RSS
Twitter
Linked In
News In
Features
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Nut prices, elevated by weather setbacks, 'to stay high'

Twitter Linkedin

It pays to know your nuts.

Grain prices may be in the doldrums, but nut producers are poised high prices for years.

As long, that is, as they are growing the right type – the so-called "noble" ones, grown on trees, rather than the ground ones, such as peanuts, for which prices are shadowing those of other field crops lower.

Peanut prices last month averaged $12.30 a hundredweight in the US, down 15.8% year on year, on US Department of Agriculture estimates.

However, prices of almonds, hazlenuts, pistachios and walnuts are up 10% or more.

And, according to Sunny Verghese, chief executive of Olam International - which sold more than 1.5m tonnes of edible nuts and spices in the year to June, taking earnings before interest, tax, depreciation and amortisation (ebitda) of Sing$362m ($290m) – values are poised to remain high.

'Common man's nut'

"Peanuts is a mass nut, common man's nut, it is under price pressure because of excess production and supply," Mr Verghese said, citing in particular the US where growers, looking at record corn and soybean yields, have good production prospects for the nut too.

"We've had a significant growth in crop and therefore availability and supply."

The US is expecting a 22% jump to 5.07bn pounds in peanut production this year.

Rising almond prices

However, for almonds, the USDA estimate for production of 2.1bn pounds is believed to be heading for a downgrade thanks to a lack of rainfall in California, which is responsible for some 80% of world production, but of which 100% is rated by official data as being in drought.

"The subjective estimate of the US Californian crop is is now estimated at between 1.9bn pounds and 1.95bn pounds," Mr Verghese said.

"That has therefore supported almond prices, so almond prices are trading at a fairly historical high at this point in time."

For cashews, "we have the same - prices are also constructive at this point in time, trading in the range of $3.25-3.45 per pound for the reference grade".

'Nuts on a tear'

Meanwhile, for hazlenuts, Turkey, the top producing country, is causing a spike in prices, with a late frost, in March, spoiling crop prospects.

"As a result, hazelnut prices have gone on a tear," Mr Verghese said, pegging them at about 21 Turkish lira a kilogramme, up from 11-12 Turkish lira a kilogramme a year ago.

"So it's a massive ride up in prices because of a significant short crop in Turkey as a result of the frost situation."

Price outlook

He added that pistachio prices "are trading at elevated levels. Walnuts are trading at elevated levels. Macadamias. So the entire complex is trading at quite high levels."

And Olam believes that "in the next few years we will see fairly strong prices because supply response in these commodities are difficult to bring onstream because of the long gestational nature of these commodities.

"For pistachios, it takes 11, 12 years to get to full maturity. Walnuts take 10 years to get to full maturity.

"So after you plant, you have to wait for a long time to get the incremental supply."

In the meantime, you might find high baklava and marzipan prices baked in.

By Agrimoney.com

Twitter Linkedin
Related Stories

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too

Evening markets: ags overlook crumbs of comfort in Wasde to set fresh historic low

The Bcom ag commodity subindex ends at a fresh record low, as US export fears overtake upbeat interpretations of corn, cotton estimate revisions

Abares lifts hopes for sugar futures, but cuts its cotton price forecast

A downgrade to Australia curtails an upgrade in world sugar output expectations. But for cotton, Abares ditches ideas of a global production deficit

Evening markets: Ags poop party lifting other commodities, shares

Wheat futures set another contract low, while arabica coffee hits its weakest close but one in 19 months, despite buying in other asset classes
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069