| 30 June 2005 | We are still early in the harvest year, but have the following preliminary comments to the expected harvest and market situation. |
|
| Production | The total production
in the EU in the coming harvest period is expected to be normal and to
meet the standard quota. It is still too early to say anything real about
the expected harvest since this still is more than 2 months away. |
| Carry over stocks | All the EU manufacturers
are expected to have a normal carry over stock from this harvest year
(2004) to the next. |
| Currencies | The price development
especially in the overseas markets is dependent on the rate of exchange
USD/EURO. The USD has been very weak over the last 2 years, but has strengthened
lately and if this strengthening continues the competitiveness of European
agricultural products including potato starch will be better positioned. |
| Other key factors | There is much
pressure on the industry in terms of earnings and most manufacturers operate
with very tight margins coming out of 2004/2005. Therefore price increases
need to be seen in order for the industry to remain healthy. Shipping rates have an upward tendency due to the increase in oil prices (as usual), as well as continuing consolidation of the shipping industry (less competition = higher pricing). Export subsidies are currently still on a high level – so for business up until the new campaign this will ensure pricing on a competitive level. |
| Tapioca | Tapioca prices
are currently very high since we are off-season until Sept/Oct. Pricing
has remained high and in reality no volume is available due to shortage
of roots. In fact the delay in harvesting (and consequently planting,
which is done at the same time) will also delay the new harvest. Since
demand for tapioca chips for feed and alcohol production in China is growing
and new trade arrangements between Thailand/China has made Thai agricultural
products more competitive in China this will also influence the prices
upward. |
| Overall conclusion | We do not foresee
big changes in the supply and demand situation. A normal harvest and a
normal carry over situation should indicate a steady situation. However a still uncertain tapioca supply and a change in the forecasts for potatoes would change the situation. |
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