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International Honey Market Update – June 2017

- June 1, 2017 - Ron Phipps, President, CPNA International Ltd.1 Co-Chairman, Committee for the Promotion of Honey and Health - (excerpt)


The International Honey Market has reached a Point of Inflection as predicted in the January 2017 Report. The only question immediately before the industry is how steep will the curve of rising prices be from their abyss of the past two years. In the January, 2017 ABJ beekeepers in the Southeast region of the U.S. reported offer prices for new crop honey as low as $0.95/lb. while white honey from Argentina and Canada was in the $0.90/lb. range.

In a speech to the Pan South American Beekeepers Conference held in the ecological jewel Iguazu Falls, I predicted a point of inflection after prices reached historic highs in 2014. These two Points of Inflection now must be resolved by reaching a Point of Equilibrium which will better balance and integrate the incentives to produce and consume honey allowing honey prices to fluctuate within more normal and modest ranges so the international honey industry can achieve greater stability and avoid the nadir and apex of prices.

Oversupply, collapsing prices, and questionable qualities have been replaced with shortages, rising prices, more powerful testing modalities and more stringent quality demands throughout the international marketplace. The honey industry needs both more powerful scientific methodologies and greater integrity to overcome the adulteration and circumvention which have plagued and haunted the industry through the collusions of cunning and unscrupulous players.

In the 3rd and 4th quarters of 2016, a flurry of highly speculative contracts at extremely low prices were made involving countries including Argentina, Brazil, Vietnam, India and Ukraine. As a result of adverse weather and the lack of incentive for beekeepers, there have been very significant delays and defaults of contracts. Fulfillment of contracts has created losses for some exporters. The collapse of prices is projected to result in bankruptcies of some beekeepers and exporters in some major exporting countries in South America, Asia and Europe. This phenomenon of the failure of speculation has become evident in March and April, 2017. The specific analysis of several major honey-producing and exporting nations, and the chart below, will hopefully shed light upon the facts, foundation and causes of the current Point of Inflection.

The Point of Inflection, now manifest in the second quarter of 2017, is a function of many variables and most decisively the use of Nuclear Magnetic Resonance (NMR) technology applied to honey. The application of NMR testing has created a Great Wall around Europe for Chinese honey and a Great Bridge for South American honey to Europe. It has also created an openly two tiered price structure for Chinese honey to Europe, i.e. honey which cannot pass the NMR test is offered in larger quantities and substantially lower prices than honey which passes the tests. There are similar constraints for some other honey exporting countries shipping honey to Europe.

From 2007 to 2013, the volume of honey exported in the world increased by 61%, while the number of beehives in the world increased by 8% during that period. In many countries, including France, the US, and Argentina, honey production and or productivity per hive have dropped to nearly half of what they were in the past 15-20 years.

Chart 1 succinctly captures the problem that has affected the international honey market. Professor Garcia and other researchers have discovered and documented several significant aberrations and inconsistencies for several major honey-exporting countries relative to total exports, beehives, domestic consumption and production. There are also aberrations between the qualities, colors, flavors and aromas of honey exports and the flowers allegedly used to produce the exported honey, the climates and geographic origins alleged. There are thus both major quantitative and qualitative aberrations coming to light through the studies of apiculturists and scientists.

Macro Trends

Trends for honey prices at different levels of the domestic market are illustrated in Chart 2, prepared by Dr. Stan Daberkow, who served for decades as an economist for the US Department of Agriculture.

Chart 3 is an analysis of US imports from selected countries over the past 24 months from January 2015 to December 2016.

Dr. Daberkow and Prof. Norberto Garcia have provided further information regarding price tendencies, export …