Edible Nuts Market Report - November 2020
The cashew market continues to trade sideways with firm undertones, despite extensive buying and selling activity. On the inshell side: we have Tanzanian auctions continuing at similar levels as previous auctions and so far, around 140,000 tons have been auctioned. It is rumored that the Tanzania and Mozambique crops are going to be below expectations/earlier projections and the crop size will be smaller than the previous year. While this may not meaningfully impact the global demand and supply situation, it is keeping market sentiment firm.
We are also seeing a reasonable increase in spot purchases in the US. This could be due to some sectors opening or businesses that have not covered their requirements earlier due to uncertainty related to COVID-19. This could also be due to severe disruption in shipments around the world, which is also affecting US imports.
The almond industry is busy filling orders again this week as all the sales from previous weeks have filled the production schedules for most processors through December. While we experienced a quiet market thanks to the Thanksgiving holiday, packers are content to focus on the job at hand.
Export markets remain active as consumption remains strong thus far. Most evident is the activity in the Middle East and Europe. Additionally, the pulls from Diwali were notedly strong with expected demand to come right back soon to refill the markets.
With record shipments over the past three months and continued expectations of the same for November and December, many packers were closed for the four-day Thanksgiving weekend and are expected to close for a week between Christmas and New Year’s Day. As we close out this most difficult time in our history, we show gratitude to all our hard-working staff.
The almond industry has reached a comfortable sold position for this time year to date. We have seen some firming as a result. It should be to no one’s surprise for this firming trend to continue until we experience a significant change to demand. While it may be a quiet market on the surface, the undercurrents remain very strong.
The 2020 crop is estimated at 1.05 billion lbs. and overall supply is about 300 million lbs. higher than last year. Sizes are large and crop quality is great. Shelling stock and closed mouth percentages are down substantially, which will keep kernel prices elevated. Year-to-date shipments are lower year-over-year by 6% but the industry is well sold for Q1 and Q2. Inshells and kernels are harder to find for spot requirements. Current prices are about 15% lower than last year and are expected to boost the demand for the 2020 crop.
California’s 2020 crop is expected between 750,000 – 780,000 tons, against 650,000 tons last year. Increases in non-chandler varieties production were much higher as compared to Chandler. Year-to-date shipments are 8% higher than last year. Inshell sales in the Middle East improved in November as Iran trade opened up. Prices are about 35% lower than last year. Walnuts are known for price elasticity, and industry is expecting November and December to be very strong shipment months. Most expect the prices to rebound from current record low levels.
From National Agricultural Statistics Service as of November 22, 2020 - USA peanuts harvested are 93% this week, 85% last week, 95% last year and are in line with the 93% 5-Year Average. The national tonnage report is showing 2.787 million tons received. Broker John Reed stated “… it appears, according to USDA, the crop is just about done in the southeast. If so, the paperwork is way behind. FSIS reflect receipts at only 81% in the southeast. V/C continues to fight the wet weather to get the crop in and the southwest continues to harvest well into December (about normal for them).”
The expectation of crop size has decreased again with one broker stating that an estimation is now expected to be closer to 3 million tons (Smith, 11-23-2020) and while that is enough peanuts it does not leave an abundance of product.
All eyes will begin to turn to the estimate of 2021 crop estimates that will be released by NASS in March of 2021. This number will have an impact on market prices for the 2nd quarter of 2021 and will be heavily influenced by the price of cotton (Dec 2021) which continues to fluctuate but seems not to be able to break the .72/lb. level.
The macadamia market has been very active for the last few weeks. While on the growing side, focus is shifting to upcoming new harvest in Q1 of 2021, trade has been majorly active around China and Southeast Asia as demand has built up due to Chinese New Year. The weather conditions have been good so far with increases in planted hectares in both Australia and South Africa. It is estimated that Australia’s 2021 crop might exceed 50,000 MT NIS which represents over 20% increase year-on-year basis. The demand in China and Southeast Asia has been good but still less than compared to last year during the same period. There have been some instances of cargos being re-routed to other markets due to less offtake. The prices remain largely stable with negligible holding inventories at origin and active trade at destinations. For the next few weeks, markets are expected to remain in balance with no major surprises.
Arrivals of quinoa in Peru were slow due to political unrest and protest around the country, even though on the sales side buyers have started to inquire and fill few of the production slots for December and for Q1 of 2021. New sowing for quinoa and chia has been initiated in most parts of Peru and Bolivia with a few hiccups for a week because of the unrest but sowing activities are back on track.
Exports after experiencing reduced numbers in Q3 have seen some recovery in October and November, but a strong pull is yet to be seen due to slow markets both in the USA and Europe. While the market continues to be quiet because of holiday weeks, buyers are mostly focusing on spot demand in hand.
Prices were impacted a bit with several offers to push and secure sale for November and December in a sedated market scenario, but overall prices are expected to remain stable or increase slightly in December or Q1 next year as off-season months are approaching. The next harvest will occur in May of 2021.