ANUGA – Good Start

By Don Griego on

For the past 34 years in the olive oil business, I have the good fortune of having either SIAL or ANUGA to attend JUST before the start of the new crop. It provides valuable insight and commentary from many different suppliers from a variety of countries. The chance to meet with good friends, and develop new relationships is invaluable. The timing is such that the information exchanged is a great start and indication on how the crop year will start.

Export and Consumption figures from Spain were over 80,000 tons in September, which is lower than normal, yet still a fairly decent quantity being moved. Most of the Spanish suppliers seem to be confident that the crop will be between 1.1 and 1.4 million tons. It had been raining in Spain while I was in Germany last weekend. Rain has continued, which may delay harvest in Spain. Generally speaking, the conversations were hopeful towards an orderly market. Spot and November pricing are going to a more difficult conversation. The new crop worldwide figures will be less than 3 million tons. That means exporters who have stocks of oil, still have a somewhat valuable commodity in hand.

Tunisia’s crop, although much smaller (about 50%), will not be harvested until mid to late November. So, Spanish exporters with stocks still hold an advantage for a short period of time. Greece has some inventory and will have a decent crop; Italy will have more available oil this season. Turkey will have exportable quantities as well. There will be options for buyers this season, a much different scenario than last crop.

As last newsletter stated, early demand will be the most important aspect of pricing until the crop gets underway. Statistically speaking, the majority of the crop is harvested in December and January. About 70% is harvested in these two months except for the crop year of 2013/2014 where the picking lasted into April in a pretty significant way.

We are formulating strategies for individual buyers, if you are interested in having that conversation; please do not hesitate to contact us.

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 Safe Quality Foods Program     (SQF).    SQF Symbol

Ultimately, customer satisfaction is paramount. The entire AMD group is fully committed to elevating the distribution of bulk oils across the entire process.

WORLDWIDE FINANCIAL CRISIS

Other than the ongoing refugee crisis and the awful war torn Syria, things seem to be relatively quiet. Euro is trading in small windows, an did NOT approach the parity with the dollar that many traders had speculated.

CALIFORNIA OLIVE OIL COMMISSION / AUSTRALIAN OLIVE OIL ASSOCIATION

The California association released their annual crop figures. They are expecting 4,000,000 gallons of olive oil this season, which is over 30 million pounds or 13.8 thousand metric tons of olive oil. Last season California produced 2.4 million gallons – 18 million pounds – 8.2 thousand metric tons. So an increase of 50% over the previous crop year.

COSTING BY PRODUCT – BUYING RECOMMENDATION

If you are ready to discuss first quarter pricing, we are getting very close to the time that you might want to do that. If one needs oil before the New Year, we can accommodate requirements and come up with some innovated solutions to spot pricing.

Also it is important to note, that weather will continue to play a key role in development of this crop. Early frost will change things instantly. Too much rain will lead to issues; a good amount of rain will lead to a better crop in 2017.

EXTRA VIRGIN:  Prices have softened as described for prompt over the August HIGH. Prices for November are already quoting lower than October. Pricing for December shipment will be available very soon. We expect dips to occur; we have to be ready to buy on the dips in pricing, specifically the last dip if at all possible.

REFINED / PURE:  I am having issues determining if there will be MORE lampante oil in the market place or more EV. It is quite early to determine in full what the quantities will be on each item. Normally there is a decent spread between refined prices and extra virgin prices. IF the available lampante is not sufficient, we may not see a great price differential between EV and refined olive oil. More on this topic next newsletter.

POMACE:  Market is on the soft side. New crop pricing is normally available at the end of the harvest – come end February. Raw material is available on crude pomace and this may be a sloppy market until the other item price levels are established.

***** 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

Last 30 days, trading in narrow lanes. Certainly nowhere near parity as some had suggested.

HIGH = 1.1437        LOW = 1.1145        AVERAGE = 1.1267