaluate the impact on routing, transit time, and costs. However, rerouting is expected to increase overall transit time by approximately 10-14 days. We are building the incremental time into our supply modeling to ensure adequate service to our customers. Additionally, we predict this situation will result in carriers implementing additional surcharges and increasing rates.

Panama Canal - The Panama Canal is being impacted by a severe drought. This major maritime trade route has seen very low water levels and has been forced to reduce the number of ship crossings. This has caused a vessel traffic jam and increased shipping times. On December 15th, The Panama Canal announced it will increase the number of booking slots available. From mid-January, the canal authority said it will operate at 24 transit slots per day, compared to the 18 it had planned in a prior announcement.

Ocean Freight Rates - Ocean rates will likely remain at the current affordable levels the first nine months of 2024. We are anticipating potential increases (10-15%) moving into the peak shipping season in Q4. Unpredictable factors, such as ongoing global disruptions including the Israel-Hamas and Ukraine conflicts, could create issues, and, in turn, spontaneously drive market rates higher.