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Peanuts: Suppliers are putting off European buyers

February 20, 2017 at 11:53 AM , Der AUDITOR
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BUENOS AIRES. Quality concerns are proving a disaster for sales in the European market. And the top producers are certainly struggling. To make matters worse it seems as if disaster is about to strike while demand in Germany is on the rise.

Argentina, the USA and Brazil are currently having great difficulties selling their products to the EU due to quality issues.

Argentina increases exports to Germany
The most recent import figures for Germany show that Argentina has gained in importance last year. It is, however, highly uncertain if this trend will continue in 2017. The problem being low quality and dwindling demand from Europe. Continuing rains had considerably delayed the harvest last year and concerns have been voiced that there will be similar problems this year. There currently is, however, no real cause for concern since the temperatures are normal for the time of year and there has been sufficient rain. Current production estimates are ranging from good to very good.

Peanut imports to Germany in mt

country

2014

2015

2016*

Argentina

74,000

76,668

83,201

Netherlands

7,645

13,613

12,791

USA

10,870

5,314

7,463

South Africa

4,257

5,358

6,057

Poland

1,448

1,797

2,081

China

1,641

1,560

1,976

source: Federal Statistical Office   *estimate

 

US suppliers are putting off buyers
Considerable differences in price are currently putting off potential buyers from the EU. It seems as if many US suppliers are not interested in shipments to the EU. The main reason is the high degree of aflatoxin contamination, which makes it impossible to export to the EU. Estimates for the 2016 US production have, in addition, dropped form 3.1 M mt to less than 2.6 M mt. With acreage amounting to 1.65-1.67 M mt acres this year production is estimated at 3.2 M mt.

China is struggling
Rumour has it that China has produced less than the previously estimated 15-17 M mt. The oil mills are currently driving up upcountry demand. The weak RMB has made USD imports more expensive. Most imports are intended for the processing industry.

Upsurge in production in India
While other countries are confronted with quality issues and lower productions, the situation is completely different in India. The USDA reckons that the 2016/17 production in India will increase by as much as 41% year-on-year – namely to 6.3 M mt. This is because many farmers have switched from cotton to peanuts since the plants are more resistant and the profits larger. Exact production estimates still, however, need to be published. The harvest was making very good progress in Mid-January. But less than two weeks later the continuing dry weather had caused considerable delays and the progress was 20% below average in the southeast.

Peanut production in mt

country

2014/2015

2015/2016

2016/2017

China

16,482,000

16,440,000

17,000,000

India

4,855,000

4,470,000

6,300,000

Nigeria

3,413,000

3,000,000

3,000,000

USA

2,354,000

2,722,000

2,579,000

Sudan

963,000

1,871,000

1,400,000

Burma

1,375,000

1,375,000

1,375,000

Argentina

1,188,000

930,000

1,200,000

Indonesia

1,150,000

1,130,000

1,125,000

Senegal

669,000

1,067,000

1,000,000

others

7,378,000

7,315,000

7,257,000

total

39,827,000

40,320,000

42,236,000

source: USDA

 

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