The Indian Peanut market is firm and steady. The local demand for the commodity is stable, and India is in a good place for international demand with Peanut production. However, it is essential to know the global scenario since India is one of the primary Peanut exporting countries. The Peanut market of the following countries is likely to impact India and the commodity’s price.
China
One of the leading countries importing peanuts is having a five-year low in its demands. As a result, the country’s bulk purchasing of peanuts is lost, which was witnessed and high in 2020.
Several factors led to the decline in the import of peanuts in China.
- The import prices have gone up due to the increase in freight prices.
- Local products are less expensive than imported peanuts.
- The consumption of peanuts has gone down due to the Covid-19 related lockdowns and restaurants and food joints restrictions.
- Several cargoes from Sudan are filled with old crops in Chinese ports.
- All these factors and the likely rise of COVID-19 cases after the Chinese New Year can put the market down further in the coming days. Experts believe after the Chinese New Year, the market will drop further for peanuts in China.
USA
The USA had a better crop yield this year compared to last year. The markets are optimistic that the regulations coming in for tacking the supply chain disruptions caused due to the increase in ocean freight prices and inland transportation costs will be helpful for the Peanut market.
If the overall price can be reduced compared to last year, the USA can compete with Argentina when the export prices have gone up significantly.
So far, Argentina has the upper hand in the EU market as they adhere to the regulations related to aflatoxin and pesticides. However, the EU market will keep a close watch on the US products for these substances.
Argentina
The country’s Peanut market is in a volatile state currently. Already the La Nina effect has impacted the crops like corn and soybean. In addition, the high temperature causing dry spells might harm the standing Peanut crop unless there is substantial rainfall in the coming days. Last year better rain had helped the crop and secured the harvest.
There are news that the Peanut sowing area is down by 5 percent, and vessels skipping Buenos Aires are adding woes to the shippers. Already the exporters are struggling to meet the international demands due to the container shortage. It now remains to be seen how the country competes with US and Brazil in the export market.
Brazil
Like Argentina, Brazil has also faced the effects of La Nina last year and is getting affected this year too. However, despite the weather condition, the country has increased the sowing area for Peanut by 5 to 7 percent. Also, they had started sowing early, which allows them to complete the harvesting of the crop by the end of February or early March.
But with the rising temperature and shortage of rainfall by 20 percent due to the La Nina, the quality and growth of the Peanuts are likely to be impacted.
Moreover, the increase in the freight price and shortage of food-grade containers can reduce the chances of Brazil being a successful contender in the export market. Even though the Peanut exporters of Brazil were able to penetrate new regions with the crop and expected to do the same, the volatility of the transport system is making it more challenging.
The other factor that can impact the crop is the uncertainty of Brazil’s Russian demand for Peanuts. The exporters cannot move the pending crop to the warehouse, not knowing whether they need to be shipped to Russia or not. The overall Russian demand for the harvest has decreased due to bulk stock in the warehouses. As a result, the Russian peanut market is in a bearish mode, which is likely to affect Brazil negatively.
Africa
Apart from Senegal, where the export prospects look bleak, both Sudan and Nigeria are in a better position.
Sydney is having good arrival of new crops. Nigeria has a higher range for the crop, and a limited supply of Bold was shipped to the Gulf countries at $1200 CIF. But they, too, are suffering from a shortage of containers.
The international demand for peanuts is on a mixed trend. With farmers wanting to let go of the crop and consumers pushing for shipment, it has become a game of wait and watch currently as the market can go in any direction from here.