Peanuts

October 1, 2018

The Argentinean peanut industry is suffering at the moment on all fronts. The export rebates were lowered, export taxes were imposed and all of this on top of enormous losses on production and quality on the 2017 crop.
Surprisingly, the market has yet to fully react to those problems. Sellers have moved their prices up but buyers have not reacted to it. It seems that the unusual high supply from Brazil this past year, the good quantity and quality of the US 2017 crop and the expectation of a good 2018 US crop have kept a lid on the market.
The biggest issue Argentina now faces is the quality coming into the backend of the marketing season and whether they’ll have enough in spec product to fulfil their current contracts.
From the supply side, the Argentinians should begin planting shortly. However, due to the losses felt last year and the fact that other crops remain more profitable to plant, shellers are saying that up to 20% less area may be planted. We’ll need to wait and see what the final size of the US, Chinese and Brazilian crops are before we can determine what impact this will have on prices.