• 16 Jan
    Latest: Frozen Concentrated OJ Futures

    Latest: Frozen Concentrated OJ Futures

    Jack Scoville March update 2020

    FCOJ prices yo-yo as coronavirus adds to woes

    FCOJ futures have had a relatively wild ride in the last few weeks.  Prices went above 102.00 May for the first time since the beginning of the year in February and acted ready to move higher and perhaps significantly higher.  Then, prices stalled and futures moved back down into the trading range between 98.00 and 102.00 for a few weeks before dropping below support and testing down to 92.15 May.  Then the Coronavirus hit and futures went back up to the range.  Now prices are fading lower again.

    It has been quite a ride and it is somewhat disappointing that the onslaught of the Coronavirus has not really produced more demand for FCOJ in the American market.  After all, Americans should want to try to prevent getting the virus and one way to do that is by drinking a glass of Orange Juice each morning.  But the demand bump has been minimal and this highlights the problems with the market right now.

    There are plenty of Oranges in Florida right now for making FCOJ.  The crop is still being harvested but all reports indicate that a bumper crop has arrived.  There are reports of some production problems this year in Mexico from earlier dryness, but Brazil’s crops are looking good and will offer plenty of competition for sales abroad and here at home.

    On the demand side, the Coronavirus makes transportation that much more difficult.  The workers on the ships could carry the disease and people with the disease or even virus free are not going out too much.  So, the demand might crop due to the virus instead of increase.

    FCJ futures can hold in the 90’s for the foreseeable future either way.  Prices might be cheap enough although historically prices have been even lower that the current levels.  But there is no real reason for any kind of a major up move in futures to develop anytime soon.  The best the market can hope for is a choppy and sideways trade rather than a V bottom and a big move from here.  We will need to absorb the harvest before any kind of a major rally can even be contemplated.  The amount of FCOJ made from the current crop plus imports will go a long way to deciding the longer term upside price potential.  For now one would think that the price rally potential is rather slim.

    By Caroline Calder Features
  • 16 Jan
    Putting the ‘great’ into pineapple juice

    Putting the ‘great’ into pineapple juice

    Josep Lay, Managing Director of PT Great Giant Pineapple provides some insight for fruitjuicefocus.com

    Principal producers

    The big four pineapple producers in the world are Thailand, Philippines, Indonesia, and Costa Rica (85-90%).  Thailand’s production in 2019 is expected to drop to 1.1 million tonnes.  The Philippines production remains stable over recent years, while Costa Rica is now producing more in NFC.  Indonesia’s production keeps growing steadily but will not be able to substitute the shortfall of other countries.

     

    A passion for pineapple – PT Great Giant Pineapple

    PT Great Giant Pineapple (GGP) operate on a 34,000 ha plantation area in Lampung, Indonesia, with some 25,000 employees.  This is the world’s single largest integrated green production facility producing more than 700,000 tonnes of pineapple annually. Rainforest Alliance Certified – GGP commits to control every step of the process from plantation to processing and shipping.

    Fully traceable

    Their system and process allows the company to trace from finished product to a specific planting area. Since our establishment in 1979, PT Great Giant Pineapple’s (GGP) has become the largest private label manufacturer of canned pineapples in the world and a prominent source of premium pineapples. Being farmers at heart we pride ourselves on implementing sustainable agricultural practices, at the core of our business operations. With one in every 4 pineapple originating from GGP, our plantation covers 90,000 acres, and our unrivalled expertise in fruit cultivation is supported by a seamless supply chain alongside our fully integrated facilities.

    Sustainable

    We began implementing our sustainability initiatives form 1980 by actively maintaining our natural lagoons to harvest rainwater thereby reducing our consumption of ground water.  Since then we have invested in various initiatives relating to the environment as well as the social and economic welfare of local communities.

