Monday Market Briefing - 25th January 2021

Last week old and new crop world markets scorched £7 higher before getting a dose of vertigo and rushing back sharply to end down £5 on the week. Apart from widely forecast rain in South America, there was no big news story to suddenly hit sentiment – all the pressures on supply we know about are still there – swings like these are usually associated with technical fund money adjusting exposure and this was no different.

We can’t rule out another bumpy week ahead but now we are back at the levels of early January, and with fresh international tender activity expected, support should creep back into the market. Old crop might now be more reluctant to track higher but a cautiously positive week is likely.

Away from the immediate drama, it’s worth noting a sub-plot whereby it became apparent last week that tariff free access for our crops under the BREXIT agreement might not be quite as straight-forward as we first thought. Under RoO terms (rules of origin) obviously UK grown crops are zero rated for tariffs into the EU. However complications might arise where the receiver is intending selling their end product onwards outside the EU later. That end-product needs to be substantially altered/processed to be certain of remaining tariff free when it leaves the EU. Clarification is urgently awaited as this aspect will hold up some potential old crop activity.

Have a good week and stay safe.