Cost of Peanuts & Pecans on the Rise
Read all about how the Argentine shortfall is pushing up peanut costs and why pecans are still expensive…
Argentine shortfall pushes up peanut costs
A smaller world crop of peanuts, in large part down to Argentine weather problems, has been pushing up wholesale costs in the past few months. Yields were hit by drought and quality by a subsequent wet harvest.
The new crop shipments starting to arrive in Europe mid-year are already being reported to show very varied quality. Dealers also mentioned the risk of defaults by Argentine suppliers who still had old crop contracts to honour and ship, running some of these into the new season. Some sources think this could tighten suppliers in the first half of next year. Another important peanut supplier, Brazil, was meanwhile reported to have now committed most of its crop to EU customers, its nuts having gained favour here in the last few years.
Argentina’s problems come as the major supplier; the USA confirms it has sown a smaller crop this year, planted acreage dropping by 20% to some 1.5 million acres thanks to new government incentives to plant cotton instead. Offsetting that, though, US commercial stocks were recently said to be almost 50% higher than last year’s.
Among other suppliers, China’s 2017 crop is reported to be mostly sold, with merchants there retaining the best qualities amid reports that its next crop too will be smaller and prices higher, following the world market up. Plantings are believed to have dropped especially in areas important for supplies of Redskin & Hsuji nuts and in some regions that usually supply Europe. Local observers blame disappointing farmer incomes from the crop, attempts to relocate some plantations into less weather-risky areas and bouts of adverse weather.
India, another large peanut producer if of less direct relevance to the EU than other foreign food nut markets has also seen a decline of a fifth in its winter-sown area, pushing up local prices, especially for better quality nuts. Subsidiary supplier Egypt may see good yields after favourable weather but has also cut area by 20 – 40% in response to rising production costs according to Dutch trader Aldebaran. While the US crop appears to be getting mostly favourable weather at the moment, the general supply outlook shows no early sign of loosening – or prices easing significantly lower.
Pecans still expensive despite lower demand from China
Slower demand from key importer China has failed to bring down prices of still-expensive pecan nuts.
Old crop (2017) supplies are seen well committed by packers with some reportedly sold out for types such as Fancy Junior Mammoth Halves, which could rise further in price.
South Africa is planting more pecan orchards that should raise its contribution to supply. Kernel processing is said to have improved and quality with it, with certified factories making the nuts more attractive for export. South Africa is known for lighter coloured nuts with their own distinct taste and has been offering more attractive prices than the USA. Chinese importers may prefer to buy from this source because of their trade wrangle with the USA.
Source: Summer edition – Snacks Magazine