The market is not so active and prices are stable.....
There is currently not a lot to report on macadami....
The market was slow as the other markets of nuts w....
With most packers being closed during the period o....
The market for Turkish hazelnuts is one of the few....
Market for the whole cashew nut kernels went up du....
Earlier this week we visited South Africa again fo....
Marketwise not a lot is happening. The past season....
Demand for conventional product from Eastern Europ....
The Turkish export market is rather silent at the ....
Prices for pecannutkernels are stabilizing. While ....
Prices of cashewnut kernels went into ‘the rolle....
Most of the 2018 crops are sold, that counts for p....
The demand for Christmas deliveries is slowing dow....
The market for Turkish hazelnutkernels remains sta....
Although the export figures remain (nearly) the sa....
The market of cashewnutkernels returned to calm wa....
Last month we updated you on the situation in Chi....
The pressure on prompt deliveries from Eastern-Eur....
The Turkish market remained silent during the last....
The prices for Brazilnutkernels are stable at the ....
Due to the hurricane which hit Georgia, sellers ar....
The prices of USA Almonds are stable. Processors a....
The prices for cashewnutkernels came down signific....
This time we happily update you from the Internati....
Hurricane Michael was a very strong storm that ran....
Most of the urgent needs for product from Eastern ....
The course of the market seems to be changed after....
Riberalta experienced heavy rain last week causing....
Prices of cashewnutkernels came down another coupl....
The macadamia market remains pretty much unchanged....
Prices for raw material in Eastern Europe seem to ....
As for many items also brazilnut prices have been ....
Like most markets also the market of cashewnutkern....
The market in China is not easy for NIS. Specifica....
The prices of Pecannutkernels are reaching quite a....
The Turkish hazelnut market represents the most vo....
Traditionally, buyers start to look for some first....
The cashew kernel market is stable during past two....
There was slightly more kernel activity recently, ....
Jan - June 2018 exports from Bolivia, Peru & B....
An important driver for the Turkish hazelnut marke....
After some interesting days with quite some demand....
Typically, we go into somewhat quieter times on ma....
The market of Brazilnutkernels is quiet. Packers a....
Based on the current information, i.e. bigger crop....
Eastern Europe is having excellent weather conditi....
Despite favourable weather conditions and only one....
In the figure you see the decline of prices for th....
Last weeks we have been busy trying to understand ....
The export volumes from origin are breaking all re....
In our market report of last week, we announced th....
In the figures enclosed we see the US crop, import....
First forward options from Eastern Europe are rece....
The export market for Turkish hazelnuts remains ma....
Over the past days/weeks we have seen prices comin....
The NASS Objective Almond crop estimate was announ....
The market of cashewnutkernels is not an easy one ....
Recent weeks have been a complete mess in the maca....
The market of pecannutkernels is relatively stable....
Eastern European packers seem to be on silent mode....
The private market is basically empty, putting the....
The market of cashewnutkernels is not so easy thos....
The situation on macadamias remains unchanged and ....
In the 2nd half 2017 and beginning of 2....
The prices of cashewnutkernels came down further, ....
The transition to new crop is currently really cau....
Taking in consideration exports from Bolivia, Peru....
The market of Pecannutkernels is stable. Most buye....
We didn’t see a lot activities from Eastern Euro....
The liquidity in the private market is at very thi....
After an increase in cashew kernel prices over the....
With the season now in full swing factories are bu....
The situation in the market remains unchanged. Qui....
The downwards trend, which we’ve seen at basical....
The Turkish hazelnut market isn’t very active, d....
The prices of cashewnutkernels are firming a littl....
There is not a lot to report on macadamias at ....
The prices of Pecannutkernels are stable. Most of ....
During the 2nd half of April containers....
First batches of US and Chilean origin materia....
We don’t see a lot of activity on the Turkis....
The total shipment figures (export and domestic) c....
The market of cashewnutkernels is quite interestin....
There is not a lot to report on macadamias at the ....
First batches of US and Chilean origin material ar....
We don’t see a lot of activity on the Turkish do....
The first (unofficial) crop reports will come out ....
The total world supply is looking promising. Due t....
The macadamia market is currently quite hard to re....
As a lot of product is committed to the processors....
There is quite a wide gap between spot available p....
The price drop which we have seen from Eastern Eur....
Not a lot of activity is seen on the Turkish expor....
The last week(s) have been quite good for the deve....
The prices of cashewnutkernels are under a bit of ....
The past weeks have been quite active on macadamia....
The Eastern European market remains dull. Some sup....
Market in Bolivia is very interesting, Bolivians a....
The prices for USA Pecannutkernels are going up at....
The sentiment of the Turkish hazelnut industry see....
Due to the frost they have had in California, sell....
Prices of RCN remain firm because the Indian proce....
Over the past week the crop forecasts from both So....
We haven’t seen a lot of movement in Eastern Eur....
After we spoke about no signs of interference of t....
Due to very cold weather conditions during bloom, ....
SPOT stocks in the countries of destination are ve....
The market is still quite desperate for spot produ....
EU: The market for Eastern European walnuts remain....
The situation in Turkey remained firm. Although ru....
The market of USA Pecannutkernels remained unchang....
The almond market is highly interested in the Jan ....
EU and USA market : Kernel supply in the destin....
Asia is playing a more and more important role in ....
Due to lesser Chinese demand, prices for Pecannutk....
The market of Brazilnutkernels remains a very inte....
In our previous report we wrote about the lowered ....
The situation in Turkey remains tight, driven by c....
The last few weeks prices for cashews slowly, but ....
During the past weeks there has not been a lot to ....
Eastern Europe: The market continued at a firm lev....
The Californian almond board reported another reco....
We are coming towards the end of 2017 where we hav....
With the season being over and only very little pr....
Eastern Europe: As reported earlier, the demand fo....
Collectors are in the jungle to collect the new cr....
Prices of pecannutkernels came down due to slower ....
The November shipment figures came in at a total o....
The market of cashewnutkernels remains stable. Pri....
In the last report we mentioned the crop in South ....
Eastern Europe: Demand from European buyers remain....
Most of the crop is in. Most of the s....
The latest movements in the Turkish hazelnut marke....
The cashewnutmarket is relatively in calm waters a....
Last few days we have been visiting some of the gr....
The current crop of Brazilnutkernels is nearly sol....
Eastern Europe: demand from European buyers contin....
Total shipment from California hit a new record fo....
The market is uncertain at the moment about the di....
For most of the packers the season is over for qui....
Eastern Europe: Factories are working in full swin....
The market of cashewnutkernels seems to stabilize ....
The situation for macadamias remains unchanged. Th....
Eastern Europe: Suppliers seem to be in a confiden....
The USDA has announced their estimate of the 2017 ....
The prices for WW320 eases in Vietnam with C-ranke....
Typically, around this time of the year factories ....
Eastern Europe: First trucks from Eastern Europe w....
The Californian almond market is becoming more inf....
Most of the product from West Africa arrived now i....
Most of the Macadamia crops are in and committed w....
The market for Turkish hazelnutkernels is stable a....
USA: it is very hot in California at the moment an....
Due to the hurricane Harvey with a lot of rains an....
The market of cashewnutkernels remains in a squeez....
There is no news in the field of macadamias. Deman....
The walnut season is around the corner and will st....
There is limited demand in the market still. Facto....
The crop in Mexico is not very good and therefore ....
The July shipments were again new records and conf....
The Turkish government announced their buying pric....
The market of cashewnutkernels is in a wait-and-se....
As good news from origin is not to be expected thi....
Due to some question marks on the new crop from Me....
Yesterday the shipment report came out again. The ....
The cashewnutmarket is not very active at the mome....
Last week the Australian Macadamia Society (AMS) a....
Prices for Brazilnutkernels are going up again a b....
Prices for USA Pecannutkernels are stable. Not muc....
The trend of increasing prices, which started earl....
The weather forecasts for the next 10 days keep on....
We didn’t see a lot of activity on the European ....
Prices of cashewnutkernels are moving in a small p....
The situation remains unchanged. There is a lot of....
Prices are a bit under pressure as demand faded aw....
Not a lot of movement is seen on the Turkish marke....
Chile, the only actively offering origin at the mo....
Cashewmarket is a bit dull at the moment. Suppl....
The signs of a difficult macadamia year in terms o....
USA: the current availability of pecannutkernels (....
The quality concerns about the remaining Turkish h....
The Almond market remained quite dull during the l....
After a long period in which Chile enjoyed the sta....
What to report on the market of cashewnutkernels? ....
Prices on macadamia kernels have risen sharply ove....
Prices on Brazilnutkernels eased a little bit, not....
The low demand on nearby positions hasn’t improv....
While the almond market appeared to be in a quiet ....
Cashewnutkernel price came down a little bit due t....
The volumes in the macadamia market are very limit....
USA: Prices of pecannutkernels remain stable but e....
The situation on the Brazilnutmarket remains very ....
A crop estimate on the Turkish hazelnutcrop of 670....
The general trend of short supply on a global scal....
The prices of cashewnutkernels remain high and wen....
There is not a lot to be said about the macadamia ....
USA: Market is stable and processors in are proces....
After the first few months of the crop it became c....
The NASS crop estimate has been released by the US....
After months of yoyoing prices the Turkish market ....
The Chilean export market has been operating succe....
All signs for a good apricot crop are green as the....
What to write on the market of cashewnutkernels. I....
The season is finally picking up some speed. Austr....
With the NASS crop estimate approaching, which wil....
Last week we reported that TMO decided to interven....
The eyes of most European buyers seem to be set in....
Prices for Brazilnutkernels are continuously incre....
We wrote in our previous report that the market of....
The past weeks macadamias were quite a hot item. T....
We have seen several remaining stocks ourselves du....
The environment in which the trade of Turkish Haze....
The availability of brazilnutkernels remains very ....
The market of cashews remains a bit of a rollercoa....
The first new crop arrivals in South Africa are de....
For the first time in weeks we’ve seen some acti....
The failure of the Brazilnutcrop (possibly due to ....
The prices of Pecannutkernels are more or less sta....
The Turkish hazelnut market remained stable during....
The latest weather conditions in California suppor....
The prices of RCN are still very firm (in Asia and....
Demand for NIS from China continues to be strong. ....
The yo-yoing of the Turkish hazelnut market contin....
As the US market is basically committed for the 20....
While the nut business in general is facing a lot ....
The market of cashewnut kernels remains tight. Spo....
It is good that we can update you from source. We ....
The market of Brazilnutkernels is very difficult. ....
USA: most of the crop is sold and in hands of the ....
Prices of Turkish hazelnuts came down significantl....
Eastern Europe: the situation basically remains un....
After the upwards spiral in pricing during the end....
The price for cashew nut kernels remains high for ....
The situation in the macadamia market is pretty un....
The brazil market is unfortunately not getting eas....
The market for Turkish hazelnuts stayed relatively....
We still haven’t witnessed a lot of movement fro....
While the almond market has been in a downwards sp....
The market is searching its way! Will it go up aga....
Last time there was an increase in interest visibl....
Almonds continued to be the “best buy” of the ....
For the first time in weeks, we have witnessed a v....
The market of Brazilnutkernels is very difficult a....
A stable market. Most of the raw material is bough....
The record levels of the USD/TLR rate triggered a ....
Prices stabilized but it is hard to find offers fo....
From the demand side, there has been strong demand....
The high prices at the end of 2016 crop resulted i....
The crop is for approx. 95-97% sold to the process....
After the high shipment figures of the past months....
The situation with pressure on available product f....
The Turkish hazelnut market has been driven upward....
The Turkish hazelnut market finished 2016 at an ex....
The California Almond board released the final shi....
Walnut exporters in the Eastern European regions w....
The factories have been closed for Christmas for t....
The cashewnutmarket has been calm for the past wee....
The hazelnut market remained firm during the past ....
The market of European walnuts seems to be in a sm....
The market for Brazilnutkernels is not very easy t....
Due to heavy demand for inshell pecans in the fiel....
Demand for macadamias seem to be picking up with p....
Review of the 2016 crops: The ....
While the pressure was expected to be reduced on t....
The market for Almonds showed her strength last we....
After a period of increasing prices, persistent fa....
Last market report we already spoke about some sma....
The prices for Pecannutkernels are just going up a....
The smaller factories have already finished produc....
The situation in the macadamia market remains unch....
The market went up during 2016 from levels around ....
The market is not so active and prices are stable. Sellers are not in a hurry to sell as the Vietnamese processors are closing the factories for TET holidays and buyers are just waiting for their end of year figures to make up their mind and calculate positions. Supply of RCN will start in full swing again from 2nd half February onwards with the Cambodian and Vietnamese crops, followed by West African RCN shipments. The additional volume of Tanzania has to find his way in the market as well. Cambodian and Vietnamese crops looks OK but some heavy rains might have damaged some flowering and nut set. West African crops looks good. Tanzanian seeds are a question mark. They are looking for buyers for big quantities but also have the intention to process a significant volume themselves during this year.
Buyers are expecting good crops around the globe and hope that prices will ease further when the crops are coming in. Overall consumer demand during 2017 and 2018 has not shown significant differences compared to previous seasons. We have seen a slower growth but still growth in the US and European market. So the higher prices of the 2017 season as well as the lower prices during 2018 did not really create a loss of consumer demand. Hopefully during 2019 we will see a growth of 5-7% again as prices are more attractive and hopefully this will trigger consumers as well.
There is currently not a lot to report on macadamias as most of the origins are done for the season and closed the factories for Christmas and after that for maintenance to get ready for a new season. The next origin to open is Malawi with first shipments due shortly, but Malawi only being a relatively small origin with quite a set customer base this is not really having an impact on the market. We basically have to wait for Kenya and here we hope to have a clearer view by the end of the month. There is some rumour about crop damage, but we should expect a better crop after the disappointing performance of 2018. South Africa and Australia will only come with crop forecasts in February, but so far the weather has been quite good and also here we should see increasing production figures. From a demand point of view we see healthy shipping figures from July till October 2019. Europe is up by +44%, the US +26% and Asia (excl. China) +12%. These are incredible figures given the fact that we are facing all time high prices as well. It is obvious that there was more availability as well, but it is good to see that the market so far has been able to absorb. On the NIS side it has been quiet. It will be interesting to see how sales around Chinese New Year will go, but with the lower prices from especially China domestic production but also from other origins we could see some stabilization here as well. For new crop we also see growing interest and it will be interesting to see how this market further develops. All in all it remains a very small item where a few containers can make major differences.
The market was slow as the other markets of nuts were because of Christmas and New Year. Buyers are coming back to the market and processors are buying additional volume of inshell to cover their commitments. Currently the stockholder/farmers are becoming a bit cautious and some are withdrawn from the market as they will not accept the current prices. This could be a serious sign that we have reached (or are close to) the bottom of the market. Prices are quite attractive when we compare them with the previous seasons and it is therefore recommendable to have a serious look at your positions.
With most packers being closed during the period of (Russian) Christmas and new year, the eastern-European market has remained silent since the close of 2018. This phenomenon can usually be found during the start of the year, which doesn’t trigger any real price fluctuations. Since the spot availability of US product is coming into play during this period as well, most eastern-European processors are focussing to fulfil their year round obligations whereas additional business is basically considered as bonus on top of this. Both buyers and processors of Californian product are awaiting the December shipment reports at the moment, which will be published shortly. Good shipment figures are expected, based on strong demand and an overall later crop, which should result in increased shipment figures for December to catch up. It remains to be seen whether these anticipations are correct.
The market for Turkish hazelnuts is one of the few which didn’t turn quiet during the end of year. Both domestic consumption as exports were reported to be strong, resulting in roughly half of the crop being used now. Domestic pricing was driven up, supported by the ongoing fluctuations of the TLR exchange rate. The majority of the liquidity is quoted to be in hands of financially strong processors and middlemen, whom could potentially use this position to drive up pricing even further. It remains to be seen how the TLR exchange rate will develop itself during 2019. This, together with buying decisions of the largest user, are quoted to be the main factors whom will determine the export prices coming period. Since both factors are rather unpredictable, a close watch and healthy coverage can be advised.
Market for the whole cashew nut kernels went up during the last three weeks and stabilized over the past week on levels around the 3.75 – 3.85 USD/lb FOB for WW320. As mentioned in last market report, lower quality RCN are being processed actually. This is leading to the price increase on the WW grades. There is a high chance that some sellers have to default their kernel contract which are written on 3.15-3.30 USD/lb FOB levels, which could lead to a further demand increase, increasing the prices again.
Buyers are expecting that the prices will come down again after Q1 when the new Northern Hemisphere are coming in together with the Tanzanian crop (in kernels or in RCN). Although until that time the market will remain firm.
Earlier this week we visited South Africa again for some meetings. It is interesting to see how the South African industry is getting ready for growth. A lot of attention goes to the growth of China, which is in all reality very hard to measure, but we should not forget the positive news in terms of volumes from the most important exporter of kernel and inshell macadamias to the market, which is South Africa. There are a lot of new plantings in the ground and will come to bearing in the next 10 years. This should finally give customers a chance of developing new products and getting macadamias presented to a larger group of customers. Even so macadamias will remain to be a niche product accounting for maybe 2-3% of the nutbasket, but at least giving opportunities for development.
The current situation in China is giving some concerns as apparently some arrests have been taking place and blocking the grey route, which is for many nuts still a important route. The impact on the macadamias however is minimal as most of the goods have been shipped already and are sitting in warehouses and is much more a problem for the products from the US. This was also confirmed after a few conversations in China. The domestic product is even giving some positive momentum as prices are relatively low and are immediately having an impact on sales. Nonetheless, there are currently sufficient stocks, which should see them through till Chinese New Year. How this market will further develop is difficult to say as it can change easily, but for now the Chinese supply is causing a positive momentum.
On the kernel side the market is here and there seeing some offers. This will most probably be just sufficient for the market to get through till new crop. In between there is only limited new volume coming to the market. For new crop we are seeing more demand at price levels comparable to opening prices of 2018, which seems reasonable as it is all pure speculation with only limited information on the crop. Prices are available upon request.
Marketwise not a lot is happening. The past season was a season where Brazilnutkernels were brought back on the shelf after the disastrous season before where no Brazilnutkernels were available. Demand is picking up again but slowly. New crop is just starting. We see the usual behaviour of the collectors trying to negotiate higher prices before entering the jungle. We have to wait and see the coming weeks what will happen. Most factories are closed and doing maintenance for the new season and will start processing again in January.
Demand for conventional product from Eastern Europe remained on a silent pace during the last two weeks, resulting in a rather dull market. A different story can be found on the organic side, where (EU) buyers have less alternatives from other origins to turn to. The market for – fully traceable – organic material from Eastern Europe seems to be moving more and more separately from the conventional market, due to decreasing availability. On top of this, we’ve seen low crack out of halves this season in Eastern Europe, increasing pressure further on halves in specific. The November shipment figures from California will be published next week, providing more insight in actual movements from this side of the world. Due to delayed shipments in October, November is expected to come up with strong figures. The strong decline in pricing has come to an hold at this point, it remains to be seen how the market will react on the November shipment reports and new availability of fresh goods in the spot markets.
