Rain – All Roads lead to Spain
Sorry for the delay in the newsletter. In November we discussed a DIP in pricing. We certainly saw a DIP two weeks ago, and we are currently in the midst of a RUN on pricing in the market. It started late last week. We had thought that the market prices would start at a level to spur purchases and rise as the demand was sustained and growing. With the holidays right around the corner buyers are covering their prompt shipment needs. Hopefully you have covered January and February requirements.
The real question is will the market DIP again. It has been my strong belief that since not many suppliers have offered product for later shipment. Buyers as price started to rise, will most likely retreat from major purchase decisions deep into the second quarter at these elevated price levels. We are holding to our prediction about another DIP. I think we have to adjust the level of DIP. We were certainly talking about the prices going lower than the starting cost; unfortunately we do not think that is such a certainty any longer.
Without RAIN in Spain, it will make this prediction a difficult task. As we have said, the rain will only slightly effect this year’s harvest. It remains a psychological element that is a constant in the conversation about pricing. I am not a horticultural expert by any means, we do know that the rain during the actual picking will be a good thing, and long periods of drought is not good. Here’s to some decent rain in the next two weeks. That is really all we want for Christmas.
We would like to take a moment to say THANKS to all our loyal customers. You will read our MISSION STATEMENT below this paragraph. This year our staff has truly tried to live our mission statement. We have worked extremely hard to be the PLACE to source your industrial olive oil requirements. Sales does not always tell the whole story of one’s success. This year our sales will top 100 MILLION Dollars for the first time. The company is extremely lucky to have a very special customer base. In 2016 we will continue to strive to be a “buyer’s sanctuary”. Thank you all for your support.
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).
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
CALIFORNIA OLIVE OIL COMMISSION / AUSTRALIAN OLIVE OIL ASSOCIATION
COSTING BY PRODUCT – BUYING RECOMMENDATION
EXTRA VIRGIN: As we write, it would not be wise to try and confirm business for any shipment period. Prices have escalated much higher and quicker than anyone thought. The pesky rain issue seems to have accelerated the market to levels that will slow purchasing. One has to be ready to move once the costs start moving back down… With Rain it will be on quicker side. Unfortunately there is no rain scheduled for the next 10 days in the important growing regions.
REFINED / PURE: The refined is following very closely the extra virgin trends. The unique aspect is that the price is very close to the extra virgin level – more so then in previous history. Same recommendation.
POMACE: Interesting market. Pomace usually follows the costing trends of the other olive oil category. It is not currently, therefore, one should look closely at the levels, and understand eventually the price levels will align more with the extra virgin/refined categories. Not a bad time to buy pomace oil for first half of 2016.
***** 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