Market Overview – Week 48 / 2011

Banana selling prices in Russia were slightly below USD 8.00 per box, at around USD 7.90 per box for the fruit of the current week, while fruit of previous weeks in the cold storages, changed hands at around USD 6.0 per box CIF.

Almost 1.9 million boxes were discharged and around 1.5 million boxes are expected for next week.

Traders expect demand to strengthen and prices to improve accordingly in the imminent future.

Banana selling prices in the Mediterranean were mainly at around USD 9.0-9.50 per box CIF. Volumes from Central America were still high.

Difficulties in the Iranian market weakened demand from that country at the transit ports of Mersin and Tartous.

Purchases of bananas from exporters in the Ecuadorian spot market were reduced due to the troubled situation in the Russian and Mediterranean markets although some of the traditional Russian exporters are expected to resume shipments in 1-2 weeks time together with others of the Shippers to the Mediterranean.

Due to the current difficulties in the banana trade no fixtures of vessels were reported during the week.

There were a few vessels being fixed for fish cargoes for Inter-African Trade and few fixtures also for the Chilean fruit trade as season started earlier this year. Morocco was also active with citrus trade.

Time charter levels reached US cents 30-35 for larger tonnage and around US cents 50-55 for smaller tonnage.

APM Terminals shows great confidence in Costa Rica

Addressing delegates attending the annual TOC Container Supply Chain Americas conference, APM Terminals Moin Managing Director, Captain Paul J. Gallie cited the company’s new Terminal de Contenedores de Moin (TCM) project in Costa Rica as an example of essential Latin American port planning and development.

“The key factor here is that there are no alternative or cheaper solutions to the existing problems in Limón/Moin” Captain Gallie stated. The existing container facilities of Puerto Limón and Moin handled a combined 858,161 TEU in 2010, and can only accommodate smaller vessels.

In its first year full of operations in 2016, the modern, deep-water TCM facility representing overall investment of USD 992 million is expected to handle one million TEUs servicing the larger vessels now entering into the Latin American trade lanes. At completion of the first phase of development in 2016, TCM will provide 1.3 million TEUs of annual container throughout capacity with 600 meters of quay, six berths and 2,800 reefer plugs. At full build-out at the end of the 33-year concession, TCM will have an annual capacity of 2.7 million TEUs with 1,500 meters of quay, nine berths and 6,500 reefer plugs.

Agricultural products accounted for 35.9% of Costa Rica’s $9.4 billion worth of exports in 2010, according to World Trade Organization (WTO) data, with merchandise imports of $13.6 billion of primarily manufactured goods. Costa Rican exports have been projected by IHS Global Insight to increase in value by 75% to $16.7 billion over the next five years. Costa Rica is currently the world’s largest exporter of pineapple, and the 4th-largest exporter of bananas.

As reefer cargoes become increasingly containerized, the need for container terminal access will become an even greater factor in Costa Rican global trade. At present, banana exports account for 34% of Costa Rica’s containerized exports, while pineapple represents 27%. Approximately half of all reefer cargoes move by container currently, with 85-90% containerization forecast by 2035.

Captain Gallie also emphasized that APM Terminals will initiate an aggressive Corporate Social Responsibility strategy in Costa Rica based upon its global experience in sustainable development.

“Our focus as a company will not only be on environmental protection measures, but just as importantly, the introduction of clean energy sources for reducing CO2 emissions at the facility, with extensive recycling processes at all levels within the operation as well as in the community at large” said Gallie.

Chiquita to move HQ to Charlotte

Chiquita will be moving its headquarters to Charlotte, N.C. North Carolina Gov. Beverly Perdue made it official during a news conference at 4 p.m.

Chiquita CEO Fernando Aguirre attended the news conference in Charlotte. He was met with a round of applause when he was introduced by Perdue.

Aguirre thanked the citizens of Cincinnati, as well as Gov. John Kasich and Sens. Rob Portman and Sherrod Brown for supporting Chiquita over the years.

"The company has been there for 28 years, and they have treated us extremely well. We have been there for many years of growth. That's where the company truly took off," Aguirre said. "But times change. The fact is that we needed to make decisions that would help our business, not just for the short term but also for the long term."

Reports that the company was looking to leave the Tri-State sparked competing offers from Ohio and North Carolina, and the company said it was also looking at Florida and Louisiana.

In the end, two factors contributed to Chiquita's departure: economic incentives and the accessibility of international travel.

The Associated Press reported that a North Carolina Economic Investment Committee approved a $22 million incentives deal on November 27, which includes more than $20 million in state incentives and more than $2 million from Charlotte-Mecklenburg County's government.

“Charlotte provided the most compelling economic offer and the region is an attractive community for our employees,” Aguirre said.

But a spokesman for Kasich said Chiquita's issues were about more than money.

"We're not going to be irresponsible and give away the store to try and keep a company that fundamentally doesn't want to be here or which has already made up its mind to leave," said Kasich spokesman Rob Nichols.

The main markets for the produce company's bananas, bagged salads and snacks are North America and Europe. Its main banana producers are in Latin America. Chiquita has management operations on all three continents.

Business leaders said Delta cutbacks at Cincinnati/Northern Kentucky International Airport have made travel to those destinations difficult. Right now, CVG offers only one direct international flight -- to Paris -- while Douglas International Airport in Charlotte offers about three dozen destinations.

"If Chiquita's business is growing in Europe, they want access to Europe. Chiquita's suppliers are in South America, they want access to South America. And those are things that we don't offer them in Cincinnati, unfortunately, any longer," said Doug Moormann, vice president of Development Strategies Group.

Perdue said Chiquita will move its headquarters, along with its research and development laboratories, and will eventually bring a total of about 417 jobs to the area. The jobs are supposed to pay an average of about $107,000.

Chiquita has been headquartered at Fifth and Sycamore since 1987 and is under lease through 2012. The AP said the move will be complete by 2014.