The Turkish export market is rather silent at the moment. Domestic pricing remains on a stable pace, thus increasing export prices in terms of USD. In addition, most EU buyers seem to be well covered for the first months of 2018, keeping the market silent as well. TMO’s buying program is still in place, it remains to be seen how long they will continue to buy at these levels, as concerns are raising about the total volume they will further absorb.
Prices for pecannutkernels are stabilizing. While buyers were waiting for kernel prices to drop, the hurricane which hit Georgia and the heavy rains in Texas damaged/destroyed a part of the crop. Therefore it is not expected that prices for kernels will come down anymore unless Chinese demand will stay away. Demand from China is slow and sellers/exporters in USA are awaiting the sales figures of Single’s Day and Chinese New Year, when the big sales are happening. The information on those sales will become available February next year.
Prices of cashewnut kernels went into ‘the rollercoaster mode’ again. A couple of things seem to come together:
Especially the lack of Tanzanian RCN for processing caused processors in India and Vietnam to become nervous as they depend on the Tanzanian crop for processing/consumption. Prices of WW-grades moved up immediately and are not expected to ease shortly as the availability will depend on good quality RCN from Tanzania. There -reportedly- is still approx. 150.000 Mton of RCN in Ivory Coast and Nigeria combined, which Vietnam is mainly looking to process (if the product is indeed exported at all…). But these lower quality seeds from Ivory Coast actually will be resulting in a high availability of LBW and SW grades (and processing low quality seed is more expensive than better RCN), therefore the gap between WW and second grades is increasing quickly and it does no alleviate the pressure on the main grades short term either. So where stocks in West Africa are practically depleted (except the remaining product mentioned above), this product may be exported in light of the Tanzanian situation, but if left in Africa, this product most probably will be mixed in with the new crop becoming available Feb/March 2019 onwards. Summarizing: it is our strong recommendation to be covered now for the 1st quarter (probably until April) of 2019. Last week our team visited the Sietta / ACA & Comcashew conference in Ivory Coast. Discussions where ongoing on the current issues in the industry and trade. Main issue remains the low rate of processing in West-Africa, which is making the dependency on the RCN trade very high. This leads to main issues on RCN quality, high volatility and contract defaults. Overall consensus is that an increase of cashew processing in West-Africa would lead to a more stable world market which would be good for the whole industry.
Most of the 2018 crops are sold, that counts for practically every origin. Most factories in Southern Africa are working towards close down, and the last bits and pieces coming out of the processing units will be shipped (and anything unsold will be sold) in the coming weeks.
Some South African packers are reported to be struggling a bit. The Chinese NIS market interest for NIS is a bit down and with this market taking less quantity, it may result in some NIS may become available for processing into kernels, or for end of season sale into China at lower than anticipated levels. The million dollar question might indeed become the appetite of the Chinese market for NIS for the last couple of months of the 2018 crop, feeding into the 2019 season. With (much) lower NIS prices in China, the price difference between kernels and NIS may be reversed from the past seasons, kernel proving to be better value than NIS. This will create another interesting scenario where one is left to wonder if the installed capacity for processing into kernel is sufficient in the main exporter countries for NIS to China (Australia and South Africa). This is one of the more bizarre seasons, as the kernel pipeline is rather empty and will take months to fill, which creates a strong price sentiment. But the sentiment on prices is not strong generally since the expectation is for better supply into the 2019 season. Summarizing we believe the remaining quantities from 2018 crop are so limited but demand still so good, that we expect prices to hold for the coming months but when the crops come in from South Africa and Australia prices might come down from August/September onwards unless Chinese demand for NIS will pick up again.
The demand for Christmas deliveries is slowing down, as most buyers have covered all of their seasonal needs. Overall demand for Eastern Europe is getting a bit slower accordingly, resulting in slightly weaker pricing. It remains to be seen how this market will further develop, as tight timelines are no longer a valid reason to choose for Eastern European product once Californian product becomes widely available on the spot again. Organic material from Eastern Europe is becoming a different story. Both demand and pricing continue on a stable pace for 2019 needs. We would recommend to consider open positions for organic to be covered, as expected availability of good quality – light – material in the post-season might be limited.
The market for Turkish hazelnutkernels remains stable, with domestic prices dominated by the TMO and largest user whom adjusted it’s buying prices accordingly. The success of TMO’s buying campaign can be doubted, as a large share of the promises were not committed. Export prices remain to be competitive from a historical perspective, but the total advantage is decreasing due to the strengthen TLR exchange rate, which has improved to 5,34 USD/TLR at the moment.
Although the export figures remain (nearly) the same and the crop looking promising, the US packers are holding on to their prices. Most buyers are waiting for prices to come down as the US packers have to sell a best crop ever and resistance from China due to the higher import duties. Our recommendation for the time being is to buy hand to mouth
The market of cashewnutkernels returned to calm waters after quite some activity by the end of September/first half October. When the prices came down significantly some buyers jumped into the market while others are still waiting for sales figures and forward budgets before they will make calls for 2019. The next important indicator on this market will be the auction prices from Tanzania. Buyers of RCN are trying to push
the prices down, but so far cheaper bids have been declined by the Tanzanian government. They are trying to export around levels of Usd 1600-1800 per mton while the interest of buyers is a Usd 200-300 per mton lower. How long will they be able to play ‘hard-ball’ as they need to get the goods shipped, especially for the Vietnamese market while the Vietnamese processors otherwise wait for their own crop. The Indians can pay a better price as their domestic market is accepting higher prices than the world market prices. Historically seen prices are at quite interesting levels and with the growing world demand (although a bit slower at the moment due to high prices) we do not expect prices to come down significantly.
Last month we updated you on the
situation in China as we were present at
the International Macadamia
Symposium. This time an update on
the shipments to the “old” markets
On the right you see two sets of charts.
The bar chart shows the shipments of the
first two months of the new crop. This
was typically when the crops from
Australia and South Africa become available. However with increasing crops from Kenya this is not showing the full picture and therefore we have added the pie chart as well with the shipments from January upto August 2018.
Shipments into the US and EU have been very strong for July and particular August and confirm a completely empty market after the disappointing crops last year. Shipments from Kenya till date are also still very strong, but keeping the disappointing Kenyan crop in mind this should slowdown quite rapidly. Nonetheless, it clearly shows the importance of the Kenyan crop to make the volumes in both the US and the EU market. South Africa is following and knowing their crop comes in later it is expected that South Africa will still be the main supplier of kernels to these specific markets. If we would also add a chart for the Asian countries one would see where most of the Australian crop ends up next to their strong domestic market.
Anyhow, with shipments being strong and demand still being strong with only limited offers available the recommendation remains the same as earlier to cover your needs upto new crop. There is still a chance for Chinese
demand to be disappointing, but it is unlikely that that is going to change the kernel market as buyers are hesitant to buy product cracked in China.
For 2019 crop we have also started to commit. Offers are available upon request.
The pressure on prompt deliveries from Eastern-Europe has further increased during the last two weeks. The slow
start of the season didn’t allow suppliers to build up stocks for prompt requests later on, as the declining export price
against the firm raw material prices didn’t provide space to do so. Now – at the start of the most important month for walnut exports from eastern-Europe – we still see uncovered demand meant for Christmas purposes. The timeframes offered by suppliers seem to become more dominant in comparison to the offered prices in the search for reliable product to be delivered in time. ‘In time’ means preferably middle- up to end of November latest for most buyers. This phenomenon has stopped pricing from declining and will most likely continue to put a floor in the market up till December. Covering nearby positions can be strongly advised, it remains to be seen how prices will hold after Christmas season is over and fresh product from California will be available in the EU again.
The Turkish market remained silent during the last couple of days, while waiting for the TMO to start their purchasing campaign today. Next to unpredictable currency fluctuations has the Turkish government proven itself again to be unpredictable as well, by announcing last week that they will intrude in the market. The buying prices as announced by them were at TL 14,- per kg for Levant and TL 14,50 per kg for the Giresun origin material. This move has improved the position of alternative origins, it remains to be seen whether they will use this situation to increase their own prices as well, or focus on moving more quantities being more competitive to Turkey now. Over time, EU prices increased quite a bit due to the improving TL currency. With this new information in mind, further coverage can be considered, especially when putting the current prices into a historical perspective.
The prices for Brazilnutkernels are stable at the moment. Not many changes are expected on the short term. The collectors will enter the rainforest from December onwards and the question mark is how much will be collected for processing and what price will they ask. With the past 2 seasons starting at high prices they most probably will try to get good prices again. Our recommendation is to be covered for this crop. We will keep you posted on new crop developments when available.
Due to the hurricane which hit Georgia, sellers are reluctant to make offers at the moment. Beside the real damage of the orchards and the loss of crop, it is also difficult to enter the orchards to collect the nuts. It seems that a significant part of the Georgia crop is hit. More will be known in the coming days and we will update you when information is available.
The prices of USA Almonds are stable. Processors are not in a hurry to sell although there are serious concerns on the exports to China. Fortunately the growing consumption domestically and in Europe is helping them but it has to be seen if they big crop can be handled with the slower demand from China. Buyers are convinced that prices will ease and just buy hand to mouth.
The prices for cashewnutkernels came down significantly during the past weeks due to lack of interest from buyers. Processors were/are unhappy with this development as their purchasing price for RCN did not allow them to make a profit with the current kernel prices. Most of them had no choice as they had to fulfil their financial obligations in time. Due to the lower prices, interest showed up last week and from Thursday/Friday (last week) on we saw kernel prices increasing by Usd 0,05-0,15 per lbs. Processors were triggered by the show up of demand and immediately increased
prices. Is this sustainable or will buyers step out of the market and wait again? As far as we judged and calculate, RCN volumes in Vietnam should be OK for processing until new crop shows up. East African crops will become available shortly, although expected at higher price. This higher price would still work for the Indian processing industry as their domestic market is paying better prices. The big question mark is demand. Do the high prices of last year and beginning of this year have an impact on demand. Big importers/packers are ‘complaining’ that demand is down and that we
will see slower shipment from August/September 2018 onwards. Time will tell. As prices are still at favourable levels, we still recommend to take/cover positions for Jan-Dec 2019. We are very happy that one of our suppliers, Trade Development Int. BV is audited and accredited for BRC AA. We
congratulate the team with this big achievement and are very glad to confirm that we only work with top classified suppliers to meet your requirements.
This time we happily update you from the International Macadamia Symposium (IMS), which is currently held in Lincang, China. A well-organized symposium where roads are blocked like we are VIPS and a lot of friendly words are spoken. At the same time a lot of information is shared, but to get a real good view is not that easy and sometimes even confusing. But one thing is clear that there is a giant awakening. For this season a crop of about 12.000-15.000 mton is expected, but there are quite some doubts about the quality in terms of the inshell product as well as the current capacity of the factories. Last year there were a lot of problems with unsound product and even though the Chinese are quick learners it seems the quality is still a bit of an issue. The commercial farms, however,
seem to have it better under control, where the small scale farmers have rather poor trees and are pretty much uneducated. Anyhow, the Chinese inshell market is definitely going to use most of this product, which is currently quite attractively priced (USD 4.20-4.70). There is also still a lot of stock of imported goods. This is not very strange for the time of the year, but it looks like it is a bit more than normal and the internet sales are not as vivid as they were the past three years. Interestingly, this situation seems to change a bit. Demand for merchandise is picking up since
the Yunnan crop is not as good as anticipated in terms of quantity and quality. Moreover, the increased tariffs for US product might be a stimulation to focus more on macadamias again. The kernel market remains quite strong with sufficient demand for practically all grades, but as is the case for the whole season in particular for Style 4L, where there has been a constant shortage. For kernel the recommendation remains unchanged to be covered till about July 2019.
Hurricane Michael was a very strong storm that ran through the heart of the Georgia pecan growing area last week. Production in the state of Georgia can represent almost 1/3 of the entire USA pecan crop. Field representatives are trying to assess the damage, but some areas have lost power and roads are blocked with fallen trees and power lines. It is certain that the high wind that accompanied this storm has reduced the potential of the pecan
crops in the storm’s path. The question is to what extent.
Most of the urgent needs for product from Eastern Europe seemed to be covered during the last two weeks, bringing
some relief on the side of the – already unhurried – walnut buyers. The price bottom of export product from Eastern
Europe might be moved by this event, as exporters can use this relief to push prices for raw material down as well. It remains to be seen whether exporters accomplish to do so, before needs for additional raw material pick up again. When it comes to organic material, we see a rather stable market, as exporters understand that most of these needs are meant for annual call off bases and buyers will have to make a decision sooner or later. The overall quality of the raw material received so far indicates a rather dark overall colour, indicating a wider availability of amber product and more potential difficulties on deliveries of light material this year. Despite the expectations of lower levels to come, it can be advised to keep a close eye on (extra)light needs, as the search for high quality product won’t become easier.
The course of the market seems to be changed after a new reward system has been applied by the largest user of hazelnut kernels, which included large contracts with both cracking facilities as the middlemen. The liquidity of product available / offered by farmers seems te be decreasing now, while both exports as demand from the domestic market both seem to be down as well. The weak TLR seems to be one of the main drivers for these events, it remains to be seen in which direction the TLR rate and therefor the market – up to a certain extent(!) – will move.
Riberalta experienced heavy rain last week causing some flooding, this is a little earlier than normal but as rains have now stopped its nothing to be too alarmed about (yet..).
This year whilst factories may wish to start early once again with raw material at such low levels collectors will not be as incentivized to enter the jungle and start the collection and may actively delay until a more sustainable price is agreed.
2018 Exports are showing 23% growth against the previous high for the same period. This growth is explained by the strong shipments earlier in the year alongside the dramatic growth in demand from Korea who know have had exported to them more than 6,000MT. In a normal year this is more than the total exports from Peru and Brazil. Demand from Korea has been falling since July as the local market make their way through the higher priced stock. Interestingly an increase in price could improve demand from Korea again as importers will be more willing to purchase.
As before the key question remains will current crop run out before the new crop arrives? It’s clear factories are shut and many are sold out of the season but a few remain with limited stock to sell. The start of the next crop is also unclear so it’s worth watching the weather and following up on any early trades of raw material.
Prices of cashewnutkernels came down another couple of cents over the past week. Where will it stop? Buyers are sitting on their hands while prices are coming down. The actual downtrend is only making the buyers more hesitant to buy, as they know that they possibly could have a better deal later.
Processors carrying long position on higher priced RCN are disappointed and are losing a lot of money under the current market circumstances.
Supply: current unsold/uncommitted stock in bonded warehouse is estimated between 75.000-125.000 mton. This product is mainly from Nigeria and Ivory Coast origin and priced at Usd 1100-1200 per mton. Relatively cheap but quality is ‘bad’. KOR around 40 or lower and a lot of 2nd grade product after shelling. Only small processors are picking up this product for shelling but a lot of them decided already to stop processing. These lower quality RCN are giving a lot of “off-grades”, wherefore there actually hardly is any market in China.
Medium and top packers seem to have sufficient stock for processing until end of the year. Some can even afford to wait buying new RCN until new crop from Vietnam and Cambodia. The stock in the hand of the processors is of better quality but on average also higher priced (Usd 1800-1900 per mton). The current market of Usd 3,40 per lbs basis FOB is creating a loss for those processors. The next crop from the Southern Hemisphere is around the corner. First indications from Tanzania are Usd 1700-1750 per mton for a KOR 53 (high quality). The current kernel market is not allowing those RCN prices but, as the Indian kernel market is higher prices, we expect buying interest and pressure from India who can afford paying higher prices for RCN while they have a big domestic market.
Demand: very slow. Nearly no demand. Stocks in Europe are very limited and significantly higher priced (Usd 3,80-3,90 per lbs for WW320).
Our recommendation is to take a serious look at 2019 positions and cover part of that. We are at, or coming close to, the floor of the market and in Dutch we have a saying that in case you wait too long, you will pay for it!
The macadamia market remains pretty much unchanged. Offers are currently quite limited and this is basically the case for all the grades. Typically you see that especially on the wholes there is some more pressure, but one could say it is basically across the board. This has a number of reasons. First of all the worldwide crop was smaller than earlier anticipated. Kenya had a pretty bad crop mainly because they went in too early, which had a bad impact on sound product and total volume. South Africa has been reducing the crop quite a bit and also Australia is not having the growth one was hoping for. An interesting and difficult point is the demand from China. There is a lot of talk about the Chinese market not importing as much NIS as earlier anticipated, but based on the available kernel you could doubt that. From the areas we are active we are seeing a smooth season without many hiccups.
On the Chinese crop we hope to be able to give you some more inside information after we visited the 8th International Macadamia Symposium, which will be held 17-19 October in Lincang, Yunnan in the heart of the macadamia growing areas. It will be very interesting to see the developments over there. It would be good for the industry to get some more volume in order to push for some product development as now supply is mainly causing this to only happening on a small scale. Obviously the price also is a factor for slow developments, but a bit softer prices should push sales quite easily for this wonderful product.
With regards to covering the recommendation remains the same and that is to cover your needs till new crop and as a matter of fact it is perhaps also wise to have a look at new crop already as we see interest building up. Offers are available upon request.
Prices for raw material in Eastern Europe seem to ease bit by bit these days, adjusting to more realistic levels for exporters to compete again. Whereas the first trucks were dispatched already early October last year, most packers are not in the position to dispatch their first loads yet at the moment. The 1.) already late crop, followed by 2.) slow intakes of raw material due to high prices, combined with 3.) less forward contracts / buying interest prior to the season are now resulting in a stressed market. A lot of traditional buyers are looking for product to be delivered in the next couple of weeks, whereas the production capacity of most processors is still limited due to availability of (well dried) material. Despite that the downwards trend in pricing isn’t completely vanished, we do advise to take a look at your nearby positions as availability is becoming more of an issue for nearby deliveries. We might see a somewhat similar situation in California later on, as long as buyers continue buying at a slow / hand to mouth pace. The August shipment figures managed to smaller the gap in year to date shipments, but overall figures still indicate overall
quantity to be 10% below last year still..
As for many items also brazilnut prices have been drifting
down now reaching levels of 2012 season. In the graph we
have left 2017 out, because of the crop failure and prices
reaching 10.00 per LB. But current prices put in a historic
perspective are really on the lower end and it wouldn’t be a
surprise if prices have seen the lower end of this. Basically
prices between USD 3.50 and USD 4.00 are seen as sustainable
as a lot of effort needs to be put into it.
The volumes for the remainder of the season are limited and
therefore it might not be a bad moment to look at your needs
upto May/June 2018 and cover some positions.
Like most markets also the market of cashewnutkernels is experiencing less activity. Summer holidays and stable market is getting buyers to sit back and wait. Nearby positions are covered. We expect stability in the months ahead of us. The crop in the Southern Hemisphere will become available during October/November (approx. 25% of total worldvolume) but no significant price changes are expected for raw seeds nor kernels. Depending on supply/demand market will move sideways. Our recommendation is to be covered until February/March as than the new crop from the Northern Hemisphere will start. The decrease in price of the past months hopefully will help consumption a bit as export figures from India and Vietnam slowed down.
The market in China is not easy for NIS. Specifications are getting stronger. The higher prices of the past years seems to have an impact on demand. Will this give more kernels later in the season as more NIS assigned for China will be processed?
Most buyers are covered for 2018 but need to cover until new crop in the middle of next year, i.e. they need to cover an additional 4-6 months still. It is our recommendation to be covered as availability until new crop is limited.
