Turkish Sultana & Raisin Update

Relating to the recent news and dramatic market changes, we would like to give you brief market information about Turkish Sultana Raisins.

Nowadays, raw material as well as the export market of Turkish Sultana Raisins having active days. Firstly, on 19th Jan 2016, EU Commission has published a Regulation (EU 2016/60). Regulation of the European Parliament and of the Council as regards maximum residue levels for chlorpyrifos stating that according to EU commission, Raisins MRL content lowered 0,5 ppm to 0,01 ppm starts from 10 August 2016. This news made a shock affect in the market in first weeks of February. Mentioned Chlorpyrifos ingredient exist in various legal pesticides in the market and widely used in all over the Turkish vineyards. Mainly against the diseases on bunches, pesticides that have active element of chlorpyrifos are used from the start of August when bunches appear. So the first step from the government should be the recall the all type of pesticides that has the ingredient from the market and ban the usage of the such pesticides in vineyards and finally of course to control the sustainability.

Turkish raisins crop 90% is exported to EU countries. As a result of planned 10th August is very soon for agricultural industry, it appeared to be a very big risk that current remaining crop cannot be exported to EU that has widely occurrence of chlorpyrifos. This shock affect pulled the bourse prices down to TL4,10 levels in just 3 weeks from TL4,80 previous levels.

Panicked raw material handlers try to sell out their stocks in order to clean current crop raw materials that made a huge supply in raw material market. Also export offer prices come to USD.1650-1700pmtons Fob İzmir levels due to the big supply. Accordingly weekly export volumes, we can see also the shipments reached almost 5000mtons of sultana raisins per week that is even higher than last year with a much bigger crop size.

Around 10 years ago, one of the active substances from a widely used pesticide was also forbidden from the EU in a very short duration. At that time, meetings with the EU community and Turkish government resulted that legislation has postponed 1 year more for Turkish Raisins product item only in order to protect the crop, production and trade business. Many exporters this year is also expecting such conclusion from already started meetings with EU commission. If another a year postpone is gained, growers and government may have enough time to recall and clean the prohibited pesticides as well as the market can get to normal price levels. Otherwise, not only this year but also 2016 crop prices will be affected by this regulations change that Turkey is historically start new seasons with carry-over stock.

Moreover, still too high temperatures goes on the production areas which we mentioned before is a big risk of early born. Today, we can see the vineyards already awake. February was averagely 5-10C above the seasonal temperatures. These days, we see 25-28 C in Manisa production areas that may provoke even faster growing of the plants. Eventually, we may see a high risk of damage if frost condition end March or beg. April 2016. Resulting the vineyards are growing very early this season, cold related incidents may damage in big percentages of the 2016 new crop. Together with the pesticide issues, raw material prices may hit very high level in the beginning of the new crop. That’s the reason nowadays many European buyers do as much as contract from the record low prices this year.

Source: Dorain Trade