Peanut Market Update September 2022 Week 38
There has been a significant report of a decrease in the supply of peanuts from most regions, with more cuts expected from the new crop from Argentina and Brazil. As costs for farmers and shellers rise, so do prices for crops and also manufacturers’ costs.
Unfortunately, we can’t estimate exactly how much impact inflation will have on demand. Western Europe will be impacted the most due to its gas supply issue. Costs will likely increase for consumers as well as manufacturing facilities. European retailers are trying to stop an increase in price. We will have to see how the situation progresses to learn more about the impact.
USA
In the United States, there are some issues with forecast yields. The yield is expected to be lower than the previous year’s due to a drought and disease infestation. Still, the quality is reported to be good- as long as the weather cooperates until harvest is complete.
The estimated yield is between 2.75 million to 2.9 million.
Apart from that, the market remains very quiet, with manufacturers content and hoping that the crop will be better than expected. This will lead to a lower price. Prices in Western Europe have been uncompetitive and more help will be needed for Europe to show any interest.
Argentina
Unlike the United States, Argentina has seen good demand from Western Europe and China in the past month. With lower crop and higher freight rates, especially in Europe, CFR prices have increased significantly to the high US$1600s for the current crop with low US$1700 for the new crop. The usual gap between whole kernels and splits is lessening due to the lower availability of splits.
All attention has been diverted to the new crop plantings. They are expected to be lower, but by how much, we will still have to see. Experts predict between 10 to 15%. Prices are expected to rise. The Cordoba province has been under drought conditions, with the La Nina province extending to yet another season.
This might prove to be a problem for Argentina in the long run.
Brazil
Brazil is facing the same as the La Nina province in Argentina. This will lead to late planting of the new crop, bringing estimates down by 10 to 20%. The old crop situation is still unchanged, and there are still heavy stocks of the crop with the farmers.
Brazil also struggles to export to the EU due to afla and pesticide regulations.
China
China is also set to have a lower crop this year. Crop conditions are not ideal, bringing production down. One of the biggest problems affecting China is demand. There is a struggle to increase demands due to the lockdowns in various cities in the countries. With the Chinese elections on the horizon, we shall have to wait and see how policy changes will affect demand.
India
India has planted 44.75 lakh hectares of peanuts this year, compared to 48.35 lakh hectares in 2021 and 50.44 lakh hectares in 2020, respectively. This is a decrease of 7.45% since last year. The monsoon season seems to be adequate so far.
We will let you know as the situation progresses.