The prices of Pecannutkernels are reaching quite attractive levels, based on good crop estimation in USA. Crop looks promising but we have to keep in mind that the growing areas still have the risk of hurricanes/tropical storms which can damage the crop significantly and decrease availability.
Harvest will start in US during October and first new crop export shipments during December/January.
South African crop is in and mostly sold as NIS to China. We have some opportunities for some South Africa Pecan pieces.
The Turkish hazelnut market represents the most volatile product out of the nut basket at the moment. Developments are still impacted by extreme currency fluctuations. After the peak of 7 TLR against the USD last week, the exchange rate stabilised this week around 6 TLR while Turkey is closed due to the EID Holidays. The start of the harvest of the new crop has been good with favourable weather conditions. Current weather conditions aren’t ideal, but not harmful to the crop either, i.e. lower temperatures without further rainfall. Keeping a close eye on the TLR exchange rate is advised, as this seems to be an important parameter for both buyers and sellers.
Traditionally, buyers start to look for some first updates on the Eastern European crop after return of the summer holidays. So far we have seen rather stable conditions throughout Eastern Europe during the growing season, resulting in positive expectations on the overall quality of the crop. First forward offers from this region are being reported. Quotations seem to be based on the forward offers from California. It remains to be seen how both prices and quality of EU product holds up to product from California coming season.
Crop expectations from California itself are quite positive as well.
The news coming from these two origins, plus the ongoing growth of Chilean potential export volume, is putting buyers in comfortable position heading towards the new season.
The cashew kernel market is stable during past two weeks, with a slight downward trend. Market in Europe and US are quiet because of summer holidays, however it seems that local markets in Vietnam and India do have sufficient demand. RCN stocks from West-Africa are moving slowly but surely to Vietnam and India. Still quite some product is available in Nigeria and Ivory Coast which is sold on levels between the 1.250-1.350 USD/mton CNF for KOR’s around the 44-46. New Indonesian crop starts to being offered at levels around the 1.750 USD/mton for KOR 54+. All in all actual RCN prices seem to be in line with the actual kernel prices, so if supply and demand remain balanced no major price corrections are expected. Although still quite some RCN traders and processors are sitting with high priced RCN stocks from West-Africa in their books.
There was slightly more kernel activity recently, but offers are still very hard to get. Spot positions remain tight and it is recommendable to cover at least your nearby needs. For later positions the picture is not really clear. There is still some risk in the market with potential defaults in China although till date this seems to run rather smooth with here and there some minor quality claims. Only real problems here could change the market.
Jan – June 2018 exports from Bolivia, Peru & Brazil are 24% above previous highs in 2016.
This years crop has now all been delivered to factories. A few factories will close early potentially by end of August with the majority closing end of October/November
Key question is, are buyers sufficiently covered for their requirement October to April? If not will there be enough supply of this year’s crop to cover it?
An important driver for the Turkish hazelnut market remains to be the USD / TLR rate, which was affected by political tension between Turkey and the US during last week. Processors from Georgia try to keep up closely with these trends, keeping their offers below the alternatives from Turkey. The Georgian crop looks promising in terms of quality so far, further strengthening the position of this origin. No firm updates were received with the eye on interference from the TMO. In fact, rumours of non-interference during the start of the season are spreading through the market.
After some interesting days with quite some demand, the market turned into his quiet mode again. Due to significant demand, prices went up by Usd 0,10-0,15 per lbs. When prices went up, demand faded away again and prices started to come down a little bit again although not to the levels of 2-3 weeks ago (yet).
When we do the mathematics we see that total availability on RCN should be OK but the remark to make is that quality from West Africa is deteriorating and therefore % of first grade material is decreasing. Processing costs will be higher and outturns less, i.e. not much room for prices to come down without the processor loosing money.
It is therefore our recommendation to take a certain cover until 1st quarter of 2019 when possible to take advantage of the current prices.
Typically, we go into somewhat quieter times on macadamias. The NIS market is always very slow in August, but it looks like the higher quality standards and the crop from China is putting some pressure on this market. There is still demand, but prices have come down quite a bit (about 10-12%) and possibly weaken a bit more as the drying bins are getting rather full. At the same time however there is a concern about the Beaumont crop in South Africa. This crop accounts for a big portion of the (growing) crop and the majority is coming in now. The late flowering and nutset was a concern already and the crop now is showing that the concerns become reality. How big the impact is, is hard to say. The factories have to hand in their latest crop estimates shortly and we should have a better idea then. The kernel demand is still strong, mainly from people that are short. The bookings for first half 2019 are far behind, but interestingly enough there is still hardly any offer available. We do expect that there will be some more offers later on, but also here it is very uncertain how much that is going to be with the concerns on the South African Beaumont crop.
The market of Brazilnutkernels is quiet. Packers are bringing it back on the shelf. This is well appreciated by the consumers but as prices were high, most packages are smaller than in the past and thus quantity is less.
In the meantime, because of slower demand, prices came down significantly and are coming close to average price levels. As most of the crop is committed now we do not foresee a big discount again and it might be recommendable to cover your positions until next year May/June when new crop should become available.
Spot stocks remains tight due to shipment problems.
New crop collection will start December/January 2018/2019.
Based on the current information, i.e. bigger crop and slower export shipments, 2nd hand is speculating on prices to come down further and offering better prices than origin. There are some concerns about the 2018 crop with regards to demand. Will Chinese demand slow down due to current import tariffs and what will the impact be for the demand worldwide? Usually the Chinese importers find a way to get the product in as the consumers like Almonds. When current prices would work it might be advisable to book some volume as prices are attractive and otherwise just wait until the crop comes in and warehouses filling up.
Eastern Europe is having excellent weather conditions prior to the start of the harvest, which is triggered/expected to start relatively early this season. Conditions throughout the year were mild, allowing the crop to develop on a stable bases. It remains to be seen how fast prices for raw material will adjust to current market ideas, as the price gap for farmers (wild collectors) between 17’ and 18’ season might bring some challenges for packers in terms of economical sourcing. More specific crop information is coming from California, where the subjective estimate for their crop was announced earlier this week at 691.000 MT. This is roughly 10% up in comparison to last year and therefor possible a new crop record. A lot of forward offers can be found, as sellers are aware of the record world production and prefer to have some first safety in the books.
Despite favourable weather conditions and only one week left before the start of harvest, remain offers for Turkish hazelnuts rather scare. The rigid mood of the market seems to be caused by uncertainty about both the possibilities of interference of the TMO. This, in combination with some rumours about the actual crop size, is keeping exporters reluctant on forward positions. Georgia seems to make use of lack of offers from Turkey, as they are actively offering at the moment. Overall quality in Georgia is reported to be good. The current momentum might provide a healthy boost at the start of the season of this developing industry.
In the figure you see the decline of prices for the cashewnutkernels. As written last week, are we at/close to the floor? This is a question of most buyers who are still hesitant to cover. Is there any chance for prices to come down further? We doubt. Prices are stable for the past days and purchases were done last week. Some processors even increased their prices a bit. Spot stock are very limited, prices for RCN came down but it is still difficult for processors to make a margin and therefore they prefer to wait or close their doors.
First signs of recovery are coming into the market. Local prices in Vietnam are rising because of limited availability of cashew nut kernels actually, as a lot of processors closed their processing. However there is still plenty of RCN available in the port.
Last weeks we have been busy trying to understand the macadamia market, but that is not that easy. What is happening? One would expect with additional volumes in the market that prices should ease a bit, but the contrary has happened over the past months. The ones who booked early have the “best” prices in their books. Ever since prices of kernels moved up. There is strong demand in the market even at these high prices. The larger buyers are backing off a bit in the hope that prices will come down. This is only bound to work if the smaller buyers also withdraw, but containers that are offered are still sold easily as all buyers need to cover gaps it seem and as such there is no relief. There is already concern about availability in 2019 as most of the bookings so far will only cover 2018 needs whereas also first half 2019 has to come from this crop. The key in this market is most likely the NIS market in China. For the moment this market is still showing strong appetite although at lower prices than earlier in the season basically because of increased Chinese supply. The Chinese customers are waiting for their own crop, which they can buy at more attractive levels and will possibly only return later for South African product or, as said, at lower prices. The South African suppliers don’t have too many options as the processing capacity for 2018 is practically used or they should continue processing well into 2019 which is unlikely. Anyhow, the lower NIS prices together with the increased kernel prices have improved kernel returns by a lot.
The export volumes from origin are breaking all records and this might have an impact on the last quarter of 2018 and 1st quarter of 2019. So far, Korea remains the biggest importer of Brazils and far bigger than US and UK.
The logistic problems remain at the port of Arica and therefore no building up of stocks in US nor in Europe and spot supply limited. With the prices coming down, most buyers prefer to wait a bit but with the challenge as written above (question mark about supply later in the year) we recommend buyers to take a certain cover and make sure your positions is balanced.
In our market report of last week, we announced the objective crop estimate which was based on 2290 lbs per acre. Historically seen this is quite high as you can see in the figure.
The Almond Board of California released the June position report yesterday. The shipments in June were at 156.764.899 pounds, an approx.. 11,5% decrease in comparison with previous year. The total shipments are still up by approx. 8 % in comparison with 2017. Also commitments are down. This can be explained by the good crop expectations and buyers to wait as long as possible to cover. Also for the almonds the uncertainty on the tariffs is having impact and as someone write, hanging as a dark cloud above the almond market. Will the increased tariffs have an impact on Chinese demand and if so, will prices come down further. The current discounts on prices are stimulating business with 2nd hand market even offering lower than origin. Offers are available on request.
In the figures enclosed we see the US crop, imports (from Mexico) and consumption. What can we expect for 2018. So far all signs are positive (a good crop is expected) but as written before we still have some interesting months ahead of us and tropical storms and/or hurricanes can change the positive outlook, overnight.
On top of this we have to significant/important remarks to make:
We would recommend to have a serious look at your positions and cover for the rest of the season and probably a certain percentage for new crop.
First forward options from Eastern Europe are received with reluctance by the market, as the industry is mainly based on wild collection and forecasts are valued as rough speculations only. With roughly two months to cover before the actual start of the season, not a lot of forward activity can be found. Looking at the global perspective, it’s no wonder that buyers feel no trigger to consider forward possibilities. Prices in both the US and Chile have started to melt down further, after a short pause of more or less stable pricing. The spot market for the remainder of the US 17’ crop is moving downwards, together with prices for some forward 18’ positions. Price decrease from Chile is even stronger on a relative bases, mainly driven by the existing price gap between US and Chile product.
It remains to be seen how small the price gap between these origins will become in their challenge to move a potential record crop.
The export market for Turkish hazelnuts remains mainly driven by currency changes, while domestic market is quiet in terms of both supply and demand. The mild weather conditions are preventing the market from stress on the new crop as well, keeping the industry rather silent. However, the overall mood is not comfortable so to speak, as influence / interference from the TMO is an unpredictable and non-neglectable factor.
Over the past days/weeks we have seen prices coming down quite a bit more than most actors in the industry even anticipated. Limited nearby buying interest in combination with some packers needing to turn product into cash, created even stronger negative sentiment, resulting in lower kernel prices for some main grades like WW320.
While most people dealing with cashewnutkernels are convinced that prices will bounce back, the big question is when and from which level the prices will bounce back (i.e. will it come down further first and jump back later).
Supply: Processors in both Vietnam and India are slowing down processing (factories are even closing) as there is limited demand (or there is a struggle to find parity between RCN prices and kernel market). It is reported that a lot of RCN stocks are re-negotiated on price, since the general cashew market came down so much. The shoe is on the other foot, and any losses made by importers/handlers of RCN in the past 2 years may well be compensated this season.
Processors are not buying much more RCN but want to see how the RCN and kernel market develop.
There are reports of the building up of RCN stock building in Vietnam and a bit in India too.
Some processors defaulted on their contract and accepted the loss of their pre-payment because the market dropped more than just the pre-payment value.
We heard of one Vietnamese cashew processor/packer bankrupt while some others are having serious financial issues. All in all it seems clear that the total processing capacity has gone down quite a bit.
Looking at the shipments from Vietnam particularly, the May 2018 figure was again higher than 2017 May, and June is anticipated soon. First indications are that the RCN arrivals from Africa in Vietnam are approx. 100.000 mton lower compared to last year.
Demand: buyers are waiting for the floor of the market and not interested to buy while prices come down on a more or less daily basis. When prices will settle we expect that they will step in. Cover for 2nd half 2018 and 1st quarter 2019 still needs to be done and when buyers start to buy again prices most likely will jump back up, the question is how far the ceiling will be then…
The current ‘low’ kernel prices are available for some containers but not for big quantities and when you want to cover at those low levels you can just buy spot but forward is difficult.
When prices fit your calculation we recommend to cover as we come closer to the bounce back of the prices.
SPOT stocks in the consuming countries remain fairly low, which is logical with the ever dropping prices and buyers wisely buying hand to mouth for the time being.
The NASS Objective Almond crop estimate was announced at 2,45 million pounds based on 1.070.000 bearing acres.
This crop forecast is 6,5% up from the subjective crop estimate and 7,9% of the 2017 crop. Very positive and looking promising. Most almond experts were expecting a crop between 2,3 and 2,4 million pounds so it is expected that this higher number will give some relief to the prices (we got discounted offers for new crop already).
The only remark to make is that the NP production seems to be slightly less than last year.
The market of cashewnutkernels is not an easy one those days. Suppliers/processors need higher prices as they bought/covered RCN at ‘higher’ levels while buyers see prices coming down and wait to cover their positions. Sellers would like to sell and buyers wish to wait for lower prices than offered today.
A number of sellers is discounting prices to get rid of their stocks. Some processors decided to close the factory as they cannot make any margin (even process at a loss), other processors are struggling financially and we even heard rumors of processors going bankrupt.
Import statistics in US & Europe are showing increasing numbers in comparison with previous year while market players indicate the high prices of 2017 have pushed consumption down…. That would mean that there should be bigger inventories than previous years which is not the case really, and it is quite unlikely that anyone long position with the ‘ever decreasing prices’. So one is left to wonder what is happening in the consumer markets really…right now export statistics (India and Vietnam combined) show a healthy growth of well over 16% on a year on year comparison.
We see a decline in exports of RCN from West Africa to Asia. The quality of remaining RCN is declining fast now, and reports are that Ivory Coast is still having approx. 200.000-300.000 Mton of RCN stocks in the country.
Will that mean that we might see a shortage of RCN for Asian processing, and hence a shortage of kernels during the 2nd half of 2018 ? Should that be the case, it will be a double trouble situation:
For the time being we would recommend to cover hand to mouth as, due to whatever reason, prices are slowly but surely coming close to Usd 4,00 per lbs (for WW320). Advice to cover some good volume for 4th quarter 2018 and 1st quarter 2019. Essential to book the far out positions from strong sources since that may be a time of seriously inflated prices due to above scenario.
Recent weeks have been a complete mess in the macadamia market with only urgent requests. It still looks like the macadamia supply is short. The expected relief from Kenya and Malawi is not there. Kenya is facing a lot of difficulties and their crop looks short explaining the only limited relief. Malawi is having their regular customers and volumes are also quite small to really make a difference. But hopefully relief is close with the new crop shipments from Australia and South Africa picking up. The new crop closing in has not resulted in many more offers yet.
From China the market is currently quiet as one of the major buyers has not committed yet. First shipments are currently under way and arriving. So far no hiccups are seen after the more stringent controls as a result on the trade war with the US.
For the moment the recommendation remains unchanged to make sure you have your volumes covered.
The market of pecannutkernels is relatively stable. Prices are not really moving and demand is good.
US: New crop so far looks good but it is still very early to speak about crop expectations as we are in the beginning of the hurricane season. The first 2 named tropical storms hit US already so the season started early and this is a serious potential risk.
South Africa: Crop is good but Chinese demand is slow and that is creating some discounts on pricing. The exporters need money to move the product and pay the farmers while they should be patient probably as the US new crop is ‘too late’ and the Chinese be pushed to buy RSA product.
Eastern European packers seem to be on silent mode. The impact of giving discounts on product from their region remained at a very minimum during the last couple of months. As projected earlier at the INC, first crop ideas for 2018 are well below 2017 figures (-10%) , which might result in a more healthy situation for the coming season. Much more activity is seen in the US, as both sellers and buyers can be found for forward inshell positions. Some experts fear that crop estimate should be revised downwards, a message which is judged with many doubts on buyers side. The Chilean industry is putting a lot of efforts in marketing their 70.000 MT crop, actively offering kernel and smaller inshell sizes. With India, being an important asset of the Chilean marketing plan, increasing their import tariffs on walnuts from 30% to 100% the marketing of their crop hasn’t become any easier lately.
The private market is basically empty, putting the market into the hands of the TMO. TMO’s selling price multiplied by the relevant exchange rate can therefore be seen as a realistic level at the moment. The fluctuations of the TLR exchange rate in combination with the behaviour of the TMO (which might be influenced by the coming elections by the end of June) can therefore be seen as the shaping factors for nearby price developments. Most reports on the development of the new crop indicate positive expectations. The weather conditions so far are certainly in favour of the 640.000 MT crop estimate, as presented earlier at the INC.
The market of cashewnutkernels is not so easy those days. Prices of RCN afloat or arriving in the ports of India and Vietnam are expensive and not workable for the processors in today’s kernel market.
Demand is slow and some processors have to lower their price to get their product sold and pay off their loans.
Over the last 5-8 days we have seen stable prices while demand remains slow. Couple of remarks:
All in all a number of question marks. Our recommendation would be to buy hand to mouth unless contracts committed. There is still a chance that prices might come down a little bit. Having said that, please keep in mind that the cents the market might come down are much less than the potential price increases when we look to RCN prices.
The situation on macadamias remains unchanged and as such very difficult. There are hardly any offers available and if so they are very firm. There is no indication that this will improve on the short term, but it is expected that the current prices will have an impact on the consumption. For now our recommendation remains to cover your needs.
In the 2nd half 2017 and beginning of 2018 we faced a significant increase in demand from South Korea. Due to a good marketing campaign a lot of Korean consumers were highly interested to buy Brazilnutkernels. This interest has put a lot of pressure on the market while there was no product available.
The buying in South Korea has finally slowed down with buyers now only buying hand to mouth as opposed to buying everything available.
European, US and Australian buying has picked up and there is a tightness on nearby availability which is keeping the spot prices high. Forward shipments from August are still available however June and part of July is fully sold.
The prices of cashewnutkernels came down further, mainly because of lack of demand. Buyers are very quiet and waiting/expecting the kernel prices to come down further. As we have seen a couple of weeks ago, prices drop as processors need money to pay their bank loans and have to move their stock. We expect buyers to buy the offered stock when prices reach a certain price point and when prompt shipments are sold and sellers experience buying interest, prices can go up again and this most probably will repeat itself in the coming weeks. Kernel prices will move in the region of Usd 0,20-0,25 per lbs.
Supply should in principle not be an issue. There seems enough RCN stock still available from West Africa and shipments afloat to Vietnam.
Kernel import figures into consumer markets show quite strong demand, up 16,1% from previous year.
Local stocks are very limited as nobody wants to have long positions under the current market circumstances.
