Aggressive pricing as Greece returns to canned peach fray
CANNED peach prices from Greece, where limited volumes remain after last
year's disastrous harvest, have fallen 9-13% on those secured at the end of the
pack. Moreover, the return to a good-sized pack in the forthcoming season
means the industry is targeting competitively low prices.
"There have been some rumours of ridiculously low prices but there has only
been a certain movement down, " explained one prominent packer in Greece.
Prices for what remains are put at .14.00-14.50/carton standard grade 24/1kg
fob northern Greece, compared with .16.00-17.00/carton at the end of last
"It is not a surprise that the prices are lower, " said another major Greek
processor. "We are nearing the season and if a packer feels he has stocks then
it is the time to sell."
Contracts are known to have been made with German importers at these lower
prices but Greek officials say that each new order is for five containers or less.
Indeed, most importers have covered until the new season so trading will
remain low. Call-offs on contracts already signed, which Greek packers in
January complained were not running fast enough, have apparently improved,
particularly among larger importers.
Attention is moving to the forthcoming crop and just exactly how much Greece
Speaking at the FOODNEWS Processed Foods Forum (FPFF) in Lisbon last
week, Costas Apostolou of the Greek canners association, EKE, said: "The first
point is that weather conditions until now have been ideal.
"This allows us to estimate that production will be in regular levels, which in any
case by far exceeds 500 000 tonnes of peaches. The question is, which part of
this quantity will be used for canning?"
Prior to the forum, reports from Greece were that the industry was looking to
pack 320 000-360 000 tonnes, with the latter level being 3 000 tonnes above
1999's record pack.
The US Department of Agriculture (USDA) has since made an estimate of 320
000 tonnes for canning from a total clingstone harvest of 600 000 tonnes.
Officials at EKE have become even more conservative, telling FOODNEWS this
week: "We are preparing the factories and how much we pack will depend on
the market conditions. We are looking at 300 000 tonnes of raw material.
There isn't an intention to get a record and I cannot say that we will pass the
357 000 tonnes, for this year at least."
Total Greek capacity
Speaking at the FPFF, Apostolou stressed: "I'm going to give you an approach:
the capacity of the industry in Greece is up to 25 million cartons but there is no
thought to use this capacity in its entirety."
Apostolou also spoke of the importance of relating his industry's production to
global stocks after many competitors upped output last year.
Any assessment of global stocks is difficult, but leading sources made the
The most important stocks are held in Spain where shipments are said to have
been going slowly.
Local estimates are that as of 15 April, 3.3 million cartons (from a production of
10.6 million cartons) remain.
However, a leading canner in Murcia was confident in saying that "we will have
500 000 cartons left at the start of the next season" which would be slightly
lower than the normal position of 700 000 cartons.
Officials at EKE in Greece say that stocks (almost all standard grade 24/1kg)
are at 1.5-1.8 million cartons, low compared to previous years, but surprisingly
high considering Greece's low output (though Greece imported significant
volumes from Argentina and elsewhere).
"In Argentina, production of canned peaches was approximately 3.2 million
cartons, while exports are expected to be 1.7 million cartons, " said Argentina's
"Around 35% of the exports are ours, which I can guarantee. As for the rest, I
would be pleased if they were all shipped. My tip is that some of these peaches
(maybe 20%) might stay in Argentina."
In Chile, one respected source said: "Before the season we had 100 000
cartons of stock. The pack, which ended 1 January, was 2.5-2.7 million cases.
Until the end of February we had exported 135 000 cases so the maximum I
believe we could have sold by the end of March is 250 000 cases. So on 30
March we have around two million cases."
These are all effectively sold and call-offs are going well. However, Chilean
processors fear low prices from the northern hemisphere could cause
customers to cut contracts.
California's ending inventory is projected at 2.9 million cartons, slightly lower
than in previous years.
Stock positions have not been officially calculated in South Africa since 1991,
but an industry spokesperson said that unsold stocks were minimal and
shipments were going steadily.
Following the massive increase in Chinese exports of canned peaches in 2003,
it can be reasonably assumed there are few, if any, stocks left there.
Greece's new season prices will be released in June but competitors and
buyers alike have been trying to determine what Greek packers' intentions on
price are. Asked whether .12.00-13.00/carton standard grade 24/1kg fob
northern Greece, would be a reasonable starting point, the EKE official said:
"What we have now are euro markets and dollar markets. While prices in the
dollar markets will depend on the currency rates at that time, prices for the euro
markets could be like those you've just mentioned."
He added: "What is very important, however, is that we are yet to understand
what the farmers will ask."
A number of canners confirmed they were aiming at 2000/01 levels.
Some in the Greek industry believe that demand will be boosted next season by
the duty-free status of the new EU member states, the unlikelihood that
European buyers will source from China due to low service and quality levels
and even that the Olympic Games will add 330 000 cartons to the usually
steady Greek domestic consumption of canned peaches (at 400 000 cartons).
Elsewhere, Spain's production is still up in the air following frost in the early
season. Though it was not thought to have taken a toll of the canning peaches,
one Spanish canner said he thought processors would take just 120 000
tonnes, compared with a normal pack of around 160 000 tonnes.
The USDA put last year's cannery intake at a record 175 000 tonnes (from 136
660 tonnes in 2002) but has not made an estimate for the forthcoming pack.
"What we do know is that if we paid ESP60/kg ( .0.36/kg) last year and
ESP37/kg ( .0.22/kg) the year before, we must return to at least ESP40/kg (
.0.24/kg), " said the canner. "This way we can try and produce 140 000 tonnes."
California is due to make its first estimate on this season's cling peach crop in
the first week of May, but favourable weather and a net growing area gain of 1
718 hectares point to a large crop.
Based on a five-year yield, a preliminary estimate is for record deliveries of 524
000 tonnes, up from 471 000 tonnes last year.
Food News, 30 de abril de 2004