Mintec Market Movers report - December 2019

C o p y r i g h t © 2 0 1 9 M i n t e c L i m i t e d 1M I N T E C G L O B A L . C O MM I N T E C G L O B A L . C O M
Market Price Movements
DECEMBER 2019
Top food and commodity price movements impacting Europe, the US and across the globe
FISH & SEAFOOD
Prawns: China lifts import suspensions from
Ecuadorian prawns & Indian prawn market update
FOOD INGREDIENTS
Analysis: Indian sugar prices are becoming more
competitive and dragging global prices downs
FRUIT & VEG
Potato: Weather takes a toll on the US and the EU
potato crops
GRAINS & FEED
China Barley: China’s decision to prolong the anti-
dumping investigation on Australian barley is likely to
pressurise prices
MEAT & POULTRY
Beef: Quarterly Update: Beef Market October 2019
NUTS, SEEDS & DRY FRUIT
Almond: Almond prices strengthen on robust
demand
OILS & OILSEEDS
Soyabean Update: Soyabean prices supported by
recent developments on the US-China trade war
BREXIT INDEX
BFPI: Brexit Food Price Index
PRICE MOVEMENTS
Prices: Current & previous months movements
CHRISTMAS DINNER INDEX
Update: Prices might be key to consumers’ decision on
sticking to the traditional turkey this year
MATERIALS
Oil: Saudi Arabia pushes OPEC to cut oil supplies
BEVERAGES
Coffee Update: Market speculation reverses the
bearish trend in Robusta coffee prices
DAIRY & EGGS
EU SMP: Prices at their highest in more than five years
Food & Commodity

C o p y r i g h t © 2 0 1 9 M i n t e c L i m i t e d 2M I N T E C G L O B A L . C O M
December: Top Commodity Price Movements
This months most significant price movements across the food & associated commodity markets.
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latest news and prices.

November: Top Commodity Price Movements
This months most significant price movements across the food & associated commodity markets.

Christmas Dinner Index: Prices
decision on sticking to the
traditional turkey this year
The Mintec 2019 Christmas Dinner Index
Despite the recent rise in meat prices, the Mintec Christmas Dinner Index
shows that a typical Christmas dinner will be…..
See the full report for free with no
sign-up here
https://www.mintecglobal.com/blog/christmas-dinner-index-
2019

Materials: Saudi Arabia
pushes OPEC to cut oil
supplies
Saudi Arabia is pushing the Organization of the Petroleum Exporting
Countries (OPEC) to reduce crude oil supplies to help Aramco’s Initial Public
Offering (IPO).
Saudi Aramco, the largest Saudi Arabian oil company, launched its IPO on 3rd
November 2019 and is due to go public in December. Saudi Arabia is pushing
OPEC to lower supplies with the aim of bolstering oil prices, which would, in
turn, increase the company’s value to $1.5 trillion while the IPO is launched.
Saudi officials estimate the company to be valued at $2 trillion but it may fall
short due to the uncertainties raised following the recent drone attack in the
Saudi Arabia However, it would be the most significant public offering, as
Aramco is still the world’s most profitable company (ahead of Apple and
Microsoft).
Following the launch of the IPO, OPEC released its World Oil Outlook for 2019,
indicating a decline in production. In December 2018, when OPEC slashed its
oil production by 1.2m barrels a day after an agreement with Russia, the
Mintec crude oil prices increased in Q1 2019 by 10% compared to December
2018. Therefore, if OPEC decides to cut its production further due to the
pressure from Saudi Arabia, prices are likely to rise early next year.
Nevertheless, an estimated increase in the US shale production may push the
market in a different direction.
Furthermore, the Mintec crude oil prices continue to follow a bearish trend
since June 2019 and are down 4% m-o-m in October 2019 on the back of high
market supplies.
Saudi officials estimate the company
to be valued at $2 trillion.

Beverages: Market
speculation reverses the
bearish trend in Robusta
coffee prices
Robusta coffee prices, quoted on the London Intercontinental Exchange (ICE) have
increased by 9% m-o-m, as at 21st November 2019. In the last week of October,
prices were heavily supported by expectations of lower export volumes from
Vietnam, following record-low prices. Furthermore, the recent rebound in the
Brazilian real (compared to the US Dollar) provided additional support to coffee
prices.
From July to October 2019, global Robusta prices were weighed down by the ample
supplies delivered by both South America (Brazil) and Vietnam. Global Robusta
production increased by almost 7% in 2018/19, compared to 2017/18, resulting in
abundant availability and a bearish price trend. Prices were also profoundly
affected by the depreciation of the Brazilian real, boosting exports volume from
South America. Robusta coffee on the ICE was trading at 55.66 US Cent/lbs in mid-
October, the lowest since 2010. According to market participants, the record low
prices are discouraging Vietnamese producers and traders from exporting on the
global market, as farmers are struggling to cover their production costs.
During the eleven months of the 2018/19 marketing year (October-August),
Vietnam’s export increased by 4% y-o-y, reflecting the increase in supply on the
domestic market. As the 2019/20 marketing year just started, the low prices will
possibly further discourage Vietnamese farmers from increasing coffee
plantings and they might also switch to more lucrative crops to gain better
margins. Vietnam currently makes up 40% of the global Robusta supplies. Thus, a
lower 2019/20 crop is likely to reverse the general bearish price trend, seen since
2016.
Robusta prices were weighed down
by the ample supplies