Advice: buy the low’s and wait out the highs when they happen.
The transition to new crop is currently really causing difficulties as the supply chain is empty. This was one sure thing to happen after the very poor crops in 2017. We hoped the crops from Malawi and Kenya were going to give some relief, but not as much as was hoped for. The Malawi crop was a bit better, but for Kenya the output is disappointing. Over the past years a lot of new factories have opened the doors, but it looks like the increased competition amongst themselves and the Chinese exporters have only pushed quality down and prices up. We are concerned that the financial weak factories will have a hard time to survive as competition on purchasing NIS is strong. The financial strong and quality minded factories will survive and are needed within the total world supply chain.
The next origins to bring relief are now South Africa and Australia. Australia is a bit pessimistic on their crop, which means the increased volume has to come from South Africa. For now this does also seem to happen with an expected crop of about 52.500 mton. This is healthy increase from 2017 season, but for some reason it doesn’t seem the result in additional offers. As such the market remains very tight and first shipments almost impossible to find, which is also because of rolled over contracts out of 2017. Anyways, we hope the first goods will reach the destination markets in order to keep product on the shelves.
For NIS the market is a bit slower due to still remaining stocks in the warehouses in China. This product is of low quality from Yunnan as most of the good quality product has been consumed. Next to that there are some hiccups in the supply lines causing some uncertainty. It will be interesting how the first containers will be taken care off to see what the future holds.
For now we do strongly recommend to book if possible with your existing suppliers to make sure you will get timely deliveries.
Taking in consideration exports from Bolivia, Peru and Brazil Jan – April 2018 South Korea is the largest importer of Brazil Nuts. They have imported 47% more than Germany and 51% more than the UK. Interestingly exports Jan to March are up vs all previous years, the may point to the fact that the new Demand is helping to cover the supply.
European and US buyers continue to buy hand to mouth and delays in shipments has firmed up the spot and afloat market. Whilst consumption has reduced due to high prices of last year, based on the volume of the exports infers that the Rest of the world is picking up this demand. The big question is when will traditional demand return and given the new found demand for brazil what effect will that have?
The market of Pecannutkernels is stable. Most buyers are covered for their USA product. Availability of Jr MM Halves is limited and therefore we do not expect prices to move much. New crop will become available from November onwards.
South African crop will become available shortly. Most of this product to be shipped as inshell to China. Part of it will be cracked and prices for kernels from South Africa will become available shortly.
We didn’t see a lot activities from Eastern Europe, as demand remained poor. Some reputable packers were able to gain interest for exceptionally good loads, whereas more or less standard material is neglected in the current market. Despite the overall low interest prices tend to become more stable, further price reductions were limited during the last two weeks. The earlier price reductions which we saw in California seem to have had more impact, as April kernel exports from the US were 15% up in comparison to the same month last season. This brings the total balance at a plus 4% level for the year to date shipments to the EU. Despite this bright spot from Europe are global year to date figures still 7% behind last year, preventing prices from a potential increase.
The liquidity in the private market is at very thin levels, keeping the market tight. The small quantities available are priced according to the offers of the TMO, pushing the market upwards. So far prices remained relatively stable in terms of exports, as the price increase in TLR is corrected by a weaker USD/TLR rate at the moment. The gap between Giresun, mainly offered by TMO, and the Levant variety, still available on the private market, is becoming smaller as well. In addition to the low availability are offers driven by rumours the speculations of the coming crop, which are differing between the 600.000 and 650.000 MT. mark. A relief is therefore not seen as a logical outcome, making it worth to consider current offers around.
After an increase in cashew kernel prices over the last three weeks, we now see fairly stable prices. WW320 are currently being offered from Vietnam between the 4.40 and 4.50 USD/lb FOB. Kernel business is mainly being done for nearby positions from Vietnamese and Cambodian Raw Cashews Nuts. It seems that still quite some business needs to be done for the second half of the year on both the RCN and kernels side. There is still quite some RCN available in West-Africa, as producers and traders were expecting same prices for their RCN as they had last season. Also Vietnam was less in a hurry to buy compared to last season. Although with the incoming rains in Benin, Nigeria, Ghana and Ivory Coast it will be more difficult to dry the cargo over there. So for sure the quality will drop in those regions for new material. Good quality stocks in hands of traders in Africa are sold at a premium. Guinea Bissau still not really started because of high farm gate price set by the government, situation should stabilize in the coming weeks unless something unforeseen happens. We expect the market to move around the same levels for the coming months.
With the season now in full swing factories are busy with as much product in as possible and started their production. First containers of NIS are on the water and Kernels are about to be shipped as South Africa has a slightly earlier season than normal. We have not heard about shipments from Australia yet, but it is clear that the market really needs this merchandise to keep things going. It will not immediately bring relief for people that want to cover more, but at least the supply lines are getting filled again. Suppliers are still a bit conservative on their volumes and as such not making any additional offers, but with more information available we hope this will change. We believe there is still some unsold product although in limited volumes. We recommend to follow the market closely and cover your needs.
The situation in the market remains unchanged. Quite a premium needs to be paid for spot positions due to logistic problems causing delays in product to arrive. For later positions prices are quite a bit lower and as such it is recommended to buy hand to mouth.
The downwards trend, which we’ve seen at basically al growing origins, continued during the past few weeks. Although firm discounts could be found from Eastern Europe – on top of the already reduced prices – remained buying interest on a poor level, driven by doubts on quality. As the European product is already ten months old, it is recommended to focus on trusted (certified) packers only. US packers are trying to gain sales as well, which leads to further price reductions. Despite the nervous appearance of the US industry, show inventory reports that figures are still below the pace of 2016. It remains to be seen whether prices will come down much further or slowly stabilise once the bottom is in sight.
The Turkish hazelnut market isn’t very active, due to a combination of low availability and slow demand. Prices are becoming slightly firmer, as both farmers as traders keep their fingers crossed for a positive interference of the Turkish Government. With the coming elections in sight, some ‘promises’ towards the hazelnut industry might come around. The expectations for the new crop are not pointing towards a relief either, as rough crop indications are adjusted downwards after the cool weather in April. As the Turkish hazelnut market has proven itself to be unpredictable in many occasions, could coverage be seen as a decent decision at the current levels.
The prices of cashewnutkernels are firming a little bit. Most of the spot stock available for prompt shipment is sold and processors feeling more comfortable now.
It is our recommendation to cover at least 50-60% of your demand for the remainder of 2018 since it seems the tables are turning.
There is not a lot to report on macadamias at the moment. The demand for kernel remains strong with only limited offers available. The style 0 and 1 are particularly hard to get at the moment, but also style 4L is limited in supply. It is a bit hard to say what the reason is. Obviously the market has been empty for quite some time resulting in some early covering for the first positions, but does this mean a big portion of the crop is already committed? Or are sellers simply cautious after the bad experiences of the past years when crops were disappointing. Another reason could be that processors first allocate product to the NIS market as prices are still good there even though a touch softer than in 2017 season. For a lot of the product with a lower meat yield (SKR) the NIS market is still more profitable.
The prices of Pecannutkernels are stable. Most of the information is known now. Total crop is in and processors are happy with their positions. New crop will only come in from October onwards and until than we do not expect significant changes. On Halves we would recommend to cover positions as this size sometimes become a bit scarce towards end of the season.
South African crop is developing well. As China seems to slow down interest on inshell, also South Africa is preparing now for more processing and we might see more offers from South Africa for pecannutkernels. We would be glad to offer you first class South African Pecannutkernels in 6-8 weeks from now when the crop starts to come in.
During the 2nd half of April containers will arrive in Europe and USA and we trust that offers will be easier to get in 4-6 weeks from now and we probably will see better prices than as well while the very limited stocks for the time being are still causing prices to be firm.
First batches of US and Chilean origin material are being loaded by Eastern European factories these days. Current pricing in combination with the poor availability of industrial grades on spot Europe bases for US/Chile loads, is turning these routes into interesting alternatives for (nearby) needs. Despite the noticeable benefits for European buyers, we do still see quite some reluctance towards these routes. It remains to be seen whether some Eastern European factories succeed to change their doubtful image and eliminate a share of the concerns which are withholding buyers to give these routes a try. Demand for Californian product remains a bit slow. The trend of decreasing prices, which we’ve seen for several weeks in a row now, is therefore not expected to come to a hold. With suppliers eager to sell out their last stocks, the hand to mouth attitude of most buyers is not expected to change.
We don’t see a lot of activity on the Turkish domestic market at the moment. The overall low availability keeps the market away from a relieve, short processors are covering hand to mouth via smaller calibres, larger sized kernels are mainly committed for Ramadan purposes. Suppliers appear to be (carefully) confident on the development of the new crop. Although weather conditions have proven themselves to be absolutely unpredictable in the past, the risk on frost is in the growing regions basically over. The mild temperatures this season allowed the crop to develop even further than usual for this time of the year. As a remark, some first rumours of potential insect damage were spread, but not generally confirmed (yet).
The total shipment figures (export and domestic) came out at 1.616.241 while in the past season this was 1.447.107, an increase of 11,69%. Significant and a reason for growers and processors to sit comfortable on their position. Prices did not really react a lot but there was no reason at all to discount prices. After that, in the beginning of this week, TNT report came out at 2.51 billion lbs as this was a positive surprise as most indications were around 2.3 billion lbs. The growers and handlers are chewing on this now and will probably will await the first subjective estimate in May before making a call on the direction to take. With the growing world supply, a bigger crop is needed and it looks like the frost did not do much damage and the market be prepared for another record crop to come in.
The market of cashewnutkernels is quite interesting at the moment. Many buyers show sound interest in nearby and forward business, and in the past weeks some volume was booked for -especially- nearby deliveries. It indicates the spot and nearby positions are mostly sought after and are traded at a premium vs replacement values.
With the general weaker trends, forward covering is now done hand-to-mouth and buyers continue to follow the market closely.
While the sentiment of the past months across the market was for WW320 prices not to drop below the Usd 4,50 per lbs mark FOB, today we see offers for WW320 lower than that and nobody is sure now that prices will not come down further.
Talking to many buyers around the globe, most of them are interested when prices will come down closer to Usd 4,– per lbs. The million dollar question is : will it come down to that level. And the other question : what if prices suddenly rebounce at Usd. 4,25-4,30 / lbs and origin sellers see the changed sentiment in the market ?
Looking at the chart of the 6-years kernel prices, there seems room for prices to come down. Of course the market reality has changed as well over the past 2 seasons.
Generally speaking, demand is strongly up around the world and whereas price barriers were expected at certain levels, the price rises have been taken in the stride and did not cause demand to slow down.
The official import figures into 3 main destinations show continuous growth over the past years.
The current imports into the USA and EU for January and February 2018 are showing an increase of 43,76%!!
Especially Cambodia and Vietnam (in the combination) will have a bumper crop which might mean (s)lower interest for the West African crop.
Supply for RCN from Africa remains an interesting point to watch. The current available material (first flower crop) is of good quality and there is sufficient stocks around for the moment. However, there are 2 flowerings still to be harvested.
Demand: The higher prices are now calculated in the shelf price as well and according some big retail sellers, demand is slowing down a bit. The real impact will only be known in 4-6 months. The big advantage for the European buyers is the exchange rate well above 1,20 helping them to keep the price on the shelf around the same level and (probably) even take some extra margin?
There is not a lot to report on macadamias at the moment. The demand for kernel remains strong with only limited offers available. The style 0 and 1 are particularly hard to get at the moment, but also style 4L is limited in supply. It is a bit hard to say what the reason is. Obviously the market has been empty for quite some time resulting in some early covering for the first positions, but does this mean a big portion of the crop is already committed? Or are sellers simply cautious after the bad experiences of the past years when crops were disappointing. Another reason could be that processors first allocate product to the NIS market as prices are still good there even though a touch softer than in 2017 season. For a lot of the product with a lower meat yield (SKR) the NIS market is still more profitable.
First batches of US and Chilean origin material are being loaded by Eastern European factories these days. Current pricing in combination with the poor availability of industrial grades on spot Europe bases for US/Chile loads, is turning these routes into interesting alternatives for (nearby) needs. Despite the noticeable benefits for European buyers, we do still see quite some reluctance towards these routes. It remains to be seen whether some Eastern European factories succeed to change their doubtful image and eliminate a share of the concerns which are withholding buyers to give these routes a try. Demand for Californian product remains a bit slow. The trend of decreasing prices, which we’ve seen for several weeks in a row now, is therefore not expected to come to a hold. With suppliers eager to sell out their last stocks, the hand to mouth attitude of most buyers is not expected to change.
We don’t see a lot of activity on the Turkish domestic market at the moment. The overall low availability keeps the market away from a relieve, short processors are covering hand to mouth via smaller calibres, larger sized kernels are mainly committed for Ramadan purposes. Suppliers appear to be (carefully) confident on the development of the new crop. Although weather conditions have proven themselves to be absolutely unpredictable in the past, the risk on frost is in the growing regions basically over. The mild temperatures this season allowed the crop to develop even further than usual for this time of the year. As a remark, some first rumours of potential insect damage were spread, but not generally confirmed (yet).
The first (unofficial) crop reports will come out in a couple of days. Most of the almond handlers are expecting a crop now around 2.3 billion lbs which should be OK. Growth could have been better but due to weather circumstances there is some crop damage. Prices are stable for the time being until more information is known.
A question mark for the USA Almond industry is what the impact is of the trade ‘war’ between USA and China. This will have an impact which is hard to estimate for the time being but can be serious.
The total world supply is looking promising. Due to good crops in all producing origins, processors are just covering their hand to mouth requirements and await prices to come down further before covering their additional needs. Prices of RCN in origins are coming down, West-Africa started really high but came down with approx. Usd 300-400 per mton over the last two weeks. However after this price correction, the offers from West-Africa still look quite high compared to local alternatives in Vietnam and India. RCN availability in the main processing countries (India & Vietnam) is good and prices are affordable. Those origins are not in a hurry, as they were the previous years, in West Africa to cover RCN for processing while sufficient local crop and stocks are available. As prices of RCN are coming down, kernel buyers are also waiting for better prices to cover requirements and just buying spot product to cover their needs. The big question is: where will the market find its floor? That is a hard question to answer. At the moment prices have eased quite a bit and especially in Euro terms are a lot more favorable compared to last year. This might interest buyers to do some covering, but for now it looks like most people are sitting on their hands to wait for a further decline. Whether that will happen we will only know later…… Our recommendation is to cover hand to mouth for the time being but watch the market closely not to miss the moment that it hits the floor.
The macadamia market is currently quite hard to read. It is difficult to find offers, which is rather unexpected. Based on the expectations of the crops one would expect the market to ease a bit, but the contrary seems to be happening. Sellers are conservative since they have been caught by adverse weather conditions previously. Besides that we still see a great interest of sellers to move more volume to China for NIS before releasing more stocks to kernel. It will be interesting to see what the Chinese market will do with this stance as they do also expect some more volume from their own production, but their crop will only become available from August onwards. In Europe there is currently strong demand, but predominantly for Australian and South African product. Kenya has been blacklisted by a few of the key customers. Last season there have been quite some problems on quality by smaller packers causing this move. This is really a pity since there are very good packers from Kenya that can supply according to the quality standards. For the 2018 season we expect Kenyan volume to be needed, because even though South Africa is looking at a bigger crop we cant really see that they are currently having enough volume to fulfil all of the demand. In the years to come South Africa will consistently grow their volume as a lot of young trees are coming into production and as such be crucial for Europe. Besides the demand from Europe we also see Asia and US getting more active. Most of the demand is currently for styles upto Style 4. For the smaller sizes volumes are quite scarce since there has been a fair round of buying already earlier on and most volume sits in the wholes and halves. All in all an interesting market to say the least. Based on the above we recommend our buyers to make sure you cover your booked sales and not leave open positions.
As a lot of product is committed to the processors and the remaining stock in hands of financial independent traders/big farmers, we do not see much room for prices to ease until more will be known on the new crop. Therefore it is our recommendation to be covered until September/October 2018 when the information on the next crop will become available.
There is quite a wide gap between spot available product and April onwards. Reason is the limited availability on the spot. It is expected that spot prices will come down during April/May when good quantity of new crop will arrive in the market. Prices in origin are more or less stable. Most factories have bought the product for processing and first have to ship now and turn product into money before they are able to buy additional stock. For this reason there is some downwards pressure on the raw material.
The price drop which we have seen from Eastern European exporters during the past weeks didn’t gain a lot of buying interest. There is enough spot product available via (central) European resellers, which is withholding potential buyers to consider options from origin. The gap between Eastern Europe and California remains relatively small, reluctant buyers are therefore not considering Eastern European product neither. As time passes and risk in terms of product quality grows, we highly recommend to handle aggressive offers from Eastern Europe with care. A stable to slightly decreasing trend is visible in the Californian market, as packers are trying to move their LH stocks. In addition to the offers from origin offers from Turkish crackers are actively spread, which isn’t pushing the partly to well-covered buyers European buyers either. A hand to mouth attitude can be advised. The Chilean industry appears to be in a league of its own, still offering well above California. However, some lower offers can be found, which might indicate some small cracks in this Chilean front.
Not a lot of activity is seen on the Turkish export market. Prices have remained stable in terms of the Turkish Lira, as the small relief on export prices is in line with the weakening exchange rate. We don’t see firm speculations on the new crop yet, as the industry still faces potential frost damage coming weeks. So far the conditions are in favour of the crop, pointing at a possible relief for the new crop.
The last week(s) have been quite good for the developing of the blossom and the bee activity. It looks like the ‘panic’ of a couple of weeks because of the frost settled down and everybody is in agreement that we have to be patient for another couple of weeks to know the real impact. Prices moved up significantly but new crop offers are discounted now. Due to very good February shipment figures (up approx. 35%), the market remains firm and it not expected to come down much over the next weeks.
The prices of cashewnutkernels are under a bit of downwards pressure for shipment positions. SPOT remains (very) tight. Main reasons are as follows: – Good RCN crops around the globe. Especially Vietnam and Cambodia are reporting a total crop around 500600.000 mton. Whether this number shall be reached in the end is not the point, it creates sentiment that reduces prices. – India was pushing for early RCN shipments as they were ‘out of stock’ but their demand is a bit slower now although they still will try and get the quantities in as their crop seems to be later than normal. Size wise their crop seems average. – RCN prices generally are easing a little bit as, especially Vietnamese processors, are not showing the same buying interest (as they did last year) and as Vietnamese processors fear the lower kernel prices will not make the RCN parity. – Several kernel traders are offering (with limited selling) forward contracts at lower than replacement prices. – Kernel demand for shipment is slow as most buyers are awaiting better prices. Where will the bottom be and buyers start to cover their positions as it fits their calculations and (especially in Europe), they take advantage of the exchange rate. Because of the above we recommend to cover hand to mouth but watch the market closely as it easily can change when buyers start to cover and increasing demand can ‘convince’ packers & processors again to increase their price.
