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CAROB MARKET REPORT

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CAROB MARKET REPORT As of September 13 2004 Carob Market Report. GLOBAL (highlights) We are facing a short crop campaign in most producing countries with the ... – PowerPoint PPT presentation

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Title: CAROB MARKET REPORT


1
CAROB MARKET REPORT
  • As of September 13 2004

2
Carob Market Report. GLOBAL(highlights)
  • We are facing a short crop campaign in most
    producing countries with the exception of Spain,
    Italy and Algeria, where volumes are rather
    normal.
  • One of the two main producing countries Morocco,
    is for the first time in years, not supplying
    seeds at the beginning of campaign to importing
    countries.
  • In some countries speculation deposits have been
    consumed up and traders are trying to acquire
    again some stocks in top of the normal needs of
    LBG producers.
  • In top of this, some LBG producers have started
    actual campaign without significant stock
    volumes, when the usual level is of 3 or 4 months
    and no forward deals were done this year
  • Due to this lack of stock building, speculators
    are trying to buy seeds from kibblers to take out
    product of the market ant try to sell later at a
    higher price, what increase speculation and
    potential risk of price increases..
  • AS A SUMMARY WE CAN SAY, IS A TOUGH START OF
    CAMPAIGN, WHERE THE ADVICE WOULD BE TO COVER
    STRATEGIC CUSTOMER ORDERS AS SOON AS POSSIBLE, AS
    MARKET MAY BECOME EVEN TOUGHER, WHEN MAIN LBG
    PRODUCERS COME TO THE MARKET.

3
Carob Market Report. SPAIN
  • In Spain all regions are showing good crop
    volumes. Nevertheless, there is a short term poor
    availability of seeds due to late rains, so
    Tarragona and Mallorca will start supplying
    middle October at the soonest and Valencia by the
    end of September.
  • The actual coverage of local LBG producers in
    terms of stocks vs potential orders is considered
    to be rather short as compared to other
    campaigns, due mainly to the unexpected end of
    previous campaign prices and proximity of next
    crop reported as a good one.
  • Also due to this, they are resisting to buy at
    high prices (2,30 eur/kg) in actual campaign,
    thinking situation in Morocco will be not so bad.
    At the same time, they continue as previous
    campaigns TRYING TO BUY at their respective loyal
    suppliers in Spain at prices ranging between 2,10
    and 2,15, when availability of seeds be possible,
    but I am preventing them to sell to those levels
    by informing punctually about latest prices paid
    in the market, just to avoid these producers take
    a competitive advantage.
  • The actual level of prices for small deals has
    been of 2,20 eur/kg (a maximum of 100 hundred
    tons), 2,30 eur/kg (another 3 or 400 tons) and
    lately 2,40 eur/kg (around 200 tons).
  • What will provoke a change in the prices
    behavior, is when Danisco decides to buy to
    Armengol, that is the only way out in my opinion
    they have to overcome situation and face orders
    that will come very shortly mainly Kraft, Nutraco
    and Brioches Pasquier contracts, that are
    considered strategic customers for Danisco, when
    this happens will be important to know the
    volume, even more than price, because market is
    expectant about their purchasing needs.
  • Another particularity of the market right now is
    speculator action, I have been contacted by two
    kibblers trying to buy first at 2,30 eur/kg and
    lately at 2,40 eur/kg basis, for later sales at
    higher price and volume was up to 200 tons.
  • LOCAL STRATEGY SUGGESTED Buy in Spain at levels
    of 2,30-2,40 and follow the market, as other
    markets are supposed to come to Spain to buy.
    Morocco, Portugal, Italy and Turkey, are almost
    blocked and Spain being the only country with
    availability at theoretical reasonable prices,
    for the time being.

4
Carob Market Report.MOROCCO
  • The other main producing market Morocco, is for
    the first time in years, not exporting seeds
    neither signing long term export contracts at the
    beginning of campaign because of high prices, as
    explained before. As it is known, under these
    conditions market is starting with high prices of
    pods and later these come down if demand is
    normal and crop sufficient.
  • At the same time, because having exhausted
    traders pods deposits related to several previous
    years, wild speculation mainly from merchants is
    taking place, in spite of a relatively not to bad
    local crop, buying pods and not selling them with
    fluidity and reasonable margins.
  • This makes buying of pods and consequent seeds
    availability, almost impossible, as more price
    is offered less pods available will exist, so
    what is advised is not to try to buy and let
    market to calm.
  • Prices for pods are reported to be in the range
    of 6 - 6,50 DH per kg, with yields that seem to
    be lower than normal, mainly in the south where
    traditionally were between 20 and 26., prices
    for seeds do not exist at this point in time,
    there is no offer, and kibblers ask to wait for
    market slow down.
  • Fewer and smaller long term contracts have been
    done this year, but unfortunately will not be
    honoured or postponed some of them, due to the
    big difference between expected prices and real
    ones, this was a very good stabilizing tool in
    the market, that temporarily has been lost.
  • STRATEGY SUGGESTED Follow kibbler activity to
    detect important movements and react accordingly,
    on seeds it is recommended to buy in Spain mainly
    where may be some availability at reasonable
    prices.

