The Turkish sultana market has weakened in the past month, with the Mintec Benchmark Price for standard type 9 Turkish sultanas delivered CIF EU falling by 8% in the four-week period to 30th September, to USD 1,825/tonne.
Prior to that, the market was firming up throughout August and the beginning of September, with prices up 6% month-on-month on 9th September, peaking at USD 2,022/tonne, driven by rising domestic prices in Turkey, after the Turkish Grain Board (TMO) announced a higher purchasing price for the 2020/21 crop. The TMO has increased the price from TRY 10/kg in 2019/20 to TRY 12.50/kg, an uplift of 25% for type 9 sultanas. In addition, the TMO has committed to buying a minimum of 50,000 tonnes of sultanas this year.
The agency, often accompanied by Taris (the largest cooperative in Turkey), frequently intervene in the market to lift sultana prices in order to support Turkish sultana farmers. Both organisations usually start releasing their stocks as the season progresses. During the previous season, the TMO started releasing its inventories in April, selling type 9 sultanas at TRY 10.50/kg.
The TMO’s intervention was the main market driver in August’s bullish run, along with estimates of a shorter crop in Turkey this year; however, it seems now that the market has adopted a more bearish sentiment.
The sultana and raisin demand has been tepid. Demand from the foodservice sector has been weak due to the effects of the coronavirus pandemic. The snacking on-the-go segment has also suffered, as consumers have reduced social and outdoor activities. The sale of sultanas and raisins for home baking surged in March and April when economies entered lockdown, but the demand from this category has since returned to normal levels. One category which has experienced a robust boost in demand are morning cereals, as consumers have been shopping less frequently for fresh groceries, and at the same time having more breakfast opportunities when working from home.
The Turkish lira continues to weaken rapidly, reaching (yet another) all-time low of 7.94 against the dollar on 8th October. The lira has been depreciating on a mixture of geopolitical and economic concerns and the weaker currency converts to lower USD-based pricing.
Competitively priced Chinese sultanas have been also weighing on the Turkish pricing. China’s 2020/21 raisin production is anticipated to fall by 20% y-o-y to 160,000 tonnes, according to the United States Department of Agriculture (USDA), following delays to raisin processing caused by COVID-19-related disruptions. However, parts of the industry disagree with the USDA forecast, pointing to ample availability in China (in excess of 200,000 tonnes). This view is supported by the significant discount Chinese exporters are currently marketing their product for. Mintec has been hearing quotes for Chinese sultanas (standard grade, equivalent to Turkish type 9 sultanas) around USD 1,450 – 1,500/tonne delivered CPT Northwest Europe.