    Premium products

    GGP are the largest private label manufacturer of canned pineapples in the

    world serving leading retailers and brands from over 60 countries with a market share of 25%. Premium products include pineapple in pouches, fillings and spreads, canned pineapples and tropical fruit salad, pineapple juice concentrate (PJC), clarified pineapple concentrate (CPC), deionised clarified pineapple concentrate (DCPC), not from concentrate (NFC).

    PRODUCTION OVERVIEW

    Costa Rica pineapple landscape. After reaching a USD200 million record in exports in 2016, in 2018 the value of pineapple juice sold by Costa Rican companies abroad fell to USD104 million. The 2016 advantages such as climate and production problems in South East Asian countries such as Indonesia and the Philippines contributed to the spike in trade.

    At the beginning of 2019 there were 44,500 hectares dedicated to fruit cultivation in Costa Rica, however because of high production costs and a drop in International prices predicted by 2021, the cultivated area could fall to 38,000 ha. Growing competition from Colombia, Panama and Ecuador producers who have managed to gain market share in the US and Europe is noted as the reason.

    Thailand pineapple harvest. Experiencing the lowest tonnage in the last 20 years Thailand has significant production hurdles to overcome.  Due to the very low price of fresh pineapple in previous seasons, farmers did not take care of plantations and this has affected total production volumes, size of fruit and quality. Low yields are predicted to continue in the short term, and also noted is that pineapple production is seen as more labour intensive than other crops such as mango, jackfruit, or rubber. There has been a significant consolidation of canaries in the region from 2011-2019.

    Philippines and Indonesia. Philippines has been facing dry spells although predictions are for this to normalise, production is slightly less compared to 2018. The dry season in Indonesia has turned into the ‘long drought’ from May-Nov 2019, not enough rainfalls during those period. Production of Indonesia in 2019 is expected to be higher than 2018. Due to long drought in 2019, Indonesia is expecting a lower production volume in Q1/2020 around by 20%.

    Production opportunities for GGP.  Thailand is facing a crisis in pineapple industry, not enough workers and no interest for Thailand’s young generation to be a farmer. Declining trends in Thailand’s pineapple tonnage provides opportunities for growth of production volume at GGP. GGP is preparing to minimize the impact of El Nino or drought by investing more water reservoirs. GGP’s water reservoir enable to sustain for 90 days without rain. GGP is a company concerned with ‘Going Green and Sustainability’, creating a food estate that has no waste, every single item is utilized, from the pineapple skin, manure from the cattle operation as well as other solid waste.

    Data from CBI – Market and quality 

    The European Union is the largest market of pineapple juice with more over 50% share of the total world imports according to the CBI. The Netherlands is the largest European importer of pineapple juice, followed by France and Germany. The major developing country suppliers are Thailand and Costa Rica.

    Pineapple juice may contain finely divided insoluble solids, but it does not contain pieces of shell, seeds, or other coarse or hard substances or excess pulp. The juice intended for export is usually concentrated and later reconstituted with water due to practical reasons of lowering transportation costs which would otherwise include transport cost for water and packaging.

    Quality

    The basic quality requirements for pineapple juice are defined by the following parameters:

    • Colour: characteristic of the variety, most commonly golden yellow to amber.
    • Flavour and odour: distinct pineapple flavour and odour, free from foreign flavours and odours.
    • Brix level: quality of concentrated pineapple juices is mainly defined by the Brix level (sugar content of an aqueous solution) and Brix level directly influences the price of the product. According to trade classification the highest category for pineapple juices is defined with Brix level exceeding 67. However, in European industry practice the most common concentrated pineapple juices used by bottlers are around 60-61 Brix and 65 Brix. According to the European Union directive minimum Brix level for reconstituted pineapple juice is 12.8.

    Additional quality requirements

    • Pulp content: pulp content may vary and commonly it is between 6 and 18% in the concentrated pineapple juice. Importers may require more pulp content as visible pulp in juices is becoming more popular among European consumers.
    • Acid level: citric acid level is beside Brix the most common parameter that influence the quality and price of the product. Usually acid level for concentrated pineapple juice is 2-4% of citric acid.

