· Exports in January were 6,723 tons compared to 8,977 tons last year.
· Year to date exports are 50,035 tons compared to 58,780 tons last year, a decrease of 15 %
Exports were in line with expectations, and need to continue to shrink to balance the 30% reduction in supply this year.
Prices in Lira for size 4 and smaller continue to edge higher as supply is tightening particularly for small and medium sized fruit. The differential between sized has shrunk to around $50 per ton per size.
The Lira continues to strengthen. It has gained 16% since the hike in interest rates at the beginning of November resulting in a $500 per ton price increase in currency alone. The price of size 4 is approaching $4,000 per ton which may prove to be a ceiling, depending on the blossom set in March and April, though we believe some packers to be short and if they fail to deliver cheaper contracts this could push prices higher.
2021 Outlook
January temperatures were normal with plenty of cold nights. Current weather and medium term forecasts are for temperatures 3 to 5 degrees above historic norms, similar to what we have seen for the past few years in late winter, and which may result in a early bloom and frost damage. Most in the industry now believe that this is the new normal (global warming) and that the Malatya varieties of apricot trees are no longer suited to the climate. Frost has damage the crop 7 out of the past 10 years and increasingly serious fungal diseased is destroying whole orchards.
Small farm sizes and a lack of mechanization does also not fit well with an increasingly developed nation. The youth no longer want to take over farms with hard manual work for uncertain returns, they prefer to move to the cities in search of an easier life.
TMO and Price Trends
It is expected that the recent start of government intervention via the TMO to support prices will make apricot farming more attractive in the long term. The TMO were unable to make significant purchases this year due to the short supply, however they were completely successful in resetting the price simply by announcing a support level without actually having to buy much. The expansion of their still mostly empty warehouses for next season shows that the government is committed to their stated goals, and in our opinion they are likely to succeed to keep prices around current levels, it would take a truly gigantic crop to challenge their capacity to support the farmers.