Making sense of
the problem
Food supply from production and distribution to food service
and retail – the world in which you operate - is volatile,
uncertain, complex, and ambiguous. The nature and speed of
change means that your environment is unpredictable putting
constant pressure on margins.
The increasing complexity of supply chains, the choice of
suppliers and the range of new food products means that the
issues your organization faces can easily lead to confusion
and operational errors that threaten your success.
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Dairy & Eggs: EU SMP
prices at their highest in
more than five years
The Mintec price for EU SMP has risen to its highest since September 2014 and
is currently up 50% compared to the same time last year. Since its upturn in
April 2018, the price has increased by 79%.
SMP prices have rallied on the back of good export demand and a shortage of
supply. EU exports of SMP between January and August 2019 reached 688,000
tonnes, up 29% y-o-y, driven by a robust growth to countries such as China and
Indonesia.
Short-term supply has been squeezed through exhaustion of SMP intervention
stocks in the EU, with only the fresh product available on the market. EU SMP
production between January and September reached just below 1.18m tonnes,
a slight decline of 0.5% y-o-y.
EU exports of SMP between January
and August 2019 reached 688,000
tonnes

Fish & Seafood: China lifts
import suspensions from
Ecuadorian prawns
China lifted its temporary suspensions on prawns imports from the largest
companies in Ecuador (companies that accounts for 50% of Ecuador’s total
prawn export). China first implemented the temporary suspension in mid-
September, on allegations the cargo carried different prawn diseases.
Consequently, according to Ecuador's Camara Nacional de Acuacultura (CNA) -
National Chamber of Aquaculture, Ecuadorian prawn exports in September 2019
were 6,500 tonnes less compared to August 2019 (-11% m-o-m) amounting to a
total of 51,000 tonnes.
Since the suspension came into place, Chinese importers were worried prawns
prices would increase, as Ecuador is China's leading prawn supplier. Mintec
prawns price in China show an increase of 3% in September compared to
August, although not as much as anticipated.
In October, prices continued to trend up, although at a slower pace, driven by
high demand from Chinese buyers. As a result, Ecuadorian prawn exports to
China have rebounded in October, up 13% m-o-m. Market participants anticipate
prices to continue rising over the next couple of months, supported by the
approach of the Chinese New Year when demand usually picks up.
Overall, Ecuadorian prawns continue to gain presence in the global market, with
sales increasing month on month. Ecuador exported a total of 524,000 tonnes of
prawns between January and October – an increase of 26% y-o-y.
Ecuadorian prawn exports in
September 2019 were 6,500 tonnes
less compared to August 2019

Delivering value from
your investment in data
Improved value comes not from acquiring data, but from
an integrated view that enables you to access independent
information quickly.
Uniform and comprehensive data and insight, sourced
independently through RPA automation and experienced
teams, is a critically important component in driving your
continued success. Whether your negotiating with
suppliers or evidence basing your decisions to customers.
But equally important to acquiring the right data is getting
access to advanced analytical tools which enable you to
work more effectively with the limited time available.
Allowing you to connect the dots between geographies,
commodities, wholesale prices across the supply chain.
Sales and procurement professionals in retail,
food manufacturing and food service sectors benefit from Mintec

Food Ingredients: Indian sugar
prices are becoming more
competitive and dragging
global prices down
The Indian sugar market is still focused on the remaining stocks from the 2017/18 and 2018/19
marketing years. The production surge of 34m tonnes each year contributed to the stock-building in
the last two years. So far, almost half of the global sugar stocks are held in India, at 17m tonnes and
have contributed to the decline of global prices on the New York Intercontinental Exchange (ICE) by
2% y-o-y.
Indian sugar prices traditionally trade at a premium to global prices, thus, limiting Indian exports
level. The additional 11m tonnes in stocks (from 2016/17 to 2018/19) encouraged the Indian
government to implement export subsidies, to reduce the oversupply situation. The export subsidies
narrowed the gap between Indian and global prices but, given the high global availability of sugar as
well as the slowing sugar consumption due to health concerns, India has not succeeded in meeting
their target to export 5m tonnes (indicated by mills at 3.8m tonnes in September) for 2018/19.
Production in 2019/20 (started in October) is estimated to reduce the glut in the market as it is
expected to decline to 29.3m tonnes (-14% y-o-y). Dry conditions during the first half of 2019 caused
lower sugarcane yields in Maharashtra and Karnataka states. New export subsidies (around
$150/tonne) to support the export of 6m tonnes in 2019/20 are likely to drive Indian sugar prices to
competitive levels, but this would add downward pressure on global sugar prices in the next few
months.
Production in 2019/20 is estimated to
reduce the glut in the market

