Brazilnuts Latest news - 22.12.2011
Although the 2011 crop was more or less sold out two months ago, demand has virtually come to a standstill and there is a clear indication that consumers do not accept these excessive price levels. Despite only a handful of containers being offered in recent weeks, prices have started to soften. This downward trend is needed as the new crop collection is beginning now and it is crucial that factories buy raw material at considerably lower prices. As always with raw material markets, once a price is set, it is very hard to reduce it later. In terms of predicting what will happen in the future we would like to think that the price of Brazilnuts could again have a 3 at the beginning – however we would like to make clear that despite the high prices this year we do not see any investment at all by the industry in Bolivia to increase the potential crop collection. Statistics show that we had production of kernels at about 20.000 mton for the last two years and we are afraid that there is not much potential for this to increase without new investment in collecting infrastructure. Weak demand is the only way to get prices down, which we hope will be the case over the next couple of months. Our recommendation is to wait for forward covering as there is a big potential for prices to fall.