5
Carob Market Report.ITALY
  • Another country presenting a rather normal
    situation is Italy with 2500-3000 tons.
    Traditionally has been high speculative market,
    not easily exporting seeds at market normal
    prices.
  • Today with quick communications information is
    running very fast and is at all impossible
    isolate local good crop environments out of the
    rest of the market. Mainly Armengol and other
    people are intensively launching messages of
    short crops all over and this obviously has an
    effect on the local sellers sooner or later, even
    with a relatively good crop.
  • Italy started with a price for seeds of 2,60 eur
    / kg and now it is being increased the price by
    at least 5 .
  • So, Italy is almost blocked for releasing carob
    seeds even locally, also we do not have to forget
    that after Spain is the second importer from
    Morocco (more than 2000 tons in last campaign)
    and clearly what happens in that country takes a
    strong influence in this market.
  • STRATEGY SUGGESTED.

6
Carob Market Report. PORTUGAL
  • In Portugal situation is even worse, as compared
    to Italy, with a crop that most of the local
    players and myself confirms is of maximum 60 of
    normal, in spite of desperate messages of Mr
    Caetano declaring to everybody that crop is
    normal (around 4000-4500 tons).
  • Prices have been set by kibblers at 2,65 eur / kg
    ex work as a minimum price to sell, being LBG
    producers announcing to pay maximum 2,50 eur /
    kg, the market is obviously also blocked for
    seeds releasing.
  • Pods yield has been of low 9 instead of
    traditional 10-11, thus reflecting and
    confirming low crop and potential low yield also
    in seeds.
  • STRATEGY SUGGESTED If prices for the seeds are
    not comparatively competitive, not to buy in this
    market for the time being.

7
Carob Market Report.TURKEY
  • Turkey is also a problematic country due to the
    extreme cold conditions during last winter,
    mainly in Antalya area where for several nights
    temperatures reached below - 3º C.
  • In the country exists strong competition in
    buying pods because of the short crop,
    approximately 50 of a normal one, as reported by
    three main local kibblers, prices for pods were
    of 0,30 cents of euro per kg for yields below 9.
  • Under these conditions, seeds prices are expected
    to be high and somewhat out of competition with
    Spain as announced by a main local player. For
    the time being there is not yet product available
    until kibbled, this will take place hopefully not
    before the end of September for the very first
    containers.
  • STRATEGY SUGGESTED Follow the local market and
    detect potential opportunities when available to
    buy spot deals.

8
Carob Market Report.GREECE
  • Greece is also announcing a short crop but here
    still is not possible to know prices both for the
    pods and seeds.
  • One of the main kibblers in the country,
    announced that seeds availability will take place
    by middle of October at the soonest.
  • STRATEGY SUGGESTED Follow this local market
    and be aware of potential spot deals
    opportunities.

9
Carob Market Report.ALGERIA
  • Algeria is a special country dominated by one
    very important local kibbler. This kibbler since
    many years ago is selling its whole production to
    Danisco.
  • This year crop is better than last year, with a
    potential volume of around 800 tons of seeds, of
    which this main kibbler sold already a contract
    of 500 tons to Danisco at a price supposed to be
    around 2,20 eur / kg.
  • I convinced this kibbler by the end of October
    when he will deeply know the volume he will
    avail, to offer me some containers in excess of
    the committed volume for export.
  • I do not have information available of local
    price for the pods.
  • STRATEGY SUGGESTED Try to quote when these
    containers be offered some interesting price
    competing with Danisco, and in agreement with the
    quality of the seeds.

10
Carob Market Report. CYPRUS
  • Cyprus is presenting a volume of crop rather
    normal, around 800 tons of seeds, the market is
    dominated by the 2 main cooperatives, on in the
    north part of the country (turkish) and the other
    in the grecian part.
  • The quality of these seeds is the lowest both in
    terms of viscosity and gum yield, also has been
    reported lower gel strength as compared to other
    gums, so even for petfood production is of lower
    quality.
  • STRATEGY SUGGESTED Not to buy, seeds not
    interesting for medium / high viscosity products.

11
Carob Market Report. OTHER
  • Other countries are Tunisia, Libano and Malta
    mainly, with relatively very low volume
    productions.
  • STRATEGY SUGGESTED Quality in these markets is
    very unpredictable, I recommend not to buy in
    these markets.
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