Chinese Peanut Market Update November 2021
The yearly Chinese International Peanut Conference took place in the previous week on October 27th and 26th respectively. This conference was extremely important for the industry as it looked into various issues faced by Chinese peanut importers and suppliers.
We all know that Chinese agricultural products are needed both domestically and internationally. Note that millions of households in China share the land on which these crops are grown so it is very hard to record accurate figures. Various speakers throughout the conference have varying reports on the total production. However, in general it was agreed upon that the total production was between 17 to 18 million metric tons.
This is quite close to last year’s crop production as well.
State of The Crop
Additionally, there is a carryover of 1 to 3 million tons of raw kernels (15%) and peanut oil (45%). However, inspite of this, peanut prices have lowered by the end of the crop year between June and September, more so than this time in November.
The Henan province had a record-breaking rainfall in July which affected crops but apart from that, the overall harvest was quite good. Unfortunately, due to rain during harvesting, there's higher moisture this year. But this is actually a good thing as it will lead to more developed peanuts than last year.
Quantity of the Chinese Peanuts
As usual, the export quantity of Chinese peanuts is about 4% in total. Its price is dependent on the local peanut prices and, of course, freight rates.
Due to the shipping crisis, Chinese peanut prices have been extremely high for the past two years. While the quantity it's expected to be huge, farmers are not too enthusiastic about selling because of the growing costs.
Freight Issues
While freight rates have dropped by several hundred euros for 20’ and 40’ containers, it is still a long way to go for the shipping industry. It is believed that this crisis will continue at its current level till Q2 and even Q3. What we have learned from the shipping crisis is that no matter how low or high prices are in China domestically, the sea freight largely influences prices in China.
