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Trade4go
Mar 28th, 2025
Original content
Peanuts are one of the sectors currently performing well in terms of price stability, increased production, and rising exports in Argentina, as indicated by the Intercooperative Agricultural Confederation's (Coninagro) Mar-25 report on regional economies. The improvement in the peanut sector is attributed to prices that have increased slightly above inflation, despite rising costs. Additionally, exports are up and the planted area has grown, resulting in higher production. Overall, peanuts are one of the three sectors—along with pork and tobacco—classified in the "green" category due to positive developments in business, production, and market components. This sector's performance is supported by a favorable price trend, stable costs, and an increase in both production and exports.
Despite favorable production conditions, the Chinese peanut market is experiencing price softening, mainly due to sluggish demand for peanut oil. Export opportunities are being discussed, contingent on stable freight rates. Global consumption trends are a key factor, as any increase in demand could prompt a shift in China’s approach. Competitive pricing from Argentina and Brazil has led to speculations that China may resume importing high oleic peanuts if supply conditions remain stable. The direction of this market shift will depend on external dynamics and the ability of Chinese importers to secure favorable deals.
India's peanut prices are experiencing mild gains, with market activity expected to increase over the next few weeks. Fluctuations in the edible oil market, driven by United States (US) tariffs and subsequent responses from affected countries, are indirectly benefiting Indian peanuts. Recent price drops in sunflower, palm, and soybean oils have reversed, causing uncertainty in the market and leading traders to avoid large procurements, shifting focus to peanut oil instead.
Demand from China has surged rapidly, resulting in a 4 to 5% increase in ground-level peanut prices, which will likely affect international prices in the coming week. Additionally, reduced stock levels due to state government purchases and a 25 to 30% decrease in arrivals—particularly in Uttar Pradesh—have tightened supply. Daily arrivals have dropped from 75,000 to 80,000 bags to just 15,000 to 20,000 bags. Given these conditions, it is advised to make small, regular peanut purchases rather than large investments.
A US senator is advocating for the restoration of funding to the University of Georgia’s (UGA) Feed the Future Innovation Lab for Peanut (FTFIL), following cuts to US Agency for International Development (USAID) programs. The lab, which has supported agricultural research to enhance peanut yields and combat crop disease, has been a key resource for Georgia’s peanut farmers. In 2023, USAID announced a USD 15 million investment, but the program was recently terminated. The senator is pressing for a prompt response from USAID regarding the termination and is also working to support Georgia’s farmers through disaster relief efforts, such as securing funding for Hurricane Helene recovery.
US peanut prices fell to USD 0.51 per kilogram (kg) in W12, reflecting a 16.39% week-on-week (WoW) decrease and a 15% year-on-year (YoY) decline. The downward trend is influenced by market uncertainty over the upcoming peanut crop, as farmers weigh planting decisions amid cotton price fluctuations. If cotton prices remain weak, peanut acreage may stabilize or expand, potentially sustaining lower prices. Additionally, concerns over crop quality due to limited rotation could affect long-term supply dynamics. Buyer strategies remain mixed, with some securing early contracts while others anticipate further declines. Meanwhile, trade flow disruptions from tariff adjustments may add volatility, particularly in exports to key markets like China, Canada, and Mexico. If supply pressures persist and demand remains cautious, prices could remain subdued in the near term.
Brazil's peanut prices decreased to USD 3.05/kg in W12, reflecting a 2.24% decrease WoW but a slight 0.33% increase YoY. The price decrease is primarily due to weather conditions, with farmers seeking drier conditions to ensure a smooth harvest. A prolonged rainy season could complicate harvesting and potentially reduce yields, impacting the overall production volume. After a weak crop last year, exporters are eager to recover, with many adjusting their pricing strategies in anticipation of improved production. Aggressive pricing, especially in non-European markets, is being employed to regain competitiveness, which could disrupt traditional supply channels from the US and Nicaragua. This shift may lead to market volatility as Brazil competes for market share, particularly in regions that typically rely on other exporters. The full impact on prices will become clearer as harvest conditions evolve.
Given the positive performance of Argentina’s peanut sector, characterized by price stability and increased production and exports, stakeholders should explore new international markets, particularly in Asia and Europe. Argentine exporters can take advantage of competitive pricing and rising global demand by establishing strategic trade agreements and increasing market outreach. Collaboration with local partners and participation in international trade fairs could enhance market penetration and ensure sustained growth in export volume.
The volatility of India’s peanut market, fueled by supply tightness and rising demand from China, suggests that purchasing strategies should be adjusted to avoid large bulk investments. Businesses should adopt a flexible procurement approach, opting for smaller, regular purchases to mitigate the risks associated with price hikes. Additionally, leveraging forward contracts and price hedging could help manage costs while ensuring a steady supply of peanuts for processing and export.
With Brazil intensifying competition by employing aggressive pricing strategies to regain market share, US peanut producers and exporters should focus on improving their supply chain efficiency. This can include investing in storage infrastructure to manage inventory more effectively and mitigate the impact of harvest variability. Additionally, strengthening relationships with key buyers in non-European markets could protect against price volatility and ensure competitive positioning in the global peanut market.
Sources: Tridge, Mundus Agri, Americus Times-Recorder, Todo Agro
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