China
The domestic market is weaker since the 2021 crop harvest. Demand was reduced for the Chinese New Year because consumption was slow, especially for peanut oil. Both exports and imports are being impacted by the sea freight rates.
According to the Chinese Chamber of Commerce, the purchase of raw materials by domestic large-scale oil factories during the 2021/22 production season has been slightly higher than the average as compared to previous years. At the same time, most of the old peanut stock has been converted into peanut oil inventory. However, sales during the fourth quarter of last year, the peak consumption season, were on the low side. Thus, at the time of this writing, both raw materials and oil products inventory was large. Impacted by the pandemic, China's peanut oil consumption remained weak during 2021, while raw material imports keep growing year on year, resulting in an oversupply and the consequent falling prices. As China is the largest export market for African peanuts, their export quotation got obviously affected by domestic price fluctuations. From January to November 2021, the import of peanut kernels amounted to around 983,000 metric tons.
Based on the above analysis, after the Spring Festival, prices are expected to remain low and farmers' planting intentions might be dampened for the next season. Superimposed on the current corn and soybean planting benefits, a reduction in the peanut planted area could be anticipated.
According to the Chinese Chamber of Commerce, the purchase of raw materials by domestic large-scale oil factories during the 2021/22 production season has been slightly higher than the average as compared to previous years. At the same time, most of the old peanut stock has been converted into peanut oil inventory. However, sales during the fourth quarter of last year, the peak consumption season, were on the low side. Thus, at the time of this writing, both raw materials and oil products inventory was large. Impacted by the pandemic, China's peanut oil consumption remained weak during 2021, while raw material imports keep growing year on year, resulting in an oversupply and the consequent falling prices. As China is the largest export market for African peanuts, their export quotation got obviously affected by domestic price fluctuations. From January to November 2021, the import of peanut kernels amounted to around 983,000 metric tons.
Based on the above analysis, after the Spring Festival, prices are expected to remain low and farmers' planting intentions might be dampened for the next season. Superimposed on the current corn and soybean planting benefits, a reduction in the peanut planted area could be anticipated.
India
As stated by the USDA, based on 5.8 M harvested hectares and 1.17 MT/ha, India’s 2021/22 crop added up to 6.8 M MT, up by 9% from 2020/21. Although the harvested area in 2021 was down from 2020 by 3%, the yield was up by 4.5%. Gujarat accounted for 37% of the production, followed by Tamil Nadu (14%), Andhra Pradesh (11%), Karnataka (8%) and Rajasthan (7%). Export shipments year to date through February 2022 added to 750,000 MT (in-shell basis).
USA
The US is having the best crop ever in terms of quality and production, estimated at 2% up vs. last year. At the time of writing this report, while domestic demand remained strong (total edible 2021 was 1% up vs. 2020), Chinese demand stayed behind which may result in a big carry-over. In spite of the high cotton price, it is expected that peanuts will get a decent sowing area for the next crop as well. Due to the high input costs on corn (40% increase), a lesser corn area is anticipated. Although production is good, prices remained firm due to increased costs (e.g. inland freight doubled) and good domestic demand. There was still an imbalance logistically, due to port congestions and shortage of truck drivers.
Argentina
The ongoing crop development has been very good with good weather throughout November and December last year. January 2022 started with a lack of rain and heatwaves adding some stress to the crop. Provided good rains come later in January and February-March the crop could be a good one —it will mostly depend on the rainfall. Planted area is estimated at 395,000 ha, 4% down from the previous season and yields might also have been affected by the drought in Cordoba, the main peanut area in the country.
In relation to domestic consumption, there has been a growth of around 10% in the last three years. Referring to exports, as of 2022, export duties have been reduced, remaining at 4.5% for confectionery peanuts, 3 % for blanched peanuts and 0% for tariff 2008.11 (processed products).
In relation to domestic consumption, there has been a growth of around 10% in the last three years. Referring to exports, as of 2022, export duties have been reduced, remaining at 4.5% for confectionery peanuts, 3 % for blanched peanuts and 0% for tariff 2008.11 (processed products).
Brazil
By early February 2022, Brazil was approaching the final stages of the crop. Rains came very well and a good harvest was expected. Harvest would start with the lots planted first in October. As rains were distributed evenly throughout the crop development, good quality and low aflatoxins are anticipated.