The past weeks have been quite active on macadamias. The Chinese returned after Chinese New Year. The sales went a bit better than anticipated, but apparently there are still some stocks. Nonetheless the interest for new crop is strong with prices a bit weaker than closing prices of last season, but still firm. A slight relaxation on the prices (again, in comparison with closing prices of last season) is also needed, but it is expected to be marginal as supply is only growing a little bit while demand is growing. On kernels there has also been increased demand. We see a slightly more cautious approach, but continuous interest. Australia announced to grow only by 500 mton NIS, which we believe is a bit conservative, for now there won’t be a lot additional to offer. Some relief has to come from South Africa, which will, all going well, be by far the largest producer of macadamias in 2018. This is good news, because the market needs more volume from this origin with high quality product. Kenya will be more difficult in 2018 with very high prices in the field and Malawi is still facing problems with their crop as well. From China we will only know by August how their crop develops but first indications are that there crop will be between 20-30.000 mton NIS. With the increasing interest from China again and the good kernel coverage taken by US and European buyers at the moment, we do recommend our buyers not to wait too long as good quality macadamias in decent volumes might become scarce again. Offers are available upon request.
The Eastern European market remains dull. Some suppliers are running out on their last LQ options while the long position on LH grades are giving special opportunities to buyers as packers/processors would like to move them. A similar situation can be found in California. The availability of Light Halves is exceeding the options on other grades by far. A focus is on the offers from Chile now. First price indications were traditionally announced during the Gulffood exhibition in Dubai. Prices around Usd 13,50 per KG seems to be a fair (and safe) average. Firm interest is still slow though as most buyers, together with the more ‘careful’ suppliers, are awaiting more information on the crop, also from the bigger suppliers. Our recommendation would be to keep a close eye on the market. The availability from California in combination with the increased activities/offers from Chile could give better (price) opportunities in the near future.
Market in Bolivia is very interesting, Bolivians are seeing both strong demand and no demand at the same time. Strong for prompt shipments (but no availability) and weak for the forward shipments as buyers are following a hand to mouth approach. Factories today are stock rich, cash poor and are awaiting payment against containers which have been shipping in February & March. Once paid, factories will be back in the raw material market. Peruvians have very strong buying interest from South Korea so they are continuing to purchase both final product and raw material from Bolivia, we will follow with interest how this new route develops.
The prices for USA Pecannutkernels are going up at the moment. Most of the raw material, approx.. 85% is sold to the processors and the remaining 15% is in hands of very strong processors who want to cash on their stock and selling only bit by bit. Therefore also kernel prices moved up and are not expected to ease again as the new crop will only become available during October. Therefore it is our recommendation to be covered until November/December. South African crop will become available during June/July and is mostly sold as inshell to China, upto 80-90%. In case of interest for inshell or kernels, please let us know.
The sentiment of the Turkish hazelnut industry seems to be -mainly- driven by the today and forecasted weather conditions. While the interference of the Turkish TMO was indicated as the most important factor for further developments, no big differences are seen, due to the slow supply & demand these weeks. The early blooming, boosted by the warm weather was good but also increasing the risk of any potential frost damage for the new crop as it is still early in the season. As long as the risk on frost remains, which is till the end of March, most suppliers will sit and wait until the period of any potential frost has passed.
Due to the frost they have had in California, sellers are reluctant to offer although most still are expecting a good crop. Not a new record crop of 2.5-2.6 billion but still around 2.2-2.3 billion pounds should be possible, according to the various information channels. The February shipment figures will come out shortly but are expected to be good again and uncommitted inventory to be limited. Because of the above, in addition with almonds still being one of the most favourable priced nuts, and continuously increasing interest worldwide, we do not expect significant discounted prices until new crop arrives but also no increases again as all information is available. Therefore we would recommend to buy hand to mouth for the time being.
Prices of RCN remain firm because the Indian processors are still pushing purchasing of RCN as they missed the boat for the Tanzanian seeds. Kernel market remains stable with buyers filling in nearby demand for March & April shipments. Crops are starting in West Africa and looking good while also the Vietnamese in combination with the Cambodian crop is looking promising. As written earlier, we hope that demand for RCN will slow down a bit so that prices will come to more realistic levels to realize a sustainable market.
Over the past week the crop forecasts from both South Africa and Australia were published. South Africa is looking at a crop of 54.000 mton (inshell) at a volume much more in line with the number of trees in the ground. The past years we were waiting with great anticipation to the trees coming into production, but became a great disappointment due to very dry weather conditions. It seems this situation is now over with especially Levubu and Mpumalanga expecting big jumps in production. Kwazulu Natal will have a decent growth, but not as much as the other two regions as last year they performed already quite well. Even though it all looks very promising it is wise not to get too overexcited as the risk is not over yet. The overall quality is expected to be a bit down. For Australia the news of a crop of around 44.500 mton (3.5% moisture content) is the opposite and we wonder whether this is not a bit conservative. The growing conditions were quite good and one would expect the new trees that come into production to give the volume a little push. Nonetheless, this is the figure we have to work with for now and will mean that there will be hardly any growth from Australia. Kenya is expecting a bigger crop as well, but there are great concerns about the smuggling taking place by Chinese traders that export the product as inshell through Tanzania.
The market circumstances remain the same. We see a very tight supply situation in particular for snack grades. As such first shipments from in particular Kenya and Malawi are booked to keep supply going. There are also some new crop offers around, but still very limited as the crop size is still very uncertain. As a matter of fact there are only a few prices for inshell presented to the field and people are waiting for the intakes.
We haven’t seen a lot of movement in Eastern Europe during the last two weeks. The European market remains saturated, with an overall low demand. The few enquiries that are in the market have a strong focus on industrial grades, keeping quarters and pieces somehow stable. The availability of Light Halves seems to overshadow the current and further expected needs as well. The relatively high availability from the US isn’t helping either, as current pricing from California is withholding buyers from turning to Eastern Europe due to narrowing price differences. As buyers understand that a price increase is not likely to be seen on the short term, is the market expected to continue on a dull route with some hand to mouth coverage.
After we spoke about no signs of interference of the Turkish TMO last report, this situation has completely changed this week. The Turkish TMO announced that they will bring product to the market again, at prices roughly 10% higher than we’ve seen on the day to day market in February. The European spot market reacted accordingly, with firming prices, especially on blanched kernels coming from the Giresun variety. It remains to be seen whether the Turkish market is able to follow at the levels of TMO, following the market closely is advised.
Due to very cold weather conditions during bloom, farmers and processors become reluctant to offer additional product as this might have a very bad impact on the development of the crop. On top of excellent shipment figures in January and expected good shipment figures for February, this news is not helping the market to relax and prices to ease a bit. We are following the situation closely for you and will keep you posted.
SPOT stocks in the countries of destination are very low, maybe even too low with Lunar holidays around the corner. There are still some processors looking to move product for prompt shipment, i.e. before Lunar Holiday, but this will be almost over. These discounted prices may be a good buy, but with buyers on the bench -hoping or expecting lower prices- one wonders what this will do to the general market. On the short term we expect prices to be stable, but there is a fair chance that prices of kernels will come down a bit from today’s levels for later positions.
If the pressure mounts, it might push prices on short term down a bit. Buyers are covered until April but after that not many positions are covered. It is a bit the same scenario as last year with the difference that crops in Vietnam look better and contracts with supermarkets are done at higher prices than last year. In addition to that, the 3rd biggest market (Europe) will have the advantage of the exchange rate.
The increasing interest for natural cashewnutkernels is to be dealt with, with caution, since the wider cashew industry is not well equipped to supply ‘safely processed and sanitized’ kernel that can be consumer without processing.
The market is still quite desperate for spot product and the expectation is not that this is going to change till new crop arrives. Over the past months quite some activity has taken place to book the early shipments from Malawi and Kenya, but this is now also drying up. Prices for new crop from Kenya are more or less at par with South Africa especially for early shipments. For new crop we see the first offers arriving and they are also still firm. We are waiting for the crop estimate from Australia. First indications were similar to last year, but we have to wait a little longer. SAMAC will come out shortly with their official crop estimate, but we already got some information and they do expect a better crop, which is also needed and expected. The drought situation is over in most of the regions. There was some hail in certain regions and some varieties tend to have some problems, but overall very positive. It is a bit similar to last year where we also were very positive, but where the final outcome was very different. We don’t need to say much more.
EU: The market for Eastern European walnuts remained quite dull during the last two weeks. After a weak start of 2018, followed by a small boost of demand from Turkey in January, the market returned to silent mode again. Suppliers seem to become less confident on their remaining positions, pushing the market from relatively stable to lowered offers from origin. Buyers don’t feel pushed to take advantage of this price increase straight away, which prevents the market from stabilising either. As always, price is just one aspect when dealing with Eastern Europe. In terms of quality, it might be wise to consider the options from reputable packers while they still have sufficient material in combination with the current market conditions. Please feel free to share your needs, we will be happy to serve you with an appropriate offer from trusted sources via our reliable routes.
USA: Californian handlers are moving along with the current downwards trend, while waiting for the shipment figures of January. The overall availability of Light material, especially halves, is (at least) sufficient. The situation on pieces and combo material is quite the opposite, as availability has started to become a problem in some occasions. The difference between Light 80% and 20% halves mixes is becoming smaller accordingly. An even softer kernel market is expected by most parties at the moment, as some packers started to push out their remaining product in order to avoid extra cold storage costs. Covering hand to mouth is advised on the light halves for the moment, pending needs on pieces / combo material are recommended to cover.
The situation in Turkey remained firm. Although rumours about less demand from the domestic market and middle east were spread, were no signs of relief seen. The situation in terms of large calibres seems to become even firmer, as prices are slowly increasing for 13/15 sizes. While the TMO doesn’t show any sign of interference of the market, are stockholders not triggered to jump back to the market at the current levels. The predictions for the new crop are not pointing at a relief either, as weather conditions remain mild and the risk of an early 2018 crop remains.
The market of USA Pecannutkernels remained unchanged. Mexican offers were giving some downwards pressure to the prices but prices stabilized now.
Chinese demand is out of the market for the time being and it will depend on consumer sales during Chinese New Year what prices will do. Chinese demand will focus on South African crop first, estimated at 15.000 mton.
It is our recommendation to cover as we do not expect prices to come down much further as Mexican product is nearly all committed now.
The almond market is highly interested in the Jan shipment figures which will be announced February 09, 2018. The shipment figures are expected to be a record again. Good shipment numbers are needed to move a good crop. Some types and sizes are not that easy as Monterey variety, Carmel 27/30 and 30/32 and the big size NPX Almonds. Bloom started and a major part of the valley will be blooming in the coming 2 weeks. So far all looks OK and calculating the bearing acreage with an average yield per acre, the 2018 crop could be 2.5 billion lbs, approx. 10% increase. With the growing demand worldwide and the competitive prices of Almonds in comparison with other nuts, it should not be a problem to move this size crops. NPS 23/25 are indicated between Usd 3,25-3,30 per lbs basis FAS California.
EU and USA market :
Kernel supply in the destination countries is tightly balanced, any demand in fact has a price strengthening effect.
The market of cashewnutkernels is moving up slightly because of limited uncommitted stocks in Europe and USA. It seems end of the year sales have been good, since buyers are in the market for relatively nearby deliveries.
Currently, prompt deliveries are fetching an increasing premium in comparison with the origin prices from especially Vietnam.
Indian kernel prices jumped up much in the past weeks, and the new is that the Indian market is too empty on RCN, causing the risk of too limited kernels being available, resulting in higher local kernel prices.
Supply: currently the supply of RCN has to come from the Tanzanian and Indonesian crop. Both crops are OK but also prices are high and remain high despite buyers are working on lower kernel prices. Mozambican crop was not so good but most of the Mozambican crop is processed locally anyway. Processors are awaiting new crop from West Africa which will start coming in shortly now. Right now the signs are for a later crop than the past 2 seasons, and demand for the first new crop is expected to be good, but also we can see that the availability of the RCN from West Africa will be too late to fill early demand from India and Vietnam, resulting in some uncertainty on the direction of the prices when the volume of the crop comes in.
On the other hand, there are offers from various African traders already, prices based on last year ending contracts. For example, prices are mentioned for Nigeria product already between Usd 2050-2100 per mton.
Demand: most buyers are covered for their nearby shipments (1st quarter) and partly for 2nd quarter but also awaiting cheaper kernel prices. How realistic this is will be known in a couple of weeks. We do not expect big changes in the nearby future unless something dramatic and unforeseen will happen. World supply should grow slightly while demand is expected to show growth as well (kernel exports for 2017 compared to 2016 was up slightly).
Consumers so far are not seen to reduce their consumption because of the higher kernel prices, whereas European consumers of course have an advantage of the stronger Euro now. Kernel shipments from Vietnam will be down in February because of the holidays in February.
Our recommendation would be to be covered until April and watch the market closely for April onwards. When calculations allow, probably take cover up to 50-60% of your requirements.
Interesting conference in Macau next week: http://www.cashewconvention.com/
Asia is playing a more and more important role in the world of nuts and definitely also on macadamias. For many years kernels have been sold to traditional markets including Japan, but in recent years countries like South Korea, Taiwan and China are knocking on the door and even India is getting slowly a taste for macadamias. The kernel market is looking very healthy in this part of the world even though prices have increased a lot. Nonetheless buyers are positive for 2018 season. The NIS business is currently waiting for Chinese New Year. There is still some inventory left, but after talking with quite a few processors they informed us that the market picked up speed and we could see that with all the machines in full production. In general the market is growing in China, but a little bit at a slower pace due to also high prices. Therefore prices might ease a little bit compared to the last part of the crop when prices were extremely high, but will still be firm. The factor of Chinese (Yunnan) product is limited as there are still a lot of issues on the quality. This might take a while to sort out, but we will only find out what the real situation is in October when the International Symposium is held in the main growing area in China.
For kernels we do remain our advice to take some cover. The market is empty and we have to work with the product available now. The first new crop comes from Malawi & Kenya (limited quantities though) and will be shipped during March/April. The first shipments from South Africa will only commence in May/June, followed by Australia. The expectation is that prices will remain firm for first shipments. For later shipments it is a bit hard to tell and will strongly depend on China and the further development of the crop. We would recommend you to be covered for first new crop shipments until August/September as there is a lot of interest for those shipment positions and nothing as carry over and up to 60-70% for the later shipment positions.
Due to lesser Chinese demand, prices for Pecannutkernels came down a little bit.
As the Chinese will be out of the market for some time it is expected that the market will go forward in a stable pace.
The strong Euro might make it interesting for European buyers to cover their future requirements until new crop
The market of Brazilnutkernels remains a very interesting one. The raw material market has been challenging pricewise as the collectors were expecting historically high prices for their raw material, having earned really good prices for their goods last year, whilst factories have been pushing back for lower prices knowing that export market will not be willing to support these high prices. As you know demand was heavily affected by the high prices last crop year so it is imperative that prices come back to more reasonable levels.
It seems that a balance has been found between the collectors and the factories expectations and raw material is finally flowing.
The big advantage for the brazilnutindustry is that consumers are asking for brazilnutkernels again after they disappeared from the shelf so most supermarkets want to bring the product back on the shelf from May/June onwards when new crop should become available.
For the moment we would recommend to cover first new crop and probably 20-40% for the remaining positions until the end of the year.
Side note: it is very positive that the brazilnutcrop is picking up again and that collectors and factory workers can get an income again as past season has been very hard for them. It is very positive that the world demand continues so this area will survive.
In our previous report we wrote about the lowered import taxes for walnutkernels into Turkey what potentially could increase demand. So far the increased buying interest is mainly for Eastern European product as a lot of Turkish traders have direct contacts in those origins and not for US product.
Buying interest from Europe for Eastern European Walnutkernels has been weak over the past weeks.
Suppliers are eager to sell some of their current positions to limit their risks and possible ‘special’ deals can be confirmed.
A lot of speculations are being spread about the latest developments in California. The increased interest from Turkey, caused by the reduced import taxes, is fact and has a positive impact on the overall demand.
The Chinese market is showing less interest as they have their own crop and waiting for the Chilean crop now.
While some handlers advise their customers to cover their requirements before the market moves up further, others are recommending to hold off a bit and await discounted prices.
The low availability of large pieces is however a fact and therefore for this special product we would advise to be covered.
The situation in Turkey remains tight, driven by cautious middleman and factories whom keep their stocks off the market. Additionally there are concerns about the new crop as the mild weather conditions could potentially lead to an early bloom (and therefore higher damage/frost risk.
Keeping in mind that Ferrero is not even included in this picture, the market is not expected to show any sign of relief. Although all these factors would prevent the market from coming down, there are still some unknown factors who could interrupt this current market status.
The political position of Turkey for example, which could be affected by their current war policy, might impact the exchange rate and export prices accordingly.
The last few weeks prices for cashews slowly, but steadily went down due to lack of demand. During the past week however we have seen some increased activity for nearby positions. This resulted in some slight price increases on the spot. Stock positions are fairly limited and as such supply and demand tightly balanced. This situation is expected to hold for the coming few months as supply will be tight due to factories being closed in Vietnam as well. As soon as some demand comes in the market sellers will increase their prices as they are currently selling under their cost. There is not a real surge of demand expected, but everything will be taken as an excuse to increase. We also see that February/March shipments are at a premium. For later positions we see more attractive prices showing that there is still a feeling that prices should go lower knowing that current levels are still historically high.
During the past weeks there has not been a lot to report. Most factories closed already early because of lack of product to process. The short position for current crop as such has not changed. There is hardly any product available and this situation is not going to change till new crop. The only relief will come from early shipments from Malawi and Kenya, but for these early positions there is only limited product available as the bulk also comes in later together with South Africa and Australia. Prices for these early positions are very high. The NIS market is a bit quiet at the moment, but that is in line with expectations. All product was shipped early in the season and was there for the main sales moments in the Chinese market. 11-11 was a bit disappointing, but the mentioning of stock levels after 11-11 is not uncommon as there is no supply in between. It will be interesting to see how the Chinese New Year sales go to give a better idea on the situation in this market.
For new crop there has already been a some buying of NIS. Most buyers however are a bit reluctant as prices remain very high. On the other hand there have been some interesting developments in terms of the import tax according plan for Australia, but also South Africa is seeing lower import taxes. Another difference is the exchange rate of the Chinese Renminbi. Last year we were looking at levels over 7, where we are today back to 6.50 levels to the Dollar.
On new crop kernel there has been some buying going on, but mainly for the first half of 2018 with early shipments from Kenya and Malawi. For later positions both buyers and sellers are reluctant to commit. Sellers don’t want to run in the same problems as last season when they were caught be adverse weather conditions that pushed basically all origins back. Australia had Cyclone Debbie and most African countries had drought situations. Last year this resulted for difficulties to execute contracts and that is something everybody wants to prevent from happening. Buyers are uncertain whether they should book at today’s levels as they are high and it is also still very early. So basically nobody is really in a hurry, but one should remember that good quality product is only in limited supply.
Eastern Europe: The market continued at a firm level during the start of 2018, as a new factor came into play. The Turkish government decreased the import taxes for walnuts significantly, from 43,2% into 15%. This is expected to put more pressure on the available product, mainly shipped by Turkish traders / handlers based in Ukraine. As a result, prices for European import (mainly from Romania and Moldova) are slightly increased as well. It remains to be seen whether this price increase will be justified by the increased demand from Turkey. So far, the price increase on quarters seems to be in line with the low availability of material. Prices for halves are still disputable, as we’ve seen several factors whom indicate large availability and pressure at sellers to move some product. Covering nearby needs is advised, as a price decrease isn’t expected on the short term.
