Market Report September 2019
Lard production follows a very similar story to that of last month. The issues with African Swine Fever in China are still ongoing and, as such, demands on the market are also ongoing. With 20% of the Chinese pig population decimated (roughly 10% of world pig population) it is easy to understand why prices have increased so dramatically. However, it does seem suppliers are trying to keep prices competitive against vegetable oil alternatives to prevent those who can switch from doing so. As such, prices are expected to remain firm for the foreseeable future with increases being slight, as long as the problem does not escalate further.
Sugar prices are expected to increase dramatically at the start of the 19/20 season. European sugar yield is down 6.5% on the five-year average and with Sudzucker (one of Europe’s largest sugar producers) set to reduce their production by 700,000 tonnes next year, European sugar prices are set to increase against a backdrop of high demand.
Potato Flake & Dice
Dried potato is a variable market at the moment; the hot, dry weather has strengthened market prices in Europe, in case of a drought. However, there are concerns that Brexit may prevent exports and reduce demand on British crop from Europe. On a more positive note, prices on the Belgian new crop were revealed recently and were down from the highs of last year; it seems that if drought stays away then prices should remain below those of last year.
There is currently little to no availability of poppy seeds and there will be no carryover into the new crop. With the new season not starting until October, we can expect to see prices increase in the short term. Harvests are currently underway in many countries and the poor crop is also pushing prices higher.
Raw material is very tight and California has sold all its crop for the year. With new crop not arriving in the UK until the end of November we can expect prices to remain steady for the short term. When the new crop arrives, we can expect some decreases but not a drastic change.
Stewart Humphrey, Purchasing Director
*Information correct as of 12/08/19