Which were the main difficulties faced by the peanut market in 2023? What has changed compared to the last two years?
In the year 2023, the peanut market has certainly demonstrated a remarkable level of stability despite facing challenges from various global economic uncertainties and the ongoing recovery from the impacts of the COVID-19 pandemic. This resilience was notably supported by a significant increase in global peanut production, ensuring a steady and well-supplied market. The global appetite for peanuts remained strong, showing little indication of diminishing. In fact, there was a discernible upward trend in peanut consumption across many regions worldwide. This suggests that despite the broader economic and health challenges, the demand for peanuts continued to rise, contributing to the overall stability of the peanut market in 2023.
What impact do the wars in Ukraine and Israel have on the peanut market? Are the political tensions in various African countries also a cause for concern here?
The peanut market is currently facing challenges, marked by a decrease in acreage, unexpected rainfall, reduced crop yield, and heightened vulnerability at the farmgate. Additionally, the inflationary pressure is causing an increase in the market price of peanuts. While the situation in Ukraine contributes to the overall challenges, it is not the primary concern in the Indian peanut market. Political tensions in Africa did not impact the peanut segment, as significant exports from regions like Mozambique played a crucial role in ensuring an ample supply of African-origin peanuts this year.
In 2023, climate change and its impact on global commodity production was felt like never before. What should growers and market players be prepared for in the coming years?
Unstable weather conditions and temperature fluctuations have negatively affected the growth, harvest, and supply of crops in major exporting regions. This has resulted in a tightening of agricultural markets. Experts predict that these climate-induced disruptions will worsen over time. In response to these developments, peanut growers and market players should anticipate the following in the coming years:
- Increased volatility in food prices: The ongoing impact of climate change on global commodity production is expected to make food prices more unpredictable. This may exert pressure on both economically disadvantaged countries and individuals in wealthier nations.
- Tightness in agricultural markets: The adverse effects of volatile weather on crop growth, harvest, and supply in key exporting regions may lead to a tightening of agricultural markets, posing challenges for growers and traders.
- Climate-induced disruptions to the global supply chain: The escalating frequency of extreme weather events worldwide, from floods to wildfires, is posing a threat to the global supply chain.
Commodity prices have risen significantly in many markets for another year in a row. Inflation and higher production costs are leaving their mark; the peanut market is no exception here. Do you think consumers will look for cheaper alternatives in the long run?
The worldwide demand for peanuts remains robust, and consumption is increasing across many regions. Peanuts are extensively grown, processed, and consumed globally. Projections, even on the conservative side, suggest that global cultivation could reach 68 million mt by 2050, as per the UN's Food and Agriculture Organization. Nevertheless, considering the variety of nuts available and the introduction of new peanut products like cold-pressed peanut oil, there is a possibility that consumers might explore more affordable alternatives in the future. It's worth mentioning that after the COVID-19 pandemic, consumers prioritize health over price. They are willing to invest more in value-added peanut products for the sake of health consciousness.
Looking at the current market situation, what challenges might the peanut market face in the 2024/2025 season?
Central purchases: Regulatory decisions, such as those related to central purchases by organizations like NAFED, may impact the market dynamics.
Non-development of seed banks for storing & development of new seeds: Inadequate progress in establishing seed banks for storage and the development of new, resilient peanut varieties may pose challenges for growers.
High yield / High drought resistance seeds still under process: Delays in the availability of high-yield and drought-resistant seed varieties could affect productivity and resilience in the face of changing climatic conditions.
Promoting low oil content variety seeds: Encouraging the cultivation of low oil content varieties might be a strategic move to address market demands and preferences.
Export promotion or subsidy schemes: Policies related to export promotion and subsidy schemes may influence the competitiveness of peanuts in the global market.
Introduction of better packaging and assistance: Innovations in packaging and support mechanisms could become essential for maintaining product quality and market competitiveness.