Market update: Peanuts
Current geopolitical tensions have hit peanuts hard as is the case with most agricultural commodities. Uncertainty is the issue here, especially since acreage remained shrouded in mystery for quite a while. These are, however, not the only problems presenting a challenge for producers.
Clearer picture emerges on sowing
The USDA expects acreage to decline by around 3% in Georgia, which is the most important producing US state, and total US acreage to decline by 1% this year as compared with 2021.Trading is largely subuded due the high degree of uncertainty persisting in the market as The Peanut Grower reports. Not only did it remain unclear how much farmers would sow as many initially wanted to switch to more profitable alternatives such as cotton or corn but the war in Ukraine has also prompted the prices for fuel and fertilizers to surge. Since peanuts require relatively low maintenance sowing did not decline as much as anticipated.
Farmers, in addition, prefer not market the new crop at present and since shellers have sufficient supplies at their disposal the demand for the current crop is also low. Producers are also far from satisfied with the prices the buyers are prepared to pay. Another issue to consider is that the war in Ukraine has caused vegetable oil prices to surge, which is also impacting the prices for peanut and soybean oil.
On top of this, the weather is far from perfect since farmers are confronted with drought and La Niña will become an issue at the end of June. Sowing is also expected to range lower in Argentina and in Brazil as farmers here may switch alternatives. As Ukraine and Russia are important customers for US peanuts the war will certainly impact exports. US shipments of peanuts without shell to Germany have, however, risen by 16.3% to 1,683 mt between September and February as opposed to the same period in 2020/2021 as recently issued import data by the Federal Statistical Office of Germany shows. The US are the fifth most important supplier for Germany with Argentina ranking first, followed by the Netherlands, South Africa and Nicaragua. Germany has cut imports by 18.1% to 50,694 mt. (Mundus-Agri)