Peanut Crop Report February 2020

February 2020

February is shaping up to a very interesting month, the international market seems to be struggling with lack of goods for the first half of the year, there has been a sudden rise in price in both the USA and China with further uncertainty over the remaining the international market. And with a lack of clarity regarding the Chinese Coronavirus, and how this will affect the food industry, this may further influence the peanut prices.

Argentina

The new crop was plagued by a drought (very high temperatures for the season and no rain) until a few days ago. A general rain was received last week which gave some relief. The forecast though doesn’t look particularly good. Argentina will need to receive a lot more rain with the temperatures and high wind they are experiencing.

The current crop supply seems to have been depleted, meaning only a small quantity is available. This has caused prices to increase considerably. Argentina has also seen a rise in the export duty of 12%, over double that of 2019 (5%) an increase that Argentina will have to find a way to recoup on new sales. Again, it’s not yet known how this 2020 crop prices will sit within the global market but expect an increase on last year’s prices.

Brazil

After a dry start, Brazil has had very good rains, almost daily. The crop is doing well by all accounts, shellers are still looking to fulfill last season’s contract so no one is quite sure when the new crop will become available for purchase. The Brazilian crop comes in around April a month before Argentina. Brazil is slowly starting to offer but will look to Argentina to decide on before really offering.

China

China has extended its new year celebrations to help contain the outbreak of the Coronavirus. With talk of further extensions to factory shutdowns to try and reduce the spread of this virus. This means there is a great deal of unknown regarding the impact this will have on the domestic and global peanut market. The biggest question is how long this outbreak will continue and what will be the impact.

India

The biggest news in India has been the issue centered around palm oil; whereby the Indian buyers halted the buying of palm oil from Malaysia. This has resulted in a spike of Indian edible peanuts and peanut edible oil prices.

USA

Quality of the crop and demand is the main issue regarding the USA. Aflatoxin is affecting nearly 30% of the crop in January alone and this is looking to rise, and in addition to the issues facing shelling industry, there is concern that they will not be able to shell, re-mill and blanch enough human-grade product to meet demand. It is unlikely we will see EU grade widely available from the US this season, which is available will be at a premium.

Conclusion

Looking at the current market situation, Argentina should be able to capitalize on any demand at least until June/July. Considering that the USA is basically a non-factor, so in China due to their very high prices; Brazil has no current crop to speak of and with the quantity postponed from 2019 crop over to 2020 crop, there shouldn’t be much pressure coming from there until June/July.

Moreover, there doesn’t seem to be much 2019 crop available in the market from any origin, making the first 6 months of the year even more difficult for spot EU grade material.

Uren can supply a range of nuts in volumes tailored to your business needs, at a competitive market price. Contact us today to discuss your business requirements and our friendly team of experts will be more than happy to help. Learn more about our range of peanuts.