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Edible Nuts Market Report - July 2020

The impact of COVID-19 continues to disrupt global trade as well day-to-day lives across the globe. Situations appear to be worsening in the USA, India, and South America while the rest of the world seems to have reached a stage where normal life can return soon, if it hasn’t already. There has been visible impact across the globe due to job losses, and consumer behavior changes in relation to that are expected. Countries like India and Brazil will see a large amount of demand destruction, especially for higher priced food products like nuts compared to food staples. Most of the commodity prices are at record lows, providing good coverage opportunities, and there seems to be lesser chances of any further downside. With some positive news on vaccination and recovery rates being higher; there is hope that situation may improve soon and the overall global economy can recover in the next few months. Detailed information on various nuts and superfoods is as below:


The cashew market continued to be in limbo over the last few weeks. There have been reports of smaller crops and slightly poorer quality in West Africa, especially towards the season end; while Vietnam and Cambodia have projected record high crops. Processing continues to be slow in both Vietnam and India due to disparity between RCN and CKN prices. Most of the processors / buyers appear to be covered well for 2020 and even beyond, leading to low interest in further purchases and pushing the prices further down. The shipments to destination markets for 2020 have been record highs from Vietnam and are expected to slow down in the next few months. Lower grades and pieces continue to have lower liquidity due to closure of the HoReCa segment across the markets, leading to high inventories. India’s demand appears to be low for festival season as the COVID-19 situation is still not well under control. For the next few months the cashew market is expected to be rangebound with fewer chances of any further downside on CKN prices.


The almond market seems to have reached an equilibrium, or perhaps even a bottom, in the last few weeks. Buyers see great values at current levels which are historically low, while growers are resisting these levels as they suffer losses. The Objective Estimate was released on Tuesday this week and as expected it was in line with the Subjective Estimate of 3.0 billion pounds. The market has already factored this in, regardless we see firmness as some low-grade material becomes harder to find. Shipments for June have been good, with increased shipments to India. New crop commitments also continue to be strong as there was plenty of new crop business closed in June. This will all be reflected in Friday’s Almond Board position report. With a strong carry-over and the new crop soon to be harvested, demand will be met with no disruption in supply.


The pistachio market has seen further weakness in the last few weeks for both USA and Iranian products. There have been reports of some rains which can have an adverse impact on bloom, which may lead to lower yields due to more blanks, or even delayed harvest. There are early signs of a slightly short crop; the overall crop outlook for 2020 looks to be much higher than 2019 coupled with lower demand due to the current COVID-19 situation. Prices are expected to remain bearish in the near future.


The walnut market continues to have weakened prices in anticipation of a good crop coming ahead, as well as slower shipments due to reduced demand from all major markets. Buyers are looking to liquidate their carrying stocks before committing to new purchases. New crop prices are significantly lower than last year’s opening prices, though the interest remains low and may lead to further bearishness. Due to the COVID-19 situation in the USA, there may be logistics constraints in next few months that could lead to lesser stock availability and some firmness in pricing. Chilean prices remain stable, especially for higher grades, and the crop is progressing well, though not without some concerns on yield as well as the overall crop availability.


The hazelnut market remained stable for the last few weeks as overall demand seems to be similar to 2019. Turkey has exported 307,000 MT of the 2019/20 crop so far, which is almost 30% higher than last year for the same period. Most of the buyers seem to be well covered, leading to slowed demand while the stocks at origin also are low. The main interest now is for the new crop, which is currently at a premium compared to spot prices. The Exporter Union survey report as well as TMO estimate on crops are expected by mid-July, which will give more accurate information for the upcoming season. The market seems to be in balance with both buyers and sellers reaching an equilibrium and TMO participation may push the prices up if they start falling beyond a certain point.


The macadamia market continued to remain stable to firm for the last few weeks. The demand for higher sized NIS (nut-in-shells) continued to be good while smaller sized NIS find lesser demand. Ingredient demand continues to be reduced across the EU and USA due to various lockdowns being in place. There have been some indications of a poor South Africa crop, leading to overall lower yield as well as a higher amount of smaller sized nuts. The Australia crop also appears to be similar or slightly short compared to last year. Most of the buyers have covered their demand for the current year, though there has been some new demand coming, in especially from China. Prices are expected to remain stable to firm for the current year.


The Quinoa harvest in Peru and Bolivia is close to completion and should be over by July end, with full crop size expected. The arrivals of the fresh crops from growing regions to processors has been impacted due to COVID-19 lockdowns. Bolivia continues to face logistics issues, leading to an increased transit period between 60 - 90 days from processor to port. As a landlocked nation, they are dependent on neighboring ports. The overall quinoa market continues to be weak with HoReCa segment being slow, but with increases in household consumption the retail segment has been able to maintain demand.

In the world of Chia; harvest started a week ago in Paraguay, Bolivia, and Argentina. Some crop loss is expected due to weather impact but exact availability will be much more clear basis how the harvest progresses in 3 - 4 weeks.

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