Fruit



Pineapple is the big exception to the year-on-year drop in canned fruit sales. The theory is that canned sales are buoyant because pineapple in its natural state is far from consumer-friendly. So a statement from the Thai Food Processors Association warning of a possible 50% drop in production this year comes as bad news to retailers.

"For some years we have seen little promotional activity in fruit SKUs other than Del Monte, so a potential shortage of the only real growth product will be a disaster," one said.

Low prices over the past two years have forced farmers to leave crops in the field uncut, and pineapple plantation is being converted to sugar cane to make bioethanol for fuel. A serious drought forecast by the Thai Weather Bureau is forcing the TFPA to downgrade crop forecasts to 1.9 million tonnes. Last year 2.5 million tonnes were harvested. Raw material costs have already risen 60% and are expected to go higher.



Beef



Farmers in Brazil have the opposite problem to the Thais, as heavy rainfall has encouraged them to leave cattle on pastures to gain weight at no extra cost. Lush conditions are unusual at this time of the year.

As a result, slaughterhouses are on a reduced kill, keeping beef prices high at a time of year associated with falling prices. Corned beef producers are asking for higher prices but UK importers say this may be short-lived when slaughter volumes pick up again.

More worrying in the long term is the switch from cattle to crops, where returns are more stable and margins higher. Again, crops as fuel alternatives are proving a threat to long-term cattle farming prospects.

World demand for Brazilian beef continues to rise, and lead times for new orders of processed beef have doubled from six to 12 weeks, according to sources in Sao Paulo. Over the past four years, cattle prices have doubled with a peak last year of $30 per arroba. It stands today at $27.



Salmon



Canada is set to lose its monopoly on supplies of skinless and boneless salmon as the Americans throw their hats into the ring. At least four of the largest Alaskan processors have announced plans to install similar lines in their plants. UK importers are divided in their opinions as to the viability of the move. "It's a very specialised, non-promoted product," said one, adding that the competition is likely to reduce the premium currently achieved at retail.

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