In West Africa, the remaining flows are only those from Benin and Guinea Bissau. About one-third of Benin crops are expected to arrive, but quality has been extremely low with out-turn not coming beyond 43/44 pounds. Half of the Guinea Bissau crops have arrived and the remaining half are expected in the next three to four weeks. The out-turn remains with 52+ pounds high and priced accordingly. Overall, West Africa crops have experienced a challenging season from unpredicted dry conditions at the beginning, to heavy rainfalls during harvest time. It remains to be seen if La Niña will continue to impact future West Africa crops as well.
Vietnam and Cambodia’s local crops are now in the hands of processors against their commitments. The Vietnam processing industry still needs coverage for their needs in the second half of 2022, playing a role in the market demand.
India is getting ready to cover for their main seasons and has already seen an active in-shell purchase season. Mixed news is circulating regarding the local crops, but it is likely that the majority of these crops are in strong hands.
With the increasing cost of living, including the cost of food items, we have seen lower consumption in main destination markets. The decrease in consumption is a large-scale hit, compared to fresh fruits and vegetables which have had a significant price increase on the shelves. As expected, consumers have reacted, and we must monitor how purchasing behavior will play out for the rest of the year.
The pandemic continues to put governments in a dilemma, and we may see increased restrictions this fall. If restrictions come into force again, we may see consumers shifting back to their 2020-2021 pandemic consumption habits; a return to healthy snacking at home. While the industry forecasts remains unclear, there are signs the coverage pipelines are to be low, hence more activity is expected to happen in the upcoming period.
Factors to Watch:
- West Africa crops are at their end and have traded in average at higher levels versus last year
- India and Vietnam processors will need coverages for the second half of the year production and are waiting for demand to enter
- Supply disruptions, vessel/container restraints and local pandemic restrictions continue to impact kernel production
- Overall, quality of northern hemisphere crops were well below expectations
- Consumption hasn’t picked up in June, and could be disappointing as well during the remaining summer months
- US/Europe markets remain fairly inactive for nearby needs
- Consumers are spending under pressure and may lead to less demand in the near future