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Pecans: US production cannot meet demand

August 26, 2021 at 10:22 AM, Der AUDITOR
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ATLANTA. As Pecan Report explains, it is becoming increasingly difficult for US farmers and producers to meet the high demand. For this reason, more raw nuts have to be imported from other origins.

China plays a leading role

As the experts at Pecan Report state, the pecan industry in the USA has been struggling for more than a decade to adjust its growth to the steadily increasing demand. The gap between supply and demand had narrowed briefly when China exited the market in the wake of the trade war. The US market expanded then, and with China's re-entry into the market, this gap is now wider than ever. China is particularly interested in buying in-shell pecans.

Large time gap between planting and production

The supply gap that the USA has to cover with imports is therefore getting bigger and bigger. In the current 2020/21 season, it amounts to a good 40,370 mt so far, but will widen considerably by the end of the season. In the 2019/20 season, US producers had supplied a total of just under 107,954 mt of raw nuts, while exporters had to meet enquiries of about 167,829 mt. The imports needed to bridge this gap were therefore just under 60,000 mt. Imports come mainly from Mexico, South America and South Africa. While US farmers are eager to increase their acreage and reduce imports, the problem is that it takes an average of ten years to get a pecan plantation up and running. According to the Pecan Report, scientists at the University of Georgia, for example, are trying to develop pecan varieties that can be produced more quickly. Cost is still the biggest problem.

Exports to Asia on the rise

Exporters can be satisfied with this season's shipments so far, which are 11,340 mt above those of the 2019/20 season, as reported by the American Pecan Council. Contributing to the higher shipments have been relatively cheap commodity prices, as well as the higher buying interest from China. Overall, traders are registering higher demand from Asian countries, especially from South Korea in addition to China. Shipments to Europe, however, have only risen slightly, while domestic consumption in the USA has increased significantly in recent years.

Prices on the European spot market are holding steady for the time being and are unchanged at EUR 9.75/kg FCA Spain for Fancy Junior Mammoth Halves from the USA.

US Pecans

Type

EUR/kg

Shelled, Fancy Junior Mammoth Halves

9.75

Shelled, Fancy Mammoth Halves

10.30

Shelled, Junior Large Pieces

7.20

FCA Spain

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