    Which European markets offer opportunities for exporters of pineapple juice

    Imports

    Over the last five years, imports of pineapple juice in the European Union have increased annually by an average 9% in value, but decreased by 1% in quantity, reaching EUR521 million and 376,000 tonnes in 2016.

    Decreasing import quantity compared to value indicates an increase in import prices in 2016. The average import price for concentrated pineapple juice in Europe increased from EUR1.7/kg (CIF) to EUR2.4/kg.

    European Union imports of pineapple juice are concentrated, and three top importers (the Netherlands, France and Spain) together account for more than 60% of total European imports.

    The largest imports from countries outside the European Union are from Thailand and Costa Rica. Together they hold almost 80% of the total market. Although the Philippines is one of the largest exporter of pineapple juice in the world, they are traditionally more focused on the US market.

    Imports from Brazil showed very significant average annual growth of 103% over the last five years. Other growing exporters are China (56% annual growth) South Africa (37%) and Kenya (15%).

    The leading external destinations for pineapple juice processed in Europe are Saudi Arabia, Iran and Egypt. There was a very high export increase to Iran, from EUR129 thousand in 2012 to EUR3.4 million in 2016. This export to Iran is mainly recorded from Germany.

    Sources:  CBI, PT Great Giant Pineapple, ITC Trade Map, Central American Data, Thai Statistics Office,

     

    By Caroline Calder Features
  • 16 Jan
    Asia – Coconut Palm Group Co and fruit juice in Cambodia

    Asia – Coconut Palm Group Co and fruit juice in Cambodia

    Coconut Palm Group is planning to invest in coconut plantations and set up a factory in Cambodia to produce fruit juice, said its general manager Zhao Bo at a recent meeting with Minister of Agriculture, Forestry and Fisheries Veng Sakhon.

    The company is the biggest natural plant protein soft drink producer in China and specialises in processing tropical fruits such as coconuts. Sakhon said the ministry is pleased to support the company’s investments in Cambodia.

    “If we incorporate suitable growing techniques for producers, it will help to boost coconut production with high prices and good demand,” Sakhon said, adding that the ministry estimates that the company will need some 14,000ha for the plantation.

    “We need to study the demand for the nut and its market potential before establishing a natural juice factory to supply the domestic and international markets,” he said.

    Zhao said the Coconut Palm Group, located in Hainan, has annual revenues of USD400 million and uses 600,000 coconuts a day in its production. The company also employs 6,000 workers and exports its juices to 38 countries. Phnompenhpost

    By Caroline Calder News
  • 16 Jan
    Italy –Italian blood oranges – juice trade growth

    Italy –Italian blood oranges – juice trade growth

    Ortogel, was founded in 1978 by a citrus grower who built up a plant for the production of frozen vegetables in the industrial area of Caltagirone (Catania province). In 1982 Ortogel changed to the production of frozen natural citrus juice, especially for pigmented oranges, applying the cold and freezing technology, used for the frozen vegetables, to the citrus field, therefore obtaining natural juices, not from concentrated, without additives, and not pasteurisation, of high quality, never produced in Italy before on an industrial scale.

    Presenting at a recent Asia trade fair the outlook for Ortogel looks positive. The Chinese market in particular has identified Italy as a partner with an eye to sustainable production, high quality and food safety. Exports of Italian food products to China are seeing a double-digit growth and reached EUR439 million in 2018, a value that has almost tripled over the past 10 years (+254%).

    The Ortogel range includes juice from Blood Oranges, Blond Oranges, Tangerines, Lemons, Clementines and Grapefruit. The Blood Orange juice launched in Italy and abroad with the name ‘Gelidea.’Ortogel is leader producer of Private Label NFC Sicilian Citrus juice packed in gabletop/tetrapak

    Italian Private Label

     

    By Caroline Calder News
  • 16 Jan
    China – The US and China reach a ‘phase one’ trade deal but has a long way to go

    China – The US and China reach a ‘phase one’ trade deal but has a long way to go

    The deal takes additional escalation of tariffs by both countries off the table but is lacking specifics on when existing tariffs on US fresh produce and other agricultural commodities will be removed.

