Edible Nuts Market Report - June 2020
The impact of Covid-19 continues to disrupt global trade as well day-to-day lives around the world. There has been an improvement in situations across China, Asia and Europe while the USA, South America and India are still passing through the peak periods. A few economies have started opening with caution and are slowly returning to normal. The long-term impact of our current situation is yet to be seen but fundamental change in consumer behavior and purchase patterns is expected. Consumer focus on healthy and fresh food is expected to rise, as well as an interest in transparency and traceability of the supply chains. Consumption growth and economic revival in the EU & US markets will drive the direction of nut prices.
The cashew market continued to be quiet over the last few weeks. One would expect markets to trend lower with lack of buying support — while on the contrary, cashew kernels have been surprisingly resilient. This could be attributed to the slower pace of inshell arrivals in West Africa, as we near the end of the current harvest in most countries. Prices in IVC did firm up with local inshell buyers getting active and the arrival pace slowing down. Good quality inshells are hard to find at a bargain across West Africa. On the kernel side, the shipments to the EU and US have been excellent. The estimates are that the kernel shipments to these regions are up over 25% in Jan-April 2020. The COVID-19 demand situation has led to higher consumption, but this level of imports is still very high and shows a very comfortable stock situation with buyers. The biggest unknown is still the Indian domestic market situation – both in terms of inshell supply and kernel demand.
The almond market continued to remain relatively quiet over last few weeks following various holidays in many of the major markets, this certainly being the case for both the EU and US Domestic. With some of the other markets now starting back up and borders opening, there is plenty of demand waiting to be serviced as good activity is seen in Turkey and the Middle East for both current crop and new crop. The Spanish 2020 crop is also expected to be higher by 23% than last year. Continued support with investments in irrigation and conducive weather conditions have led to successive growth years for Spanish almonds. With overall good crops expected across regions and inventory carry over, prices are all time low and expected to remain bearish for next few months. There have been increasing concerns over lesser availability of good quality and larger sizes and may push prices to firm levels for selective grades.
The pistachio market has been holding steady for the last few weeks and all eyes are on next season’s crop now. Year-to-date shipments have been about 18% less than last year during the same period. While domestic USA consumption has been similar to last year, the exports have reduced across major importing countries, especially China. There have been reports of rains in the second half of April having an adverse impact on bloom, which might lead to lower yields due to more blanks or even a delayed harvest. Though this impact can be better ascertained by July, early signs are of slightly short crop. The next couple of months prices are expected to hold steady to firm and the rate of recovery in China and EU will determine the demand.
The walnut market remained weak in the last few weeks due to low demand across all major markets. Shipments from USA reduced over a year-on-year basis, though prices remained steady. The inventory carryover with exporters is good and they are waiting for market conditions to improve. The Chilean crop is progressing well with some concerns on yield as well as the overall crop availability. The next few weeks will provide a more firm estimate on the Chilean crop, which will determine the prices for the rest of year.
During the last month, TMO in Turkey has sold their remaining stocks by the tender process. A total quantity of 27,000 MT was put on the market, clearing the TMO warehouses. The limited availability of good quality product has pushed the prices up in last few weeks and has been holding firm at higher levels. The hazelnut prices have been up while all other major tree nut prices are at all-time low. The consumption of hazelnuts across domestic as well as export countries has been steady supporting the high prices and may not hold for a long. The new crop is still few months away and prices may remain steady with some softening in the near future.
The macadamia market remains similar to the previous month. The ingredient demand has reduced across the EU and USA due to various lockdowns being in place, while snacking demand has been steady. For the upcoming season, both Australia and South Africa have been reporting crop numbers similar to last year, though there have been some concerns on the final yield. It is expected that major buyers have covered their demand for the current year and most of the inshell prices have been locked in. The prices are expected to remain stable to firm for the current year unless the situation deteriorates drastically in developed countries or there is major crop shortfall.
Harvest season has recently begun in Peru and Bolivia, the world’s largest producers of quinoa. Both Peru and Bolivia continue to have restrictions in place which has significantly slowed the flow of quinoa from farm to processors. Demand has also slowed in May. The food service industry shutdown is the primary reason for demand decrease; however, the retail sector remains at least stable and at times strong, which has helped provide some balance. Quinoa pricing should remain stable as long as the slow demand is matching the slower supply chains. Currently, there is uncertainty for the future of both the supply and demand of quinoa, so longer forward contracts remain largely off the table.
For Chia, the harvest season is set to begin in July. Unfortunately, drought has affected the crop in Bolivia and Paraguay, which will have an effect on supply and demand. Prices could increase as early as July or August, when the squeeze on supply will start to be felt in the market.