Fruit & Veg: Weather takes a
toll on the US and the EU
potato crops
Adverse weather conditions have affected the potato crop both in the US and
the EU. The cold weather that hit US growers has devastated the crop, where
approximately a quarter of the potato area has been abandoned. More than
20,000 hectares out of 390,000 hectares are estimated to have been lost due to
the frosts. As a result, the US is expected to have its smallest crop of 16.5m
tonnes, down 13% y-o-y in 2019/20. As a result, Mintec US potato prices have
increased 24% m-o-m and 54% y-o-y in second week of November.
Furthermore, as per the initial estimates from North-Western European Potato
Growers (NEPG), potato production in the EU is anticipated to increase by 10%
y-o-y in 2019/20. However, the last few months of the European potato growing
season has been challenging, with sweltering summer temperatures and then a
wet harvest. Heavy rain over the previous few weeks has deepened the flooding
crisis and is likely to lead to more potatoes being stranded in the ground in
countries such as the UK, Belgium and the Netherlands. As a result, Mintec UK
potato prices have climbed 9% m-o-m in the second week of November
(reaching £157.66/MT) despite estimates of increased production. Additionally,
the prices in the Netherlands have risen by 10% m-o-m in first week of
November.
More than 20,000 hectares out of
390,000 hectares are estimated to
have been lost.
Source: Mintec Analytics

Mintec Data
Our price data and market insight mean
you’ll be better able to anticipate and
overcome the impact of market volatility
and macro-environmental changes
on your business.
Giving your people the time to be able to
use data effectively to create more
sophisticated scenarios and cost models
that will validate their pricing strategies and
inform their supplier negotiations.
By focusing less on data quantity and more
on data quality, you'll create an operating
environment that is more efficient, more
profitable, and more stable for delivering
stakeholder value and maximizing margins.

Grains & Feed:
to prolong the anti-dumping
investigation on Australian barley
is likely to pressurise prices
China’s commerce ministry said at the beginning of November that it will extend
the anti-dumping investigation into imports of Australian barley by another six
months, with the investigation now due to be finalised on 19th May 2020. China
first announced an anti-dumping investigation into imported barley from Australia
in November 2018, with the probe set to last a year.
Australian barley exports significantly decreased by 29.4% in 2018/19 compared
to the previous marketing year. Furthermore, this significant drop is in line with
lower barley availability, following droughts in 2018. So far this year, Australia has
sold 2.3 million tonnes of barley to China, just under half of China’s total barley
purchase. Therefore, this extension to the anti-dumping investigation is likely to
further dampen the Australian barley industry, as possible outcomes could
include the imposition of import tariff on Australian barley exports to China. The
uncertainty is likely to result in a downward pressure on Australian barley prices.
Another important factor to consider is the consistent droughts in Australia,
which may also impact barley prices over the coming season. According to the
USDA, Australian barley production is anticipated to slightly recover from last
year’s output (+1% y-o-y), to a total of 8.4 million tonnes for 2019/20.
Australian barley exports
significantly decreased by 29.4% in
2018/19.

Meat & Poultry: Quarterly
Update: Beef Market
October 2019
The Aug-Oct average EU beef price dropped against the previous average (May-
July), as the summer “grilling season” passed and the demand for beef declined.
The total 2019 EU beef and veal production have been revised up by 10,000
tonnes from the previous forecast to 7.91m tonnes. However, this is a 1.2%
decline from the production in 2018.
Similar to European prices, the end of the grilling season weighed on US beef
prices. Additionally, lower-than-expected exports in July, especially to key
markets such as Japan, Canada and Mexico drove US beef prices further down,
resulting in a 3% y-o-y decline. US beef and veal 2019 production is expected to
remain steady, compared to 2018 at 12.3m tonnes. The USDA revised revised
its October estimate slightly lower than previously estimated due to a fire in a
Kansas beef processing plant (Tyson Food) in August 2019 reducing US beef
processing capacity in 2019.
From economical to political, all the factors impacting the beef market have
been analysed to provide a market outlook for the next three months. Mintec’s
market outlooks (schedule) provide insights on factors shaping the market
dynamics of various commodities, providing the opportunity for market
participants to stay ahead of factors that will impact procurement decisions.
Please visit our Mintec Analytics platform to find out more.
EU beef and veal production have
been revised up by 10,000 tonnes.

