Turkish Vine Fruit Update 10.10.24
Raw material availability and the quality of that vine fruit crop continue to dominate the Turkish market. Farmers are increasingly educating themselves via social media about global markets, prices paid by traders/packers, and crop developments/issues. This awareness is a complicating factor as farmers are trying to push the market higher by strangling supply into packers. Couple this with the fact there's next to no carry-in from the 2023 crop and it adds a layer of complexity that wasn’t expected to fully hit until March 25.
Demand on packers for prompt shipment is proving to be a challenge. Even the largest packers are having to juggle around production schedules to best meet departing vessels and demand. What packers aren’t seeing, however, is too much of a demand for long-term contracts. Buyers across the world are struggling to accept current price levels and are only looking to book 3 to 6 months in advance. This slowdown of demand has somewhat tempered the expected price increases on the run into Christmas as packers are looking to ensure they are maintaining a healthy forward book and as such there are some offers out there for limited stock at pricing that maybe wasn’t expected for this time of year.
Crop Availability
Following rains during harvest, the quality of the vine fruit drying was affected. Our packers have kept a keen eye on intake, and are now subsequently seeing darker fruit. In comparison to the last couple of years, Type 7s & 8s are more readily available throughout the region. These products usually command less of a premium than a Type 9 and this year is no different. Prices for 7s equate to 95 TL/kg whereas 9s are 100-105 TL/kg. I expect this gap to remain stable during the season.
The Lira v USD exchange rate is being manipulated by the Turkish government to maintain its strength. As such, export prices are firmer than perhaps where we would expect. Any move by the government to let the Lira adjust is not on the cards.