Heading Into New Crop
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Summer is almost over, although the European industries’ holiday break is finished. Now comes the time to weigh the amount of oil in stock – against the possibilities of the new crop estimated production. This will be an individual producer’s decision on how to move forward with current stock. It is almost certain that worldwide crop next year will be better or at least equal to the 2018 season production. Spain’s forecasted harvest appears as we write this to be greater than last season; Greece looks to higher as well. Tunisia and Turkey are not expected to exceed last year’s levels; however, the exportable quantities will be at good levels. An important shortage will occur in Italy. That complicates things in that Italian brands become difficult competitors to purchase oil against on the world market. Italian brands still have a good following. The volumes they purchase outside Italy are significant, in most cases, the purchase is done collectively in third countries and Spain. This process usually pushes the entire market upward and can cause temporary chaos in the market place.
In terms of the current market, pockets of suppliers must balance inventory and the need for cash before new crop starts showing up. Rumors of bad weather in Jaen is making the market nervous. We will discuss current market pricing in buying recommendations. SIAL is October 21-24th. This, as usual, will be a vital time to get new market information collectively. In meeting with a vast array of suppliers from different countries, even different regions, gives us a broad view of issues and forecasts moving into the physical harvest. We will be sending daily updates on our findings from the show each day. Please let us know if you would like to be included in the nightly email on Sunday and Monday.
WATCH FOR RAIN IN SPAIN DURING END SEPTEMBER TILL NEW CROP.
Mission Statement
At AMD Oil Sales LLC, we take pride in being a “buyer’s sanctuary.” From start to finish AMD ensures that the needs of our customer are not just met, but fully recognized and exceeded in a seamless fashion.
AMD provides a stress-free environment for quick and efficient communication – all supported by proven supply chain integrity and the latest relevant market information. With that knowledge, AMD is able to accurately forecast and assist our customers in making prudent and educated purchase decisions. To ensure this reputable experience even further, AMD is also backed by a certification from the British Retail Consortium (BRC). 
Ultimately, customer satisfaction is paramount. The entire AMD Team is fully committed to elevating the distribution of bulk oils across the entire process.
Worldwide Financial News
Trade Tariffs dominate the economic news for the business world. Trying not to be political. Just trying to understand the end game here. This is not a game of Texas Hold’em. Going ALL IN trying to bluff your competition into tapping out. Reasonable people can argue that duties on US exports to certain markets on certain items can be unfair. One would hope we can make exports more plentiful – creating more opportunities for employment. Balance that with import duties on products that put US jobs at risk. This would and is not an easy process and very time consuming to get this equation more balanced. We are just having a hard time understanding GOING ALL IN, will get us to the correct place. Additionally, in the process – how much is lost, how many jobs, the cost of the bail outs, the companies that will not survive this trade war. Asking what’s the END GAME is not too much for serious businesses to ask the Administration.
North American Olive Oil Association / California Olive Oil Producers
Productive Conversation, continues with the Representatives from California. The process is to find topics that all can agree on and have respectful discussions on issues that are more complex. If nothing else, the direct conversations have led to a better understanding of the two industries’ issues. Do not know the results, however, it was very clear the industry was heading in wrong direction without these conversations.
Costing By Product – Buying Recommendation
We wanted to put a caveat to these recommendations. Many factors are very individualized to a company’s long and short terms goals / sales / projections / budgets. These recommendations are our best educated guess on where we see the market over the time frame discussed here.
EXTRA VIRGIN:
Very dangerous time to buy EV, to get oil here in 45 days as new crop is getting underway. Of course, new crop will not be in US until minimally Mid/End November. However, carrying too much inventory / unsold positions is not your ideal place to be. Buy as your requirements and lead time allow.
REFINED / PURE:
Very similar to the EV market yet compounded by the availability of Turkish refined which is available at better cost levels. One must be careful about late crop third country oils – yet refined oil is less affected by end of the year quality issues.
POMACE:
Much different market than the above. Refineries have capacity, raw material is available. Sales seem to be lagging. Another recommendation to buy as needed, however for different reasons than the other two categories.
***** All these suggestions are based on a stable Euro ***** we have instruments in place to keep the currency stable with the flexibility to take advantage of a stronger dollar.
Currency Facts – Euro Update
Euro continues to be as chaotic and unpredictable as our new trade policies. Obviously there has been a weakening of the dollar which in theory should help imports. That would be if your items are not on the Tariff list. Olive oil for now, is NOT on the list of items that are impacted. The stronger dollar has helped bring olive oil prices down. If this trend continues, new crop landed price levels will be very attractive for US Buyers, coupled with good size worldwide production. We should really have some attractive levels. We hope we did not jinx the exchange rate.
Euro continues to be as chaotic and unpredictable as our new trade policies. Obviously there has been a weakening of the dollar which in theory should help imports. That would be if your items are not on the Tariff list. Olive oil for now, is NOT on the list of items that are impacted. The stronger dollar has helped bring olive oil prices down. If this trend continues, new crop landed price levels will be very attractive for US Buyers, coupled with good size worldwide production. We should really have some attractive levels. We hope we did not jinx the exchange rate.
Since July 23rd Last Report (30 days before July 23rd)
AVERAGE 1.156 1.17
HIGH 1.169 1.196
LOW 1.133 1.156
UPDATE – STARTING in 2019, we will be changing the DISTRIBUTION LIST REQUIREMENTS. Please contact your salesman for information on next year’s enrollment requirements.