Delivering data-driven insight
To operate competitively, companies often focus on
simply acquiring data, believing that more data
means better decisions.
However, these companies don’t always realise the
risks of combining information from multiple
sources, and the issues associated with relying on
reproduced or biased data.
It’s not just the quality of data that affects your
bottom line. Today’s markets are inter-connected.
Global food supply chain dynamics shape commodity
prices and what might seem a small, isolated event
taking place on the other side of the world can have
significant repercussions on your business.
This is especially true for non-exchange traded
goods where transparency and independent insight
can be more difficult to obtain, but often affect your
biggest spends.
With margins continuing to be squeezed, it has
become harder than ever to achieve – and then
sustain – improvements to the bottom line.
All of this can mean increased costs, reduced
operational effectiveness and increased risk. This
makes it harder to deliver value for your
stakeholders and maximize your margins.
So how do you tackle these issues?...
Find out more about Mintec Data.

Nuts, Seeds & Dry Fruit:
Almond prices strengthen on
robust demand
The Mintec price of Californian almonds continues strengthening, rising 5% m-o-
m and 10% since a dip in September when markets slid on optimism over larger-
than-expected production in California in 2019/20.
Since September, prices have been firming up, driven by robust global demand.
The latest position report for October from the Almond Board of California shows
almond year-to-date shipment up 7% y-o-y, with export demand growing by 12%
y-o-y. Shipments to the domestic US market have declined by 3% y-o-y. October
shipments reached 265.5 million pounds, a record figure for this time of the year,
with a large volume of shipments also expected for November.
The crop receipts to date are 2% ahead of the last year at 1.59bn pounds. This
year has seen geographical variations in yields across California, with December
and January position reports probably providing a better picture on the size of
this year’s crop.
However, the production in California is still anticipated to exceed USDA’s official
estimate of 2.2bn pounds and settle between 2.3 and 2.4bn pounds.
Since September, prices have been
firming up, driven by robust global
demand.

Oils & Oilseeds: Soyabean
prices supported by recent
developments on the US-
China trade war
Soyabean and soyabean oil prices have been recently supported by the
developments of the US-China trade war, with indications that China might
resume its purchases of US farm goods.
On 11th October, Trump announced that the “phase one” of an agreement was
implemented, being the first step toward a resolution of the trade tension. China
would increase its annual purchase of US goods by 40B to 50B USD over the
next two years, including soyabean imports. In exchange, the US would agree to
delay the expected increase by 5% of tariffs on Chinese exports.
The soyabean market reacted promptly to the agreement, with the CBOT
soyabean prices increasing by 5% m-o-m in October only. As a result, US exports
have rebounded significantly since August), rising by 16% y-o-y (July-October),
particularly to China, following the progress made with the trade talks. As at
September 2019, soyabean prices were trading 15% below the prices in March
2018, when China introduced tariffs in US soyabean.
However, with the “phase one” likely to be delayed until next year, the market's
optimism towards the application of the partial deal could fade quickly and have
significant implications for US soyabean prices in the next few months.
The soyabean market reacted
promptly to the agreement, with the
CBOT soyabean prices increasing by
5% m-o-m in October only.

Brexit Index: Brexit Food Price
Index (BFPI)
Brexit Food Price Index Methodology
The purpose of this Brexit Food Price Index is to measure the changes in the
price of selected food categories that are reportedly highly sensitive to the
outcome of the Brexit process, particularly since the referendum in June 2016.
The index will be updated and reported on a monthly basis.
Categories have been weighted based on the value of the UK agri-food imports
from the EU, with the fruit and vegetables category carrying the highest
weighting, as the UK has a significant deficit in fruit and vegetable production.
The overall index (Chart 1) shows a spike after the referendum and has since
been maintained at this high level. Various categories have driven the index at
different points; however, the drivers have not been limited to Brexit, as
discussed within the various categories below.
Click here to read the current Mintec Brexit Food Price Index – updated monthly.

Analysis of price data helps reveal how food prices change
over time can; helping you gauge the true level of food
price increases.
Analysis of price data helps reveal how food prices
change over time can; helping you gauge the true
level of food price increases.
• Quickly access +14,000 independent food
ingredients & soft commodity prices & market
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sales@mintecglobal.com | www.mintecglobal.com | UK +44 1628 642498 USA (347) 554 0615 & (646) 586 9217

Mintec Market Movers report - December 2019

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Mintec Market Movers report - December 2019