The global supply of peanuts has increased year on year, which many thought would
continue to push prices lower, however it looks like some origins have softened in price
and others are holding their ground. The US is almost certain to produce a record crop
as the harvest nears 85% complete, which has put pressure on peanut prices. Given the
US is the worlds 3rd largest producer of peanuts, the trade thought this price pressure
would spill over into the Argentinian market, but it hasn’t. The reason being that the US
has limited blanching capacity, therefore Europe will still need to rely on Argentina for a
large portion of its imports.
China is somewhat of a similar story, with a slight difference. It’s expected to produce a
record crop, but growers for now are digging in their heels and refusing to sell which is
keeping prices stable. Given most growers don’t have the capacity to store large
amounts of stock, we expect the market to ease over the long term from this origin.
In summary, the market is a flush with peanuts, however it’s now a technical market
whereby processing capacity, variety and availability are going to be the key drivers on
price over the medium term.