USA: Prices from the USA seem to be on the return. December shipments were in line with last season, being roughly 1% above December 16. Despite these positive figures, are the year to date shipments still far behind last year (inshell exports -30.7% / shelled exports -8.2%). Californian suppliers are eager to move some stocks, providing some relief to the market. This downwards trend might be slowed down by the increased import levels in Turkey, as described above. So far Turkey has been one of the most important absent buyers, this might change due to the more favourable import rates. The January shipment report will provide more insight in the actual impact on the demand from Turkey. Looking back on the Turkish imports of last season, which were YTD at 111 million inshell pounds in comparison to 57 million inshell pounds this year, the impact might be more than just a drip on a hot plate..
The Californian almond board reported another record for the November shipments. A surplus of 30,9% has been quoted in comparison to the same period last year, resulting in a total year to date shipment figure of plus 7,7%. The market reacted directly after the publication of these figures with a price increase of roughly 5/10 cents per lb. With regards to the new crop, rumours are spread about a lack of rain in California. The actual impact remains to be seen, keeping the existence of water reservoirs in mind. Based on the comfortable position in which Californian shippers have found themselves this season so far, is a price decrease not expected in the nearby period.
We are coming towards the end of 2017 where we have seen prices going up very quickly during June/July and then dropped more than 10% again and find stability around today’s prices. An interesting season with a number of remarks to make :
Then to facts :
What to expect next is not easy to tell, especially keeping the above points in mind.
There are rumors (again) that the Vietnamese crop will be less than 2017 season due to the heavy rains during 2017 season causing diseases in the trees. Cambodia would suffer from the same phenomenon. A percentage is hard to predict.
Fact is that Tanzanian crop is good and arriving in Vietnam for processing. Prices for raw seeds from Tanzania came down a little bit due to very limited demand from kernel buyers. And still demand is slow and not anticipated to run up in the coming weeks with the Christmas holidays ahead of us.
However, Vietnam needs at least 100.000 Mton per month for kernel processing to supply China and the Western markets, Japan, South Korea and the likes. And the question is if there is sufficient RCN in the pipeline to sustain the physical kernel demand.
Our recommendation is to be covered for the beginning of 2018 (1st quarter) and await further information on the crops of the Northern Hemisphere before making additional calls.
Keep in mind that shipments from Vietnam will be slow during February because of Chinese New Year and thus make sure that you have sufficient stocks for March/April out of January shipments.
With the season being over and only very little product available we started to focus on 2018 crop. The first crop to come is from Kenya and some volume from Malawi. Most of the Malawi product seems to be committed. Also from Kenya coverage is taking place, but it is a very risky operation for the processor. The last couple of years competition has been extremely fierce (new factories + Chinese buyers) making it very difficult to get their volumes and if so at increasing prices throughout the season. The question obviously is whether this is likely to happen in 2018 again. One thing is clear is that it makes processors more reluctant to offer as they don’t want to make a loss. Guatemala will follow and there it will be interested to see whether the trend of sending out more NIS is going to hold. Most of the product from Guatemala traditionally gets consumed in the US market, but some volume also went to Asia and Europe. This supply was rather tight in 2017. After that South Africa and Australia are the ones to really start filling the supply lines. Crops are likely to increase, but this weekend we realised again that it is really to early to make any estimates. In a certain region (Alkmaar, Schagen and Brondal) in South Africa a big hailstorm destroyed 30-40% of the crop. We hope this is only an incident, but with the drought and the cyclone Debbie still fresh in our memories we don’t want to get over-excited yet.
From the demand side there is quite a bit of interest, but it is still early days. We do keep our recommendation to make sure that you have at least cover your needs till July/August.
Eastern Europe: As reported earlier, the demand for product from Eastern Europe remains concentrated on light quarters. The high demand for this industrial grade is pushing prices for raw material upwards, which further reduces the gap between the source price of light halves and light quarters. Since several packers do have light halves in stock, they are eager to sell at the current prices. The small group of packers whom do have some light quarters available, are currently offering their spot positions at a premium. No relief is expected for forward positions either, as packers will find a low availability of light quarters and high prices while sourcing new raw material.
USA: In the preamble to the 2017 season, there has been a lot of discussion about the total Californian crop and the price (increase) that would come along with it. After the actual start of the season, a lower than anticipated demand from two important markets, China and Turkey, was found.
Although this leak in demand seems to be more or less covered by good sales to Europe and stable offset to most other regions, is the year to date amount of remaining product almost equal to 2016 now. The shortage of product as quoted during the beginning of the season, is therefor theoretically vanished. These figures, in combination with the potentially large crop in 2018, might encourage Californian packers to boost their sales. A firm increase is therefor not expected, we advise to follow the market closely and handle a wait and see attitude for forward demands.
Collectors are in the jungle to collect the new crop. So far so good although the prices the collectors are asking are not in line with the buying interest of buyers. Hopefully the collectors will understand in time that all in the chain have to invest in this market to get the product back on the shelf. When prices will stay high, big supermarket chains will not bring it back and that will have an impact on the social life of the Brazilnut growing and processing area. A sustainable supply chain should give a good income to the collectors and processors and a sustainable price for the consumer. We would recommend to be covered for the first new crop shipments as a lot of interest shows up from buyers who cannot wait as they declare it on their pack (mixed nuts and raisins for example; industries as the cereal industry) for which the Brazilnut is an important ingredient. For later positions we would be patient a little bit to see how the market will develop.
Prices of pecannutkernels came down due to slower demand from China for inshell Pecans. Be covered for shipments until February/March. If todays prices work in your calculations probably take some additional cover and otherwise be patient for the later shipment positions.
The November shipment figures came in at a total of 228.46 million pounds, which is again a new record for November. These results didn’t come as a complete surprise to the industry, the impact on the day to day business seems to be small. A minor price increase is seen from California, it remains to be seen if the demand justifies this change. No further change is seen on the shortage of premium loads, caused by a high percentage of chipped and doubled kernels this year. Although this should support a price increase, seems the demand for these loads been hit as well. Only specific buyers require the excellent loads, while others prefer to take an alternative with some defects at a discounted price, which is keeping the premium limited.
The market of cashewnutkernels remains stable. Prices for kernels stay in the same range while prices of RCN are coming down a little bit due to lack of interest from processors. For the moment the only available RCN comes from Tanzania. Crops so far look OK with the remark that Vietnamese crop might be less than 2016 because of the wet weather conditions causing diseases in the trees.
As written in our last report, consumption seems to remain in line with a slower increase in demand due to high prices, but overall it looks like imports into EU and USA increased in comparison with 2016. Contradictory information from packers is creating question marks. Some packers are asking to delay their shipments/deliveries while we also have demand, to fill up gaps.
The Thanksgiving and Christmas sales are an important indicator what will happen in the near future with the majority of world supply becoming available from February 2018 onwards when Northern Hemisphere crops become available.
In the last report we mentioned the crop in South Africa to be readjusted to 41.430 mton. Apparently, this was incorrect as you can see in the graph shared with the INC that still states 42.000 mton.
Something that catches the eye are the forecasted NIS exports of 21.727 mton, which are about 8.000 mton up from 2016. This is a big increase given the fact the crop only grew by 3.500 mton. Whether South Africa will reach the figure is unknown, but it is clear a lot more volume was allocated to NIS again. The forecasted kernel production of 7.027 mton is unlikely. The quality was up over 2017, but to reach this figure you need a SKR of 35% for the industry, which sounds a bit on the high side. Our expectation is that kernel production was down from 2016. In 2016 we saw a healthy increase to kernel after the turmoil in 2015 in China (arrests).
It is interesting to see how the volumes keep on moving around from kernel to NIS. A big concern is security of supply for kernel buyers and delaying product development, which is desperately needed.
Something here can be learnt from Australia that is putting more effort to it, in particular in Asia, although also their volumes are depressed and more allocated to NIS.
For 2018 the kernel market is looking very tight till July/August 2018. If you still have uncovered positions, you really need to cover. Offers are available upon request. For new crop from South Africa offers are expected shortly. We look forward to hearing about your needs. We will try to secure your supply also in 2018 with top quality product from our partners!
On NIS there was interesting news about the lower import tariff for macadamias from South Africa from 19 to 12%. This is good news in terms of competitiveness for South Africa, which is still the most important source of NIS for China. The exchange rates of the CNY to the Dollar has also improved by 4% so this is good news. On availability it is a bit early, but the Chinese production is apparently also picking up and is expected to be around 20.000 mton for 2018 season. First offers from South Africa are expected to be made shortly. The sales for 11-11 have been OK depending to whom you talk to. For 2018 we expect quality to play a more important role. In 2017 a lot of blending has taken place to at least get some volume. With the signs of a better crop we expect the Chinese market to be more picky, which is a good sign of a maturing market.
Eastern Europe: Demand from European buyers remained weak during the last two weeks. After smaller packers tried to gain interest by reducing their prices earlier this month this trend is now recognised and followed by some larger / well known packers as well. The remaining interest seems to be stronger on the ingredient grades. The decrease in demand is, traditionally seen, not a surprise, since a large share of Eastern European walnuts is used for Christmas purposes. It remains to be seen if packers are willing to trigger buyers further in terms of pricing, knowing that supply from California is down and buyers might return after new year to cover a share of their needs via this origin.
Most of the crop is in.
Most of the shipments for Chinese New Year are covered and will be shipped shortly so the Chinese demand is out of the market for the moment. This gives some relief in the market and prices came down a couple of percent.
As you can read in the figures, total supply is more or less in line with last year. As the strong demand from China is gone, we expect kernel prices to stabilize around todays levels.
A note to make is that the Mexican crop is growing fast and is expected to be around same quantity in the near future than US crop.
The latest movements in the Turkish hazelnut market are triggered by the influence of the largest hazelnut handler. Their strict buying requirements push packers with commitments back into the domestic market to find high(er) quality product, which is lowering the overall availability of premium product. The natural price increase that comes along is causing troubles for packers that have commitments, as they anticipated on lower purchase levels themselves. The lower demand from the export market can be seen as favourable in this regard, as prices are not pushed upwards by demand from outside Europe. Other origins such as Georgia remain quiet, waiting for export demand to gain strength.
The cashewnutmarket is relatively in calm waters at the moment. Prices are stable and no big changes are expected shortly. Supply and demand seems to be in balance but it remains a thin line we are walking on and any news can change the calm waters into a rough sea.
Supply: during our meetings at the VINACAS convention in Phu Quoc (which was organized very well and we enjoyed it) we got confirmed that most of the bigger processing units are having sufficient stocks of raw seeds to process until Chinese New Year holidays and start with Vietnamese seeds from March onwards.
Smaller shippers just closed their doors for the moment as they cannot make a margin or cannot get the finance organized.
(Unsold) stocks in Ho Chi Minh port seems to be OK for 1 month of Vietnamse processing (i,e. around 100.000 mton RCN).
First shipments from Tanzania arrived and also Indonesian crop becomes available shortly. Although the RCN prices are ‘high’, kernel prices remain more or less the same. Some Vietnamese packers still buying raw seeds keeping prices at levels around Usd 2.400 per mton for RCN KOR 52-53.
There are some rumors that the next Vietnamese crop might be smaller than 2017 crop due to heavy rains and pests in the trees but it is too early to tell and when the rains will stop shortly. Currently we believe that Vietnam should have at least an average crop.
Demand: so far the import statistics into Europe and the US (until September 2017) are showing a growth in comparison with 2016 while comments of various roasters in Europe, stating a decrease in consumer demand. Stocks in Europe however are still low, which is surprising with the news of lower customer demand.
It wouldn’t be surprising when we see a decline on consumer demand during 2018 but the 2017 consumer prices still were settled at the end of 2016 when price levels were lower than today. Especially in the US todays ‘high’ kernel prices will be felt while Europe can off set part of the higher prices by the stronger Euro and thus Euro prices will not change significantly.
Generally, stock levels in Europe and US are limited (because of the high prices nobody has a long position). Some buyers are asking to delay shipments as they are concerned that consumer demand will be hit. On the other hand there is some demand for reasonable volume for deliveries in the USA for this year still.
It would be recommendable for the whole supply chain if shorter (than 1 year) contracts would be settled to create a sustainable supply chain for everybody (from farmer to consumer).
The gap between Splits & LWP to whole grades is shrinking. Due to sharply increased kernel prices, roasters & supermarkets changed the mix and some even pack only R&S Splits now.
A remark to make is that we still have demand for Chinese New Year to come and if Thanksgiving and Christmas sales in US and Europe will be very good, some gaps might have to be filled what could cause a sharp price increase for spot stocks and immediate shipments.
At the convention concerns on the quality of the Vietnamese cashewnutkernels were voiced. The quality of the Vietnamese cashewnutkernels came down and some were even saying this season was the worst ever seen. This is obviously speaking general terms while various packers are still doing a very good job. The Vietnamese cashew industry (once again in general) has to take care that the ‘monopoly’ position they have at the moment (biggest supplier with best prices) will not turn against them because of quality issues. They need to remain focused on quality, -color/foreign material/shriveled/moisture- and not just rely on the color-sorters and X-ray machines installed.
The packers took good note of this. Quality guarantees a long term future!
So for the short term we do not foresee major changes when nothing dramatic happens. For 2018 season it is a bit too early as the Northern Hemisphere crops will be crucial for the direction of the market. All OK we expect prices to ease. When the moderator at the convention was asking where the people in the room see the 2018 price, prices varied between Usd 4,50-4,95 per lbs FOB for WW320.
A lot of people we spoke with were at Phu Quoc to get directions but it is not easy to figure out the price developments for the coming months.
Our recommendation remains to be covered until mid-April 2018 (as not much shipments will leave during February from Vietnam) and wait to cover further positions.
Incoterm: FCA Ridderkerk / Breda
Last few days we have been visiting some of the growing areas in South Africa and Kenya again. It is always good to be in the field and chat with growers and processors to get a bit of an idea. South Africa had, as we all know, a rather disappointing crop of about 41.430 mton NIS, which was slightly up from the dismal 2016 figure. The quality however was up with a fair portion of the crop over 40% SKR and under 2% USKR. The dry weather is definitely had a play a role in it, but it must also be said that farm practices are picking up and new cultivars (at the right places) give incredible results. The technical services of the factories are really helping growers to improve. Is it just a matter of time that 40% SKR is the new standard? Time will tell, but it is great to at least talk about these levels, because it
shows the vibe in the industry to push quality to the max. Outlook for 2018 is positive, but to really say something sensible it will be January/February. Now, it is the time of the November drop, so let’s see what stays on the tree after the holiday season.
Australia’s crop earlier on looked like it was able to give total supply a boost, but they were flat mainly due to Cyclone Debby that took away a portion of their crop. First signs for 2018 are also positive here. The AMS came with a “10 reasons why the time is ripe for macadamia innovation”. An interesting article and hopefully really something we can start working on. Till date innovation was not the first thing you would think off, but security of supply! We are really excited to get these two come together as we said already 9 years ago only security of supply can make people believe in macadamias.
Kenya had an incredible bad year. The crop was bad and the yields were pathetic. On top of that Chinese traders played a role and smaller factories started up pushing prices up. No, we can say that 2017 crop is not a crop to remember from Kenya. We hope that 2018 will be more positive.
From the demand point of view for 2017 crop the situation remains extremely tight. Prices are basically at theoretical levels as there is hardly anything available. Most markets are going to struggle into 2018 season and it is wise to cover at least your first needs out of 2018 crop. China has started to cover already new crop even though their domestic production is expected to finally pick up speed.
China just had Singles day (11-11), which is now the largest single shopping day in the world (ALIBABA sold over USD 25 Billion worth of products!!). Macadamias typically do very well.
If you have any needs till June 2018 and obviously also out of new crop we look forward to hearing from you to make you tailormade offers.
The current crop of Brazilnutkernels is nearly sold out and it is difficult to find offers for 2017 crop kernels. We have a re-seller offering some loads so in case of interest, please let us know soonest.
Prices have to come down for the new crop to generate interest again. As many supermarkets took Brazilnutkernels off the shelf, the industry has to realize that we have to come down significantly on prices to trigger their interest again. The collectors will start entering the jungle shortly and hopefully they also understand that they cannot use 2017 prices as their benchmark for collecting. The whole chain has to work hard to get the product back on the shelf and hopefully the 2017 season will not repeat itself as this is very bad in particular for the people in origin working in the Brazilnut industry (as they really suffered) but also not nice for the consumer to miss this lovely nut on the shelf.
Eastern Europe: demand from European buyers continued on a slow pace. Offers from decent factories, mainly Moldovan and Romanian based, remain stable. New processing factories are offering discounted prices to get business in the books. Demand for Light Quarters from Eastern Europe is significantly more than demand for Light
Halves. With the first loads of Californian Light Halves afloat, this trend is likely to continue, as California/Chile are preferred origins for this type of (snack/decoration) product. Quarters are mainly used as an ingredient, for which Eastern European walnuts are a suitable options. Covering further 2018 needs for quarters and pieces is advised.
USA: at least 90% of the Californian crop has been harvested. Recent reports mentioned a total crop between 615.000 and 630.000 ton. The first varieties didn’t encourage Californian shippers to book forward contracts. Both quality as quantity was reported to be down/average, depending on the growing region. The overall mood of Californian shippers changed after the first loads of Chandlers came in, which were of much better quality than anticipated. Despite this good news, prices remain firm. October shipments exceeded 100.000 MT, indicating decent
global demand. Countries to be watched are Turkey and China at the moment. Exports to both are significantly lower than expected so far.
Whether demand from these regions will pick up or remain silent is seen as an important driver for the rest of the season. Without the presence of both, Californian shippers might be forced to lower prices to move product.
Total shipment from California hit a new record for October, driven by the increased amount of exports and a stable domestic offset last month. Based on several reports from origin, a new record is expected to be set for November shipments as well. Due to the lower overall quality this season, the gap between supreme and lower grades likely to widen further. The percentage of rejects so far (2,35%) is roughly double the percentage of last year (1,20%). This is reflected in the European spot market as well, where sellers are somehow reluctant to offers Supreme varieties. Spot demand is currently encouraged by the favourable exchange rate, resulting in a strong spot market.
The market is uncertain at the moment about the direction to go. One day we see some more demand and prices are going up, the next day there is no demand and prices ease. Sellers/Processors are nervous as they have to buy RCN but at what price level? At what price they will be able to sell the kernels? Fact is that prices for Tanzanian and Indonesian RCN are increasing and thus kernel prices should go up as well.
Because of the ‘volatility’ a significant number of factories decided to close the doors until the new crop from Vietnam becomes available. As less will be processed, the 1st quarter of 2018 might see some price increase for kernels as availability might be down. The uncertainty also causes more quality ‘issues’ of product arriving at destination. We see more and more and that product delivered is at the border (or over) of the specifications making buyers unhappy. The Vietnamese industry has to realize that they should guarantee good quality to pave the road for a bright future and not destroy their own industry.
For most of the packers the season is over for quite some time already. There is hardly any product left in origin. The drought situation in the southern region of South Africa was much less severe than in the Northern region. The drought of last year still had an impact on the 2017 South African crop.
