Turkish Sultanas Market Update: August 2024
2023 Crop Overview
As the 2023 crop season draws to a close, the Turkish Sultanas market has experienced notable fluctuations, primarily influenced by the alcohol sector. Raw material prices initially surged to 120-125 TL (USD 3,600 – 3,800) but later declined to 105 TL (USD 3,200) in July. The market now has very limited raw material available, and it is anticipated that the new crop season will begin with virtually no carry-over. Effectively, the 2023 crop has been psychologically concluded, and this will be fully realized by the end of August. Market participants are now focused on the developments of the new crop, with the harvest expected to begin within 10-15 days.
Currently, Type 9 raw material is priced at approximately 105 TL per kg (USD 3.18/kg with an exchange rate of 33 TL/USD), equating to around USD 3,700 per ton FOB. The scarcity of raw materials and the impact of high prices have led to a 50% reduction in weekly export volumes compared to last year, resulting in an approximate 20% drop in total exports. The season is projected to conclude with a total export volume of 205,000 to 210,000 tons.
According to the Aegean Exporters Union Report dated July 27, 2024, the following comparisons can be made between the last two seasons:
- 2023 Crop Exports (Sept 1, 2023 - July 27, 2024): 198,193 tons at an average price of USD 2,327/ton
- 2022 Crop Exports (Sept 1, 2022 - July 27, 2023): 235,487 tons at an average price of USD 1,696/ton
This indicates a reduction of 37,000 tons compared to the 2022 crop but an increase of 4,000 tons compared to the 2021 crop.
2023 Crop Numbers in Detail
- Estimated Total Quantity: 190,000 - 200,000 tons
- Carry-over from 2022 Crop: 50,000 - 60,000 tons
- Registered Quantity (as of July 31, 2024): 187,000 tons
- Exported Quantity (as of July 27, 2024): 198,000 tons
- Estimated Domestic Consumption: 40,000 - 50,000 tons
- Estimated Remaining Quantity with Farmers and Traders: 0 tons
Outlook for the 2024 Crop
The outlook for the 2024 crop is mixed. Overall, the number of bunches in the vineyards is lower than usual, and some regions have suffered hail damage, as happens each year. However, the warm weather and minimal rainfall compared to last year have generally been favorable for vineyard development. The sugar content in grapes is reported to be higher than at the same time last season, which is expected to positively impact the total crop yield.
Recently, the official estimate for the new crop was announced at 225,000 tons. However, based on observations and analysis, it is estimated that the crop size could be closer to 250,000 tons. The early arrival of the crop and the higher sugar content due to extreme heat may boost the final crop size slightly, though it still appears the yield will be smaller than usual and similar in quantity to the 2023 crop. If Turkey produces less than 300,000 tons, this could heighten price sensitivity both domestically and in the global market.
The primary concern for the upcoming season will be pricing. If the official estimate holds, the crop might not suffice to meet market demand, making it unlikely to see a significant price drop over the long term. However, if the crop size reaches around 250,000 tons and export volumes remain consistent with the current crop (205,000 to 210,000 tons), supply may balance out. Unlike in previous years, it is anticipated that TARİŞ, rather than TMO, will play a more active role in setting raw material prices. Notably, TARİŞ has already announced an advance price of 100 TL (USD 3.03/kg) for Type 7 for the new season.
Given this announcement, it's unlikely that market prices will decrease in the short term. Raw material prices are expected to hover around 100 TL during the harvest period, and many exporters have already adjusted their new product price offers accordingly, with prices around USD 3,550-3,600 FOB. In the longer term, prices in the Turkish market may decrease, depending on Turkey's export performance and competition from other sources.
Additional Points on the 2024 Crop
- Harvest Timeline: Expected to run from mid-August through the end of September.
- Quality Outlook: Expected to be good, assuming no adverse weather during harvest.
- Sugar Content: Higher sugar content and denser berries could lead to a larger crop.
- Berry Size: Berries on bunches are larger than in previous seasons, potentially limiting the availability of medium and small sizes.
This comprehensive overview highlights the current state and future prospects of the Turkish Sultanas market as the transition from the 2023 crop to the 2024 crop unfolds. The market remains closely watched, with prices and yields playing critical roles in the coming season.
