With crop season over, new oil is anticipated to be available in January. While prices have recently been at historical lows over the last 5 years, cash will be needed for purchasing the spring crop. Supplies are dwindling and prices are expected to rise.
Autumn crop is done and estimated total output is placed at 50 metric tons. Compare this to 2017’s autumn crop of more than 150 metric tons. Processors reluctant to sell anticipating price increase.
Spring crop produced about 500 metric tons, same as last year; however market prices as reportedly near cost. This has discouraged processors and it is estimated that autumn crop will be only 100 metric tons as opposed to last year’s 300.
With too much rain in Southern China, there are potential reports that much of the fall crop has rotted. With limited raw material available and higher labor costs, prices have increased. We would expect this to last until the spring crop.
Prices have risen following the completion of a slightly smaller Autumn crop. Increased production and raw material costs will likely keep prices firm until new Oil is available in June.
Reports indicate that by the time the Fall Crop has ended in January output will be far less than expected. One report indicates that production in Guangdong Province will be 50% of normal levels. Prices are expected to firm.
Price increases of $0.02 – 0.05/kilo have been reported at the farm level. Reports also indicate a 100 ton carryover from the spring crop and a lower yield on the Autumn Crop that means higher costs. Pricing will be adjusted by the end of November and any changes are expected to be minimal.