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Edible Nuts Market Report - March 2020

A lot has happened in the past few weeks in terms of critical events that will influence the course of the markets for the rest of 2020, or perhaps even longer. The dark cloud of COVID-19 has shadowed around the world and people across the globe are all impacted, directly or indirectly. With many countries taking control measures like lockdown, day-to-day lives have come to a standstill. Developed countries with good medical and social systems in place are seeing the stretch on infrastructure. Most developing and under-developed countries don’t have enough of a social safety net and we hope that necessary measurements are taken to protect lives as well as livelihoods. There has been a spurt in demand across the food categories that may provide spot liquidity and trade. Logistics so far have not been impacted much, though with lockdowns we might see delays due to personnel availability as well as permits / documentation / payment flows. At the current moment, most of the prices are at lowest point in last decade or so and we believe that’s close to the bottom and good time for coverage. The trends for individual nuts are given below and might change drastically in next few weeks basis how the situation unfolds.


Inshell trades have come to a near standstill as everyone grapples with COVID-19 responses from various governments. Restrictions in IVC of a nightly curfew and travel restrictions to upcountry locations would impact RCN flow and delay shipments. India is on lockdown for 21 days, completely halting processing and trade, while Vietnam has declared a voluntary lockdown. Processors have become very cautious in their inshell purchases and with every passing day, their worry becomes justified. However, if processors do not buy inshells, we will have a situation very soon when local in-shells from India and Vietnam/Cambodia will run out and then we may see cashews factories closed due to lack of raw material.


International trade has been disrupted with some markets being closed at the ports, as expected. We expect the March position report from the Almond Board of California to exceed March shipments of a year ago and once again be a record shipment month, despite economic disruption thus far. Domestic USA sales have been strong as customers pull forward contracts to fill demand as consumers stock their pantries. Buyers are content to purchase at spot levels as uncertainty remains. The 2020 crop is progressing well without any major weather issues thus far. In fact, California has received much needed rain this weekend. The market remains bearish on current sentiment and new crop expectations exceed-ing 2.6 to 2.8 billion pounds.


The pistachios market remains unchanged with stable to slightly lower prices. The overall crop from USA for 2019-2020 is expected to be lesser considering “off-year.” Kernel demand has been good across USA and Europe and is providing stability to the market. The Iranian crop is expected to reduce the crop gap to some extent, though logistics and trade flow remain uncertain.


Walnut prices have been stable since the steep fall in late February, which was led by the higher stock situation in Cali-fornia. COVID-19 related pantry stocking resulted in 20% higher shipments to US domestic. Europe shipments were also up. Most California handlers believe the market had reacted too strongly to the negative news. The Chilean crop harvest started end of March. Drought seems to have had more impact than previously estimated. Early arrivals indicate a 15% volume drop over last year. The Chilean industry is holding off on offers to have better visibility on crop volume.


The market remained volatile with lower liquidity amidst the frost news, COVID-19 chaos, and an unpredictable Lira. The first flower count exercise for 2020 crop concluded earlier in March. After the flower count impact and the frost impact, 2020 crop expectation will be at best 600K, which is much lower than 2019 crop. There are now issues like larger transit times due to border control, unavailability of trailers / drivers, increase in call offs from certain manufacturers, etc. Though there is no impact immediately on demand, there is a certain uneasiness evident in the trade on how things would pan out in some months.


The latest INC International data collection shows overall macadamia supply for 2019 was up slightly. Of the major pro-ducers, Australia was down 13%, South Africa was up 3%, Kenya and the USA were both flat, while Guatemala was up 12%. China reported an increase to 28,000 MT however many reports suggest a result closer to 15,000–19,000 MT, which would make total supply flat or slightly down on 2018. For 2020, crop increases are anticipated in South Africa, Kenya and Hawaii. Australia’s crop is likely to be affected by the extended dry conditions during 2019, however it is too soon to pre-dict whether the impact will be significant. Overall expectations are for macadamia supply to increase slightly in 2020.

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