The Australian crop also had its difficulties and it will be interesting to see whether they have enough (answer is very likely no) for their needs in growing markets in Asia like China, Taiwan and South Korea. Kenya has had a very difficult year with also a decline in volume. Malawi was slightly better, but overall crops haven’t really grown much in the last three years for various reasons. Growth was seen in new origins including China, which product is basically invisible in the world trade. A bit of growth is therefore very welcome!
But for news about the new crop we really have to be a bit more patient as around this time of the year we are experiencing the so-called November drop. The blossoming and the nut-set where exceptionally good so we are holding thumbs of the hopefully limited impact of the November-drop.
Demand for new crop is currently picking up. There is uncertainty on what price will do and this is a concern for kernel buyers. Is the price going to stay at these high levels? China has started to show interest and booked some volume for new crop product already and they have confidence in the product, even at today’s price levels. As we expect premium prices for the first new crop, as pipe lines are empty, we would recommend to take some cover and wait for further news on the crop to take cover on the remaining part. We look forward to your inquiries for the coming (2018) season to offer and secure your supply from reputable suppliers!
Eastern Europe: Factories are working in full swing to get all the November product delivered within the agreed timeframes. The peak in production which is visible these weeks is likely to fall back to lower production volumes starting from December. Demand from Europe isn’t picking up as much as expected (because of the high prices).
The decent availability of raw material in combination with less demand from processors/customers, is bringing prices for raw material down. 1st class suppliers still continue to offer at the October price levels, while smaller packers are reflecting the lower raw material prices by quoting lower offers at the moment. It remains though to predict the market for 2018 positions. A price increase isn’t likely to be seen. A wait and see attitude is recommended.
The market of cashewnutkernels seems to stabilize a little bit with a slight firming undertone. Prices in origin though remain difficult to read as there is a wide spread of 6-8% between small packers and top packers. The quality of the RCN remains questionable so there are concerns on the quality of the kernels for shipment October-January 2018.
Shipments for Christmas sales are all afloat to destinations and not much demand for this period is expected. Import figures are up while consumer demand is a couple of % down so under usual circumstances, prices of kernels are not expected to change unless unforeseen circumstances occur (when for example quality is not good for afloat product, there will be additional demand for spot available kernels and a premium might be asked).
The next crop will be Tanzania and Mozambique and those seems to be good, producing a crop of 250-300.000 mton available for export (as Mozambique is processing approx. 30-40.000 mton themselves).
The relief should come from Vietnam/India/West Africa crop, becoming available from March/April onwards.
The situation for macadamias remains unchanged. The market is extremely tight with hardly any offers available. Knowing that we still have to wait till July before the situation really changes we are keeping our fingers crossed. There might be some relief from Malawi and Kenya, but whether this will enough to bring prices down remains to be seen. Especially for snacking these origins are interesting, but for the ingredient part of the business who are using considerable volumes of the smaller styles it will become tight. We therefore continue to recommend covering your needs for the current crop if you still can. For new crop it is a different story. We are currently trying to find our feet, but offering at the current price levels isn’t really going to stimulate demand. It will be interesting where demand and supply will meet each other knowing that crops under normal conditions will grow. Will we see a similar year like in 2016 where buyers stayed out of the market, but forgot about the impact of China and at the end missed considerable volume? Will history repeat itself?
Eastern Europe: Suppliers seem to be in a confident position for the nearby period, a great share of the export capacity has been booked up till the beginning of December. The late arrival of raw material, as mentioned in our last report, is keeping production deadlines tight which minimizes the options for suppliers to publish new offers for prompt loading coming weeks. Coverage of still pending Christmas needs is highly recommend.
The image of the overall 2017 crop seems to exceed the 2016 crop both quantity as quality wise. We’ve seen decent raw material during our trip to Eastern Europe last week, which once more confirms the indications as spread during Anuga last week. The Eastern European market is taking advantage of the high-priced offers coming from California. Especially the collectors / traders of raw material are revering to these offers (rumours in the local market), which is pushing the prices for raw material upwards. Based on the increased price for raw material, the so far stable demand and the relatively low availability from the US prices are expected to stay firm on both the short as long term this season.
USA: The active offers from California are still limited at the moment. Most suppliers are willing to discuss the options for well know customers, while they stay reluctant on offering any other forward positions. The harvest of product is finished for most varieties. The total quantity of Hartley product is quoted to be roughly 20% less than last year, resulting in firm prices for the inshell market. The SERR and Tulare varieties are harmed this season as well, resulting in less yield and higher processing cost for packers. Also, the quantity of Howard product seems to be lower than last year, while the quality of the harvested product itself is reported as light coloured. The most important variety, Chandler, is still being harvested. The reports so far are mixed, most of them tend to be positive in comparison to the expectations we’ve heard during September. All-in-all is above information resulting in a difficult market, in which both the Chandler as non-chandler varieties are firmly priced and no relieve is expected on the short term. Indications for the long term will be clearer after the harvest is completed finished, a relief on the long term is so far not likely to be seen.
The USDA has announced their estimate of the 2017 USA pecan crop at 277,400,000 pounds on an in shell basis. This is slightly larger than the 2016 crop of 268,770,000 pounds. We were hoping for a larger crop this year as early indications show great potential in Georgia, Texas and New Mexico. Although Harvey had little impact on the Texas crop, Irma proved to be very damaging to the crop in Georgia. An estimated 25 to 30 million pounds of pecans were lost to the storm. I am still optimistic that Georgia may still exceed the USDA estimate for the state, but we will not know this for several months. In the meantime, the market will need to work with the numbers provided.
There are persistent rumors that Mexico’s crop will be 20% smaller than last season. Although we are always a bit skeptical of their crop reports, we have no hard data to refute these claims. We were hoping to see some price relief on pecans for 2018 contracts. Hurricanes, Mexico crop concerns and strong demand from China on new crop in shell has cast some doubt on realizing a substantial price decline from this season’s levels. We will know a lot more over the next 6 weeks. Buyers should cover their 2017 holiday’s needs and consider waiting to address their later requirements until more facts are known about the total supply for 2018.
Source: Navarro Pecan Company
The prices for WW320 eases in Vietnam with C-ranked packers offering around the 4.65 USD/lb on FOB basis. The better packers in Vietnam are offering approx. 0.20 USD/lb higher. However, the prices for kernels from India seem to be stable with WW320 still being traded above the 5.00 USD/lb. Raw Cashew Nuts are still not offered at lower prices. Raw Cashew Nuts offers from Tanzania and Indonesia are around the 2.350 USD/MTon CNF for KOR 50+. Lower quality material from West-Africa with a quality between the 40 and 45 is offered in a wide price range from 1.700 to 2.000 USD/MTon CNF. Processors in Vietnam seem not to be interested in these RCN as these are giving to much off grades, where the gap between off and premium grades is big.
Question mark is where this will lead us during the coming time. Seeing the actual RCN and kernel prices, it would be possible for Indian processors to buy the actual high-priced material from Tanzania and Indonesia. Although Vietnamese processors will not be able to secure RCN at actual prices, which will make them depend on their actual RCN stock with lower quality RCN. The question is how stringent the kernel buyers will be the coming months, as the lack of sufficient good quality kernels from Vietnam may indeed cause a gap between high quality and regular/mixed quality kernels to widen. And additionally, will in the coming months more offers for 2nd and 3rd grade product come to the market, and what shall be the effect of that?
Typically, around this time of the year factories close and the last bits and pieces are offered to the market, but it looks like the uncommitted volumes are close to zero and if already available gone instantly. Most factories have done lesser volume than anticipated and as such are trying their utmost to take care of their commitments.
For new crop it is still early days as a lot of things can happen, but we understand some offers are made. It will be interesting where this market will go as there is quite some resistance from kernel buyers. The NIS market at the moment is still going strong.
But as said there is still a lot that can happen. Everybody is hoping for a better crop, but last month there was a storm going through the southern growing areas in South Africa and this week Australia was hit by heavy rains and wind. Damage so far is unknown, but over the past years we have learnt our lesson not to be overly excited at this time of the year on next year’s crop. Anyhow, we keep our fingers crossed for a healthy growth as the market is really in need of more volume and hopefully some more reasonable prices. Offers are available upon request.
Eastern Europe: First trucks from Eastern Europe were expected to depart during the beginning of October. Due to the relatively late arrival of raw material this season a lot of suppliers are in a rush to get their product dried and processed within this timeframe. It remains to be seen how many delays will occur coming two weeks. Although a great share of buyers has covered their nearby needs, there is still a lot of demand, keeping the market firm. Prices are not expected to come down on the nearby period. Anuga is seen as an important moment to determine to continuation of the market, some suppliers even withdrawn from the market till the end of Anuga.
USA: While the market carefully anticipated on (partly) damaged crop due to the warm days in the pre-harvesting season, is the so far harvested product of good quality. Harvesting started roughly two weeks ago with the Howard and Tulare varieties, which turned out to be of a fine, non-harmed, colour. Whether the same can be said about the Chandler crop, which is the most popular export variety, will become clear after the first loads are harvested this week. The positive news so far brought a hold to the quick increase of prices, the quality of the first chandler loads will determine if the market will stabilize around these levels or boost the increasing trend that we’ve seen last couple weeks.
The Californian almond market is becoming more inflexible day by day. A large share of the unprocessed product is affected by insect damage and includes a relatively high percentage of doubles. Although this news doesn’t seem to be favourable for handlers on first sight, is the current situation quoted as being comfortable for Californian handlers. Since their factories are running in full swing for the nearby commitments are they confident enough to watch the market rise at the moment. Prices are expected to remain firm, a price decrease is not likely to be seen under these conditions, especially on the Nonpareil and Carmel varieties whom seem to be under pressure the most.
Most of the product from West Africa arrived now in Vietnam and stocks in the port should be sufficient for the coming months. The remark to make is that quality of a serious volume (reports are >100.000 Mton RCN) seems to be bad and processors have little interest to buy this RCN as the processing costs will be high, but first grade kernel recovery is also very low.
Top packers are having stock themselves of good quality RCN but the question mark is how many months’ worth of processing this stock covers. Needless to say that with the very high prices for RCN (and kernels), how much can be financed and hence how much RCN is in stock, remains uncertain…..
Will it be sufficient until new crop from East Africa will arrive, i.e. February/March.
We doubt it and remain concerned on the general cashew market. We expect the gap to widen between top packers (who are having their own stock of good RCN and hence can supply good quality kernels within international specifications) and small(er) packers sometimes face two issues : a- they battle to buy high priced RCN for financial reasons and when having processed the purchased RCN, need to sell the kernels swiftly to turn the money around, and b- they battle to pack first grade kernels within the international standards as the raw material was not sufficiently high quality.
The question is how stringent the buyers will be the coming months, as the lack of sufficient good quality kernels may indeed cause the gap between high quality and regular/mixed quality kernels to widen.
And additionally, will in the coming months more offers for 2nd and 3rd grade product come to the market, and what shall be the effect of that?
Because of these observations we would recommend to be covered until end of the first quarter of 2018 from first class shippers, even though one may pick up some cheaper containers from smaller packers in the coming weeks, as sales may take place under pressure.
Most of the Macadamia crops are in and committed while there still is a lot of demand for in shell from China and kernels globally. As most of the crops are committed this will not be an easy one as we also have to realise that it will take until June/July 2018 before the next main crops will become available to the market.
Fortunately crops worldwide are growing and we hope that the coming years this will give some relief and create a stability in the marketable quantity and stabilize prices as the current situation is difficult for a major part of the value chain. During meetings with farmers the past couple of weeks, even they voiced some concern about the prices, and the sentiment picked up was that there is certainly support to see somewhat lower prices for a more sustainable long term growth in consumption.
There are limited offers around, your inquiries are welcome and as always we will do our utmost to service you!
The market for Turkish hazelnutkernels is stable and sellers just returning from their EID holidays. Fortunately weather has improved and hopefully supply will start again in good quantities soon. Still the role andn influence of government to be seen. Some growers prefer to sell immediately and get the cash instead of wait for a long time to get their money.
The markets in Georgia and Azerbeidjan started as well but is different than Turkey as usually their yields are lower and therefore processing slower. Prices are available on request.
USA: it is very hot in California at the moment and this might have an impact on the early varieties and if the heat continues also on the later varieties. Harvest is expected to start middle of September with first new crop shipments during October. The NASS forecasted the 2017 California Walnut production at 650.000 tons, down 5 percent from 2016’s record production of 686.000 tons.
Eastern Europe: first walnuts (from Uzbekistan) will be processed shortly and ready for shipment during September. Other origins are expected to start processing during October with first shipments during October with the advantage that their transit time to Europe will be only a couple of days. Most processors are waiting how the market reacts on the NASS figures from California before offering prices. Some of the factories we work with already are able to provide some pricing, and we look forward to your specific inquiries.
Due to the hurricane Harvey with a lot of rains and flooding in Texas and Louisiana, processors became concerned about the total availability of pecans and prices for new crop increased. Beside the weather conditions, also the increasing demand (domestically for pieces for industries and for export on inshell pecans to China) is making sellers nervous and reluctant to offer forward. Prices for new crop (January shipment onwards) increased a couple of percent.
The market of cashewnutkernels remains in a squeeze. On the one hand, good supply of RCN (although of lower quality) and on the other hand limited demand pushing processors to offer discounted prices to get interest and sales in their books.
Over the last couple of days this changed a little bit as more and more of the remaining ‘reasonable’ quality is sold and buyers returning from their summer breaks showing some interest. Prices went up a couple of cents. It will depend on demand where prices will move to in the coming weeks. When good demand shows up for 2017 and early 2018 prices will go up further. When all buyers around the globe are covered and can wait until January we might see stability in the market.
To avoid ‘surprises’, we would recommend being covered until end of the year/February 2018 as new crop from West Africa will show up than.
There is no news in the field of macadamias. Demand remains strong and offers very hard to get and if any prices are extremely high. Our recommendation remains the same and that is to be covered till new crop and possibly even first new crop.
There is fortunately also some good news and that is that the quality is exceptional this year.
The walnut season is around the corner and will start shortly. First new crop offers are around and processing units are about to start. We can offer new crop from September shipment for Uzbekistan walnutkernels processed in Moldova. The main quantities from Eastern Europe though (Ukraine and Moldova) will become available during October. The crop in Eastern Europe looks promising while there are some concerns on the US crop affected by the adverse weather conditions over the past couple of months.
Consumers are getting more and more interest for walnutkernels and we are glad that world supply is growing in the various growing origins.
From India we received the following indications:
Offers from Eastern Europe and US are expected shortly and we would appreciate to get your inquiries to prepare you the best customized offers.
For those who interested, we have a small quantity (approx. 3 mton) Chinese Walnutkernels LH80%, 2016 crop, packed in 12,5 kg cartons at Euro 8,00 per kg basis FCA Holland.
There is limited demand in the market still. Factories in origin are closed and the coming 6-8 months product has to be delivered out of stock in Europe and US. This stock is limited and some buyers are forced to buy as they declare brazilnutkernels in their mixes.
Collectors will enter the jungle again in December/January. More on pricing and crops will be known during November & December.
The crop in Mexico is not very good and therefore offers for new crop from US and Mexico are firming. Also, the concern that the Chinese will jump into the market during October and November to buy inshell (Inshell Pecans are 2nd after Macadamias inshell which are not available anymore) will push prices up in the field most probably. It is our recommendation to cover first new crop shipments until February/March 2018 and hopefully dust will settle than as Chinese are losing interest as they need the product for Chinese New Year, and prices to ease a bit.
The July shipments were again new records and confirmation to processors and exporters the high interest worldwide for Almonds. This confirmation caused (again) an increase of price and reduce the carry over. The last crop forecast was at 2.25 billion pounds.
The Turkish government announced their buying price at TL 10 for Levant and TL 10,5 per kg for Giresun. This was quite a surprise as everybody was expecting them to be back in the market at a later stage and see what would happen in the beginning of the crop. Hopefully this buying price of government will create some stability in the market and promote hazelnut consumption worldwide. Harvest is in full swing as producers would appreciate to get as much crop in as possible before the EID holidays starts.
The market of cashewnutkernels is in a wait-and-see mode. Sellers are reluctant to sell too far forward while buyers do not want to buy now and hope for lower prices. The facts remain as written in our previous reports that there are good quantities of unsold RCN in Vietnam but quality is doubtful and prices high. The quality of the RCN arrivals from especially IVC in Vietnam is reported to be low. This could lead to the same situation as last year, wherein there was a shortage of the premium grades WW240 and WW320 during Q4.
Current kernel prices are not equivalent to RCN prices and somebody has to take the loss or……. wait for kernel prices to pick up again. Buyers still have open positions for the last quarter and those will be booked in the coming 4-6 weeks.
As the prices can turn easily and go back up again we would recommend covering until February/March 2018, also as prices do not move so much anymore and we might be close to bottom.
As good news from origin is not to be expected this season the market is moving in unchartered waters. Prices are at all-time highs if you can even find something and it is really a take or leave it. This situation is going to hold all the way up till at least May/June 2018 when first product from Malawi and Kenya is going to hit the market or Hawaii should bring relief and come with an exceptional crop, which is very unlikely.
We can only repeat our earlier recommendation and that is to try to cover upto July 2018 and perhaps first shipments from new crop.
Due to some question marks on the new crop from Mexico, exporters are a bit reluctant to offer new crop now. Prices for new crop slightly firmer and especially first new crop is offered at premium prices. Our recommendation is to be covered for December until February 2-18 shipments and await further developments.
South African crop is nearly sold. We might have an opportunity for some organic pecan pieces. Please advise if of interest.
Yesterday the shipment report came out again. The figures were according expectation strong resulting in an excellent year again. The domestic market remains very strong and 14% up compared to 15/16 season and the export markets also show strong YTD figures being 17% up resulting in total shipments to be up 16% up totaling 2.1 billion pounds. Prices consequently are firming a bit. It looks like July again was the moment to buy as it has been for a few years in a row. There is no reason for the market to move dramatically, but downward potential is very limited knowing that total availability is expected to be only 4% up.
The cashewnutmarket is not very active at the moment. Is this quietness before the storm or will existing RCN volume in the ports of (mainly) Vietnam be sufficient to fill demand? The facts are as follows:
All West African (and India and Vietnam) crops are harvested and in the market.
Nearly all RCN afloat from West Africa are ready for shipment, on route to Asia or already in the port of destination. We get reports from Vietnam that the quality of the RCN stock in the port of Vietnam is not good and will result in higher processing costs. A significant part of the RCN stock is in hands of Chinese traders who are/were speculating on the RCN prices but lacking the knowledge on quality controls on RCN. Besides the quality, finance remains an issue, especially for smaller processors in Vietnam who do not have the finance to buy RCN prior to selling some kernels first. This causes some slightly discounted kernel containers in the market every now and again.
Larger processors carry limited stocks, most of them for production till maximum end September. All processors expect higher prices from that time frame.
The expectation is that smaller (but also some larger) factories will either close doors or keep buying small parcels for processing. Since the quality of RCN arrivals is lower, RCN prices may expect to decrease slightly to reflect the lower quality.
Import volumes of RCN into Vietnam are up by 69% till date.
Export volumes from Vietnam for kernels for this year (Jan-June) are down by 4%.
