1. Weekly News

Global

USDA's Nov-24 WASDE Report Forecasts Global Oilseed Production Decline, Including a Decrease in Peanut Output

The United States Department of Agriculture's (USDA) Nov-24 World Agricultural Supply and Demand Estimates (WASDE) report forecasts a reduction in global oilseed production for the 2024/25 financial year (FY), including a 0.94 million metric ton (mmt) decrease in peanut production, bringing the total to 682.2 mmt. This decrease is part of broader reductions, including soybeans, sunflowers, and rapeseed. For peanuts, the global outlook has been adjusted in response to lower yields, reflecting changes in the global supply-demand balance. Market attention is now on the impacts of these reduced forecasts and continued pressures on oilseeds markets from factors such as weather and trade dynamics.

India

Farmers in Yadgir District Prioritize Peanuts for Rabi Season, 66% of Target Area Sown

Farmers in the Yadgir district of Southern India have prioritized peanuts as a major crop for the Rabi season, with 66% of the targeted 18,548 hectares (ha) already sown. The total sowing target for the season is 41,540 ha, with 48.74% of the area covered as of W46. Suitable for dry and irrigated lands, peanuts have been chosen due to favorable conditions following crop losses during the Kharif season. Other crops being sown include jowar and Bengal gram. The Agriculture Department & Farmers Welfare (DA&FW) has ensured the availability of necessary seeds to support farmers throughout the season.

Tajikistan

Tajikistan and China Strengthen Trade Ties, Focus on Expanding Agricultural Exports

Tajikistan and China are strengthening trade ties, focusing on increasing Tajikistan’s agricultural exports, including peanuts. During a meeting between the Director of Tajikistan’s Export Agency and the Counselor for Economic and Trade Issues at the Chinese Embassy, the potential for expanding exports to China was discussed. Products like peanuts, apricots, raisins, and honey are in high demand in China. Key topics included improving logistics services, enhancing packaging methods, and addressing regulatory requirements for Tajik exporters. Both parties agreed to expand the export list from four to 12 agricultural products, with further efforts to streamline customs procedures and attract investment in agro-logistics.

2. Weekly Pricing

Weekly Peanut Pricing Important Exporters (USD/kg)

Yearly Change in Peanut Pricing Important Exporters (W46 2023 to W46 2024)

India

India's peanut prices have decreased to USD 0.68 per kilogram (kg) in W46, reflecting a 1.45% week-on-week (WoW) drop and an 11.69% year-on-year (YoY) decline. This decline can be attributed to the high volume of the current peanut crop, which has led to oversupply pressures on prices. While the Diwali Festival provided a brief pause in price declines, the overall trend suggests continued downward pressure on pricing. The sustained high crop volume may continue to weigh on prices unless demand increases or production decreases, potentially leading to further price softness in the near term.

United States

In the United States (US), peanut prices decreased to USD 0.54/kg, marking a 6.90% WoW and a 12.09% YoY decrease influenced by domestic supply-demand dynamic and export market conditions. The USDA's forecast of a 0.94 mmt reduction in global peanut production for 2024/25 may support US prices in the short term by reducing global competition. However, if oversupply persists in key markets like India, where prices have declined 11.69% YoY, it could exert downward pressure on US exports and future pricing. Additionally, high crop volumes in Brazil, expected to increase by 40.6%, may introduce further competition, potentially stabilizing or reducing US peanut prices in the medium term. To maintain favorable pricing, US producers may need to focus on value-added peanut products and explore emerging export markets with strong demand.

Brazil

In W46, Brazil's peanut prices reached USD 3.18/kg, reflecting a slight 0.95% WoW increase but a 0.63% YoY decline. While current prices are relatively stable, Brazil is set to achieve a record peanut production of 832,300 metric tons (mt) for the 2024/25 season, marking a 40.6% increase from the previous harvest. This surge in production is likely to exert downward pressure on prices in the medium to long term, particularly if the higher yields lead to a supply surplus, potentially outpacing domestic and international demand.

4. Actionable Recommendations

Explore Alternative Peanut Sourcing Regions

Given the reduction in global peanut production and the potential for continued supply pressures, importers should explore alternative sourcing regions to maintain stable supply chains. With rising production in countries like Brazil, despite current stable pricing, it is prudent to establish relationships with emerging peanut exporters, such as Tajikistan, where trade ties with China are strengthening. This could provide access to more competitive pricing and a broader range of suppliers, helping to mitigate supply disruptions and price volatility.

Monitor Domestic Peanut Production Trends

As India experiences oversupply and a decline in peanut prices, companies should closely monitor domestic peanut production and market conditions to adjust their purchasing strategies. Engaging with Indian farmers and exploring sourcing opportunities during high crop volumes may allow businesses to secure favorable pricing. However, given the potential for price softness, companies should consider long-term contracts to lock in stable prices and reduce exposure to fluctuating market conditions.

Invest in Value-Added Peanut Products

With pressures on global peanut markets from increased production in countries like Brazil, businesses should focus on creating value-added peanut products to diversify revenue streams. By investing in peanut processing capabilities for products like peanut butter, oil, and snacks, companies can add value to raw peanuts and reduce their exposure to price fluctuations. This approach also aligns with growing demand in emerging markets, such as China, where peanut exports are increasing, providing additional opportunities for businesses to expand their product offerings.

Sources: Tridge, East Fruit, Grain Trade, the Hindu