• Brazil nuts August 15, 2019

    Over the last month factories who were in desperate need of money to cover overheads and pay back loans have been accepting lower and lower bids which were below their cost to produce. After a period of buying taking place, factories have either sold out for the season or have generated enough cash flow to allow them to wait out and try to sell at levels closer to their cost. So the number of sellers in the market has reduced considerably

    So why did the prices rise in Q1 and why did they fall?

    The price rise

    • Strong demand for raw material from factories who needed to process.
    • High prices of 2017 normalised the raw material prices increase, factories and raw material providers were used to pay significantly higher prices.
    • There was an expectation that the crop was going to be down compared to an average crop. This is still the case and we believe to be true.
    • The largest exporter who faced challenges during 2017 withdrew from the market for nearly 3 months causing a vacuum of offers.

    The price fall

    • Buyers who also experienced the price rise in 2017 covered their volume for the year as soon as possible and then stopped buying
    • Once the flow of material to factories improved and went back to normal all factories began again to offer but buyers had either covered or did not want to pay high prices.
    • South Korea who for the last few years had been the saviour stopped buying altogether
      • Jan to May 2018 South Korea imported from Bolivia  1,328 MT in the same period in 2019 they bought 3MT
      • Jan to June 2018 South Korea imports from Peru 2,063MT in the same Period in 2019 they imported 977MT
      • Overall South Korea is down by 71% compared to 2018

    What’s next depends on demand,

    • Most buyers are covered till Q1 deliveries
    • Many factories will close 1 – 2 months early and some may close 4 months early
    • Some factories are fully sold for the year and others still need to market their goods

    At the moment it fells like a balance has been found which created a steady flow of business being concluded to cover the reduced demand with the limited available offers. If demand remains slow until October, factories may start again to reduce prices as the new crop will not be far off and they will need to pay off loans in order to finance the collection once again however, if demand picks up there will be very limited availability.

    Shippers who are in the market and basing offers on their costs are quoting $3.40/lbs FOB but as this is quite a jump we do not believe it has traded.

  • Brazilnuts October 06, 2016

    The smaller factories have already finished production as they were unable to get more raw material due to the short crop. Remaining mid to large sized origin factories/ sellers are currently withdrawn from the market, trying to establish their exact remaining inventories in order to make sure that they do not over sell.  As a result the market is firm with very limited availability, with offers only from resellers. Price may remain firm until Q2, 2017 when we would get supply relief with new crop material being available.

  • Brazilnutkernels December 21, 2016

    The market for Brazilnutkernels is not very easy to judge at the moment. The facts are as follows:

    Stocks in Europe and USA are limited so prices for spot material are firm and nearby positions will be firm.

    Till new crop arrives to the market, any new demand may spark price increases as physical material will be tight in supply.

    All factories in Bolivia are (still) closed as they have no more old crop raw material to process.

    There were some rains, but that did not result in crop to be collected. Further rains are expected after which collectors will go into the jungle to start collecting. Any early crop coming out now is not sufficient yet for processors to start up.

    Right now it is impossible to judge the new crop volume, timing is not right.

    Most factories will start processing January/February for shipment March/April from the port.

    Caution with rain of course are the road conditions. When there will have heavy rains, the road to Arica might be damaged (again) and first new crop shipments delayed.

    Typically, first new crop arrives in Europe during May/June, it is unlikely for (serious) volume to arrive earlier.

    Summarizing: we have to deal with the current inventory until new crop arrives, which is likely around May/June 2017. Premiums are expected to be paid by the factories for first new crop raw material, to allow the factories to start processing. Price wise, one may anticipate kernel prices for first new crop arrivals to be at a slight discount to current crop material (SPOT market).

    It is our recommendation to be covered until Jun/Jul at least and probably take a partly cover for Q3 of 2017.

  • Brazilnuts January 26, 2017

    The high prices at the end of 2016 crop resulted in a high raw material price for the new crop. As factories at the end of 2016 shut early they have started this season well financed and ready to purchase. This eagerness alongside rumours that the crop could be short has pushed raw material prices up further. Shippers at origin are currently withdrawn from the market. When they return we expect that prices will have increased.

  • Brazilnuts February 9, 2017

    The market of Brazilnutkernels is very difficult at the moment. Supply of inshell nuts from the jungle is very limited and prices are pushed up.

    Spot availability is also limited while this has to fill the gap until new crop, expected to start shipping April/May. It won’t be an easy season and our recommendation is to cover when you can although it will be difficult to find offers.

  • Brazilnuts February 23, 2017

    The brazil market is unfortunately not getting easier. Stocks are very small and it is still quite a while to go before new crop product will arrive. Short shipments are the main reason for this and caught a lot of importers by surprise. It doesn’t really look like new crop is going to bring any relief. Raw material prices in origin are firming by the day due to incredible competition. There are hardly any offers from the factories since they are uncertain about the quantity and quality. It looks like a market where it is wise to book your early needs if possible as prices can currently only go one direction and that is up.

  • Brazilnuts March 8, 2017

    The market of Brazilnutkernels is very difficult. Each day prices are going up. There is some raw material available but prices are going up. It is for sure that the crop is down because of El Nino. The indications we get is that the crop might be down by 40-50%. This will have a serious impact on the supply and cause further increasing prices unfortunately.