Mundus-Agri: Peanuts: slump in US exports

Date: 9th August 2022 Category: Latest News
Mundus-Agri: Peanuts: slump in US exports

NEW DELHI/ATLANTA. Farmers are switching to more attractive alternatives such as cotton or soy in India and in the United States. China's peanut production will only rise nominally in 2022/2023, and US suppliers are having a hard time competing with India.


Extortionate freight charges

According to the International Nut and Dried Fruit Council (INC), the United States Department of Agriculture (USDA), and other sources, global peanut production will range on a similar level as last year. The nominal uptick is driven by higher yields rather than an increase in acreage as cotton and soy are presently outpricing peanuts. Although China will remain the world's leading producer, the crop size will only range marginally higher than last year. Freight charges have,  risen tenfold since the pandemic started, which is slowing down exports and boosting China's domestic consumption. India is expected to continue to increase production in 2022/2023, although many farmers are switching to cotton or soy.

India vs USA

While production will rise in India this year, the opposite is the case in the United States. As The Peanut Grower reports, acreage has declined by 5%, whereas analysts reckon that 10% is more probable. The issue is that many farmers have also switched to cotton and soy here. Summer, coupled with a national recall due to salmonella, has also put a dent in domestic consumption. Exports also range lower. The USDA reports that the US only shipped 322,679 mt of peanuts overseas in January to March, which is 19% lower than in the same period last year. Mexico is the main export destination, followed by the Netherlands, Japan and UK. Shipments to China have, by contrast, slumped by 60% as US suppliers cannot compete with their colleagues in India.

The USDA reckons that the rise in production will prompt India to step up shipments to China in 2022/2023. Local demand is, however, more centered on oil. As overseas demand has risen, prices are up in India at present. Yet, the color of the new crop is darker than usual in Uttar Pradesh. As this deterring international buyers, suppliers mainly sell these nuts in the local markets.