The higher imported volume RCN could be seen as a strong sign/confirmation for larger volume available in Vietnam, and hence a strong potential for lower prices in the coming months.
But it may partly be explained by lower RCN crops in Vietnam and Cambodia combined, and the kernel output is estimated to be lower from a lot of imported RCN and also locally grown RCN were of lower general quality.
Also, the pattern of imports is different from previous seasons due to different shipment months from both East and West Africa.
Only at the end of the import season, the final totals can give more clarity on the total volume.
Vinacas reported an anticipated reduction on export volume of 5-7% estimated.
Is slow for the time being. Lot of buyers in US and Europe are enjoying their summer break and will be back middle/2nd half August. Also, the Chinese are expected to enter the market the same time. It will depend on this demand -combined to the supply of course- what the market will do. Will buyers all at once jump into this market then prices are expected to increase.
When demand will remain limited, prices might come down a bit more although somebody (the trader or the processor) has to take a loss as prices for RCN are not in line with the current kernel prices already!
Our recommendation remains to buy ‘specials’ when they show up and have at least 50-75% cover till April 2018.
Last week the Australian Macadamia Society (AMS) announced that the impact of cyclone Debbie earlier this year is most likely to be more significant. They stated the following: “Significant weather events have impacted the 2017 Australian macadamia crop harvest, and it is now anticipated that the crop may be some 5-10% lower than the industry forecast of 48,500 tonnes (@ 3.5% MC). The Australian Macadamia Society will issue an updated forecast in early August, once crop intake figures for July are finalised.” This figure is even more disappointing taking the increased estimate of March in mind, where a crop of 50.500 mton was announced keeping world production at stable volumes.
The crop in South Africa is currently slowing down and unfortunately there is not a lot of positive news to report. The crop remains short. The only positive note that can be made is the increasing volumes from the new growing area KwaZulu Natal. The quality of the crop is exceptional good here with even some deliveries over 50% sound kernel and hardly any unsounds. This is very welcome news as volumes from South Africa have been depressed for quite some time now. Let’s hope the 2018 crop will be something different and we hear from the field that the first signs at least our promising. Let’s keep our fingers crossed that the development continues in order to start some product development and hopefully also some more reasonable prices for the years to come.
Kenya was hoping for some relief out of the small crop that they are having now, but the quality is really bad (10% SKR!) and the percentage of immatures very high. Even though prices for inshells seem to be reasonable with this quality it is extremely difficult to make a profit. It is therefore wise to work with the right partners in Kenya at the moment as this might cause some problems in terms of volumes and quality.
Demand for both kernel and NIS is still strong. It will be a really long run till new crop this time. NIS prices are extremely firm, but there is some resistance to push prices even higher. Kernel prices are still soaring and at all-time high levels. Even though it is summer time and a lot of buyers away there is still continuous demand. Our recommendation remains unchanged to make sure you are covered and hope 2018 will be better.
Prices for Brazilnutkernels are going up again a bit after we saw some softening, mainly for spot material. Main reason for the price increase is demand again picking up and processors realize that the yielding of the last lots in origin is bad and not giving the kernels as anticipated. So volume will be even less than last expectations.
It is our strong recommendation to cover your needs until new crop.
Prices for USA Pecannutkernels are stable. Not much quantity of halves to sell and factories committed. New crop offers are available and if of interest to you, please let us know so we can make you a customized offer.
South Africa is more or less sold out on inshell. This is all going to China.
The trend of increasing prices, which started earlier this month after the publications of a 2.25 million pounds crop, hasn’t settled yet. The actual figures from California in combination with the multiple advices to start covering (forward) positions have boosted the European purchases. As no relief is expected on the nearby period, our advice would be in line with the general trend to cover at least the nearby positions and follow the indications for the new crop closely.
The weather forecasts for the next 10 days keep on pushing the positive expectations for the new crop. Some refreshing rains are expected for the weekend, followed by sunny days to boost the development and drying of the kernels at this stage. The crop estimate from the Turkish Government hasn’t been published yet, in the meantime rumors of a higher than expected figure are spreading through the market. Without a clear buying strategy of the TMO, it remains to be seen at which levels the market for new crop will open. At this stage it is not advised to take forward action already, following the market closely is seen as the ‘most decent’ approach.
We didn’t see a lot of activity on the European market during June. While buyers tend to wait for offers from California at the moment, the last open positions from Chilean crop are being offered at discounted prices. Most of the available product seems to be in the hands of processors from other regions rather than origin, such as handlers from Turkey whom processed inshell material themselves. With the expected growth of the Chilean crop, planned to be doubled in the next five years, these routes (including hand-cracked in for instance Turkey) are likely to expand even further.
Although the Californian crop is developing well most suppliers are still careful towards forward offers. With roughly two months to go before harvest, there could still happen a lot to the new crop. At the moment, the number of warm days is quoted as a potential harm to the crop, as the risk of sunburned product is increasing. Time will tell whether these conditions will be of any actual harm to the crop, so far the US market is expected to open at frim levels and therefor something to be watched.
Prices of cashewnutkernels are moving in a small price range, depending on demand. When demand is gone, processors (especially the small packers) are discounting their prices to move product and get cash to buy new RCN. When we see (limited) demand, prices immediately react and increase a couple of cents. The bigger/first class packers are still at price levels around Usd 5,10-5,20 per lbs basis FOB for shipment during August/September.
Stocks of RCN in Vietnam are sufficient for the time being but we have to keep in mind that the stock in Vietnam and afloat stocks from WA, needs to fill the gap until the new crop of East Africa arriving Indian & Vietnam during end January/February 2018, i.2e. another 6 months. Stocks in WA are more or less sold and the quality of the remaining stock is deteriorating.
The situation remains unchanged. There is a lot of demand, but no offers and it is unlikely this situation will change. Therefore, we keep our recommendation to cover your needs till new crop if possible.
Prices are a bit under pressure as demand faded away. Stock in Europe is OK for the moment while stock in origin is very very limited and new crop only expected to ship 7-8 months. Sellers/processors from origin want to sell their remaining product, close their factories and books and prepare for the new season. Prices in origin around Usd 8 per lbs basis FOB while offers in Europe are between Usd 7,75-8,00 per lbs at the moment. Our recommendation is to buy hand to mouth for the moment.
Not a lot of movement is seen on the Turkish market. Availability of good quality kernels is very limited. The number of active processors is coming down. The quiet market in combination with TMO whom stopped making appointments with farmers, is resulting in a slow market. The total volume of the 2017 crop remains questionable, as do the opening prices of the market. The recent weather conditions are seen as favorable for the crop development, especially the heavy rains which refreshed the orchards and had a positive impact on the cleaning of the fungus disease.
Chile, the only actively offering origin at the moment, keeps on discounting prices as demand fades away. Especially for halves demand is very slow. This is caused by the high shipment figures in the beginning of the season where most buyers covered their requirements. While it is too early to predict the size of the crop from both Europe and California, buyers are focused on those origins for additional needs.
Cashewmarket is a bit dull at the moment.
Supply: the supply from West Africa is afloat and arriving. Good quantities are available in India and Vietnam for processing but prices stay firm. The availability in the producing origins is drying up and prices are increasing while quality is coming down.
Demand: is currently very slow. Most buyers are waiting and watching the market closely. Buyers are not nervous but aware of the ‘risk’ of quick turning around soonest demand will pick up. For the 3rd and 4th quarter still some coverage needs to be done.
Best advice is to benefit from good deals on the day to cover either nearby or Q3 & Q4 positions, and meanwhile stay focused on the general market as sentiment may swing the prices very sudden and very sharply due to several reasons (processors needing money -price down- or demand for RCN increases -prices up-).
The signs of a difficult macadamia year in terms of availability is becoming clearer every day. There are few reasons for this situation. Supply is simply not growing fast enough for the demand (read NIS demand). The demand for NIS remains very strong and prices extremely high. Shipments are arriving in China now and there is no indication for any disruption there. Prices are interestingly enough accepted by the buyers, which are about 25% higher than in 2016. A concern at the moment is the low quality that is been supplied to the end-consumer. Packers seem to accept lower quality and blend it in with good quality. This is mainly because the companies are trying to build a brand and do need to put some volume behind it. South Africa is basically the balancing factor as their quality is seen as the top-quality product in China. The quality from South Africa this season is exceptional with very low insect damage. Australia seem to be struggling with their quality this year, which might be a result of the wet weather conditions, but this is not confirmed. Other origins are also used to make the volume like Zimbabwe, Malawi and Guatemala. There is also very bad quality from Kenya that is smuggled out of the country. This product ultimately finds its way into the market resulting in poor product on the shelves. So far there is no backlash so it might be that we get away with it.
The impact of this strong demand from China is obvious. More packers around the globe have no other choice than to go and do a portion of NIS to be competitive buying the NIS from the farmers. Especially the product that fits the quality standards of the buyers, which is somewhere between 30-32% SKR. Consequently, prices for kernel are also increasing by the day meaning that higher SKR product is still better off as kernel. The quantity of this real high SKR is limited and mainly coming from newer plantations in South Africa and Australia.
The above described reality seems to find its way to the kernel customers now as well. Quite a few are obviously covered, but there is also still of product that needs to be covered as people were hoping for the market to ease. Our expectation is that this will not happen till new crop and therefore recommend covering your needs.
USA: the current availability of pecannutkernels (especially Jr MM Halves) is drying up. Most factories are committed for most of their volume until September/October and hope that new crop will come in then. New crop so far looks good. Carry over might be less than previous seasons while the total US crop is expected to be around the same levels. First indications on Mexico are that their crop will be down by 15-20%
South Africa: as noticed in previous reports, approx. 85-90% of their crop (10-15.000 mton in total) is exported as inshell to China. Only the smaller sizes which do not fit for the Chinese market will be cracked. Most of those kernels will be consumed locally and just a small portion will be exported to markets as Russia. Crop is coming in now.
The quality concerns about the remaining Turkish hazelnut stocks seems to be rising even further. TMO has rejected roughly 30% of the applications from stockholders to sell their crops last week. Updates like these keep on feeding the uncertainty in the market, pushing potential buyers into even more uncertain positions. The uncertain character of the market also moved the eyes of some buyers to the fresh 2017 crop, pushing the (hard to find) 2017 offers in an upwards spiral. Main reason for exporters to stay away from big forward positions so far is caused by the continuation of the fungus disease. Some exporters might be persuaded to reconsider these forward positions during the coming weeks, based on the favourable weather conditions as predicted for the nearby period. In opposite to the rainy June is July forecasted to have a lot of sunny days, which will stop the development of the fungus disease. Expectations at source are differing between 600K and 700K MT in total, keeping the market from settling down.
The Almond market remained quite dull during the last two weeks. The majority of contracts is based on the nearby period, long positions don’t seem to be taken into actual consideration yet. The Objective crop estimate made by the USDA, which will be released in a week from now, could be the game changer that California is waiting for. While buyers are crossing their fingers for a figure above the subjective estimate as released earlier (USDA 2.2 >-< industry experts 2.3 million lbs.) rumours are coming from sellers whom claim that the bottom line of the market is already reached. As mentioned in our last report is a further price decrease not likely, the reaction of buyers to the objective crop estimate will determine the continuation of the market.
After a long period in which Chile enjoyed the status of ‘only origin of interest’ seems this trend to be on its return. The rapid pace at which Chilean exporters have been selling during the past couple months started to decrease, resulting in first offers below the average market and eventually turning into a downwards spiral. In the meantime, the first European buyers showed interest for the forward positions on new crop from EU (including Ukrainian) positions. After some negative rumours of frost during the beginning of the crop are most of the recent updates of a positive kind. So far, no actual business seems to be taking place, but it is definitely something to be watched.
What to report on the market of cashewnutkernels? Prices of kernels came down a couple of % over the past weeks and currently are stable around Usd 5 per lbs (for WW320) basis FOB. Although there is no demand and buyers staying out of the market, prices of kernels did not come down further.
Very tightly balanced supply and demand will continue to show similar patterns for the coming months in our expectation. The reason for the recent softening is due to limited buyer demand combined with some processors needing cash for payments of new RCN arriving in Vietnam.
Any real demand may spark prices again and cause the kernel price to go back to ‘break-even levels’ on RCN procured from West Africa.
On the other hand, with limited demand and more RCN arriving, one may see a slight softer undertone for some weeks.
Fact is that prices for RCN are stable or again slightly firmer for good quality, causing concern for the kernel prices in the coming months (logically processors buying RCN at today’s prices shall wish to sell at least at parity on kernels). Uncertain is the demand in India, which may be why prices for RCN from Guinea Bissau are being pushed up, where WW320 parity would come close to historic highs of a few weeks ago.
On most other origins the quality is becoming less as we are coming towards the end of the West African cashew season in these countries.
Keeping the above in mind, our recommendation is to cover when special opportunities are shown as prices might increase again when processors become comfortable with their position (hence need to sell is out of the market) and when demand will be back in the market during August/September when big shipments are expected to fill in the end of the year season around Thanksgiving and Christmas.
Prices on macadamia kernels have risen sharply over the last weeks. Customers became aware that the volumes are very limited and as such started to search for product. Earlier on it was expected that the growth would help supply, but the slight growth in production compared to last year is basically completely absorbed by China. Furthermore, there were no stocks left and new shipments were/are desperately needed to keep the market supplied.
The biggest threat, but currently also the greatest opportunity, is China and their incredible demand for NIS. Prices compared to 2016 are a lot higher yet there is still a lot of demand. Kernel prices cannot keep up at this pace, but are substantially firmer than in the beginning of the season.
A remark needs to be made that the Chinese market is focussing merely on Unsound Kernel and Size. As long as the product is around 32% sound kernel this is enough. This means only a certain portion of the crop fits this specification. In the new growing areas in Australia and South Africa in particular we see that meat yields and favourable style spreads (Wholes and Halves) are making the choice for NIS a bit more complicated.
During our strategical meetings with our South African partner it became crystal clear that the focus remains with kernel. Many other players seem to shift more to NIS and following the route many other nuts have taken before macadamias and we all know the effects. It would really a pity if macadamias would take the same path as prices are historically at all-time highs and a terrific opportunity to really start building strategic strong markets and have a healthy base for the years to come where product development will be needed to market the growing crop.
For our customers, we can only say that you make sure that you are fully covered till June 2018 and perhaps even beyond. There is very limited downward potential looking at current demand and we don’t foresee any carry-over into 2019 either.
Prices on Brazilnutkernels eased a little bit, not because of crop being better but just because some shippers are closing for the season and want to get their debts paid and need money offering a slightly discounted price to move the product. We usually (in a normal season) see this happening during September/October but now it is already in June. 2 of the biggest processors closed their doors already as they do not have any stock left for processing. We expect more than half the processor to finish for the season by the end of this month.
As voiced in our previous report as well, this is having an impact on their season financially but most of them seems to be strong enough to survive and be back next season. It is worse for the workers who will not have an income for the coming 5-6 months. They have asked for help of Bolivian government but this may not kick in before August time and not sure in what form and/ or sufficient it will be.
With regards to the new season it is hard to say what will happen. Because of today’s high prices, collectors and middlemen will be expecting high prices like this year, not understanding that today’s high prices had a big impact on demand. Buyers who are forced to buy to honor their current contracts, will not come back in the market when prices are this high and demand will fade away. Hopefully during August/September we will get the first indications on the new crop (quantity) and providing it is a normal crop we expect the prices to come down to a normal level based on 5 years average by next year. We will keep you posted.
The low demand on nearby positions hasn’t improved during the past two weeks. The continued weak demand resulted in a situation in which buying prices of TMO exceed the current price levels of today’s market. While the nearby demand doesn’t show signs of growth the concerns about the fungus disease are slowly but surely rising day by day. The enduring rains keep on feeding the uncertainty on the development of the new crop. The weather forecast as announced so far are not bringing any relief either, as the number of rainy days is expected to be twice as much as the days without showers till the end of June. Considering nearby positions could be a logical reaction to today’s market, we advise to keep in mind that these stocks are not offered to / accepted by TMO for a reason.
While the almond market appeared to be in a quiet mood the past month, are the May shipment figures showing more activity than expected. Next to the amount of shipped product is the number of commitments picking up, an increase of 22.17% for export destinations is published by the Californian Almond board. The crop development continues a stable route, supporting the indications of a slighter bigger crop estimate of the USDA NASS, which will be published during the beginning of July. Next to the crop estimate is the starting date of the harvest a hot issue. Based on the indications we received so far, the harvest is expected to start approx. two weeks later than the past couple years, which is supported by the increased number of commitments at the same time as well. The nearby market is not expected to fluctuate heavenly, a price increase is seen as more logical than further decrease at this stage.
Cashewnutkernel price came down a little bit due to lack of demand but stabilized thereafter. After INC (where a lot of people were predicting kernel prices to increase), the prices became a bit easier as demand faded away. We see 2 main reasons for the prices to come down:
What is -likely- to happen next?
Prices of RCN remain (very) high and even increased due to higher RCN prices in Guinea Bissau, linked to the forecast of rain in Guinea Bissau (which would be earlier than normal), one is left to wonder when kernel prices bounce back to higher levels again. Meanwhile lack of demand may allow prices to drop a bit further on the short term, but lack of physical stock keeps the market extremely tightly balanced.
Whereas a lot of buyers indicate that the current kernel prices are not sustainable at consumer level, it also seems that the entire price increase vs say 12 months ago, has been passed on to the consumer. That being the case, the logic of supply and demand is flawed, and as consumers may not ‘hurt’ from higher prices, demand may continue to grow even. So the current price relaxation seems to be a short term move, as the fundamentals under the market are quite unchanged. Buyers are uncertain to take position or not, since market can easily go up strongly, but maybe remains flat or a couple of cents lower. This phenomenon will likely cause the SPOT markets to remain very tight, empty and at a premium to FOB replacements. It can be expected that prices will tend to remain firm although discounted offers will pop up every now and again due to processors being forced to offer discounted prices to move SPOT stocks at that time. The coming months are usually quieter in Europe and the USA due to summer holidays (buyers being absent and hence less buying) and less packing for consumption going on.
The demand, and hence the shipments should pick up end July/early August to get product in, in time for Thanksgiving and Christmas sales which usually are the peak demand moments of the year.
Probably best would be to take cover when ‘special opportunities’ appear and be covered until end of the year for approx. 70-80% of your requirements.
The volumes in the macadamia market are very limited. Spot material is hard to be found and this not expected to change as all product that arrives is sold instantly. Over the last week demand from the US has also picked up. All in all it remains a very difficult market and is unlikely to change. The volumes going for NIS are growing resulting in a tight situation on kernel. Therefore, it remains recommendable to cover your needs till new crop. We have some limited spot product available and then in particular ingredient styles if of interest.
USA: Prices of pecannutkernels remain stable but especially the uncommitted inventory of Jr MM Halves is becoming limited. We would recommend to cover for this size until October 2017 as we have a better indication and first arrivals of the new crop than.
South Africa: offers for inshell are available. Kernel offers are not available yet as those depend on the inshell sales. In case you are interested in offers for inshell pecans, please let us know so we can make you a customized offer.
The situation on the Brazilnutmarket remains very difficult and a significant number of buyers took the product out of their mixes or even from the shelf as consumers will lose interest. When the packer/industry has a