    The Office of the US Trade Representative said in December that the agreement requires structural reforms to China’s economic and trade rules in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.

    The deal also has a commitment by China, according to the USTR, that it will make substantial additional purchases of US goods and services in the coming years.

    Richard Owen, vice president of global membership and engagement for the Produce Marketing Association, said in a Dec. 13 e-mail that the deal is a good sign that trade relations are thawing of trade relations between the two countries.

    However, the discouraging part of the announcement is that the tariffs imposed by China do not appear to be addressed in the phase one agreement, he said. “The tariffs currently in place by China range from 10% on frozen vegetables and fruit juices, up to 50% on fresh apples, cherries, oranges, grapes and plums.”

    The dispute with China had its beginning on May 10 last year, when President Trump increased duties on USD200 billion worth of Chinese products from 10% to 25%. China retaliated in July last year with 40% retaliatory tariffs. US fresh non-citrus fruit exports to China from November 2018 to October 2019 totalled USD110.3 million, down 18% from USD122.2 million in 2018 and 44% down from USD177 million in 2017.US fresh citrus exports from November 2018 to October 2019 totalled USD23.7 million in 2019, down 61% from USD60.5 million in 2018 and 57% down from USD54.5 million in 2017. The Packer

    By Caroline Calder News
  • 16 Jan
    US – Energy drinks making monster profits

    US – Energy drinks making monster profits

    Shares of energy-drinks expert Monster Beverage have absolutely crushed the market over the last decade, report Nasdaq. The stock returned a whopping 896% since the end of 2009. Over the last two years, however, Monster’s shares traded almost exactly sideways, with a total gain of 1%.

    The company then known as Hansen Natural posted full-year net sales of USD1.14 billion in 2009. Energy drinks were still a relatively new and exciting concept, and the company’s flagship brand of Monster Energy was stealing market share from arch-rival Red Bull on a regular basis. A decade later, Monster has changed its name and replaced a ramshackle distribution system with a global partnership with Coca-Cola. As part of that deal, Monster now manages all of Coke’s energy-drink products, while the soft-drink giant took over Hansen’s non-energized juice and fruit-flavoured products. Coca-Cola also holds a 17% ownership stake in Monster Beverage.

    Now ‘workout’ is the new rage in energy drinks

    A brand new category of energy drinks entered the market in a big way last year, led by the workout-boosting drink known as Bang Energy from privately held company Vital Pharmaceuticals. Monster was quick to launch its own workout-energy drink, Reign Total Body Fuel. Vital Pharma and Monster have been slinging lawsuits at each other since the spring of 2019, with each company arguing that the other is using unfair business tactics of various forms.

    Meanwhile, Coca-Cola introduced a Coke-branded energy drink in dozens of international markets with plans to extend this new brand into the US next year. Nasdaq

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    By Caroline Calder News
  • 16 Jan
    US – Sun-Rype acquired by Quebec company for USD89.3M

    US – Sun-Rype acquired by Quebec company for USD89.3M

    One of the Okanagan Valley’s largest brands has changed hands in a USD89.3 million agreement. Sun-Rype Products Ltd. was founded in 1946, and produces juices and fruit snacks in Kelowna and the Okanagan Valley. It also operates two other facilities in Washington.

    Lassonde Industries Inc., which is based in Quebec, announced that they have completed the acquisition of Sun-Rype and its two US affiliates from The Jim Pattison Group for USD89.3 million, further to the satisfaction of closing conditions. Lassonde entered an agreement to acquire Sun-Rype back in October, 2019.

    The amount includes USD9.3 million in preliminary working capital adjustments, and as part of the transaction, Lassonde assumed USD21 million in liabilities related to long-term leases for the three facilities. KelownaNow

    By Caroline Calder News