Quarterly Market Update – October 2022

October 2022

ItemCountry of OriginBeginning of harvestEnd of harvestUpdates
Baby CornThailandYear roundYear roundHeavy storms and subsequent flooding have destroyed many plantations growing baby corn. Harvesting of smaller, whole baby corn will take a longer time than previous seasons. Prices are on an upward trend, which we hope to offset with declining ocean freight.
Blended OilsVariesYear roundYear roundIndications are that soybean and canola crops will have good yields. Market pricing has opened higher than year-over-year but traders are hoping for a price decline as we head into Q4 2022.
MushroomsHollandYear roundYear roundThe Netherlands is starting to recover from challenges on components like tin plate, compost, and energy. Demand for product is exceeding supply despite a 20% cost increase.
MustardFranceYear RoundYear RoundThe industry is still working to recover from the worldwide shortage of mustard seed. France has started harvesting and Canadian seeds will be harvested during Q4 2022.
Tuna Albacore & SkipjackThailandYear roundYear roundCatchings are expected to improve as the end of the FAD seasonal ban closes out, but raw materials traders are holding back inventory to keep costs firm. We should see a positive offset with declining ocean freight.
Roasted Peppers and Sweety DropsPeruTwice per yearFebruary | AugustPeru continues to struggle with poor crop yields and cost increases for fertilizer, energy, and labor. The summer crop is finally starting to ship.
AvocadoMexicoTwice per yearMarch | October2022 forecasting has projected a decrease in supply of about 35%. Coupled with increased annual demand growth of 15%, we are facing a void this year. The 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.
Jalapeno PeppersMexicoTwice per yearAugust | JanuaryIncreased costs of raw materials, packaging, and fertilizer dominate the conversation. Crop yields are average but unavoidable base cost increases are being passed along to the end user.
RaspberriesSerbiaJuneAugustTotal tonnage from Serbia is down when compaired to 2021, which was also a poor year. Quality of the 2022 Serbian harvest is excellent. Forecasts indicate there will not be enough good product to go around and cover 2023 demand.
TomatoesTurkeyJulyAugustThe supply in Turkey has been steady, but the shortage in Italy and the rest of Europe caused by the extreme summer heat has unexpectedly increased pressure on the Turkish supply.
PeppersChinaJulySeptemberChinese crops are normal. We expect no supply issues. Ocean freight is coming down, causing improved costing. We do expect there to be higher demand for imports as the U.S. domestic market continues to experience lower than normal crop yields.
PepperonciniGreeceJulySeptember Greece had a late crop with poor yields compounded by high energy costs and a 200% increase in cost of fertilizer. Harvest will be 50-60% less than normal. Price increases are needed as growers are forced to spread fixed costs over a significantly smaller volume of production than previous harvests.
Risotto & Carnaroli RiceItalyJulySeptemberFarmers planted 20% less acreage in 2022 and crop yields will be down in volume by 30% due to drought.
ArtichokesPeruAugustNovemberPeru is booked to capacity for the current harvest. Base costs are up 15%-20% due to labor, fertilizer, and packaging. It is too early to tell what volume of crop Spain will have come December and January but all eyes will be looking for Spain to cover any Peruvian shortfall.
Green OlivesSpainOctoberJanuarySpain is working through a difficult crop due to lack of rain. Yields are average but the size of the olives is of concern.
Caramelized OnionsSpainOctoberFebruaryDry weather has effected the growing region, but the longer growing season allows for minimal disruption on raw materials. We do continue to battle volatile input costs, such as those of sunflower oil, energy, fertilizer, and labor. We are not yet seeing big declines for this ocean freight lane to offset rising costs.
Olive OilSpainOctoberFebruaryDrought has affected the entire Mediterrean growing region and particularly Spain, which is the largest tonnage producer in the world. Right now there are no indications for price declines as any gains in exchange rate have not offset speculative price increases.
QuinoaPeruOctoberOctoberCosts remain firm due to crop yields being lesser than expected. Costs will depend of global demand. We hope to see a slight offset with declining ocean rates.
Onions BlanchedChinaOctoberNovemberChinese crops are normal. We expect no supply issues. Ocean freight is coming down, causing improved costing. We do expect there to be higher demand for imports as the U.S. domestic market continues to experience lower than normal crop yields.
SpinachMexicoNovemberMarchThe current crop is healthy but higher demand is making bookings tight.
Brussels SproutsBelgiumNovemberDecemberThe crop is steady and as expected. We expect no adverse conditions to plague harvest and production. Ocean freight for this lane has not improved as other lanes have.
PineappleThailandDecemberJanuaryWinter crop raw materials are projected to be steady to slighty increased in avaibility. We will need to keep an eye on production input costs, as these are still experiencing inflationary pressure.

Logistics Update

Decline of ocean freight rates is much steeper than originally anticipated. The global freight index is down 44% over Q1, but still about 3 times as much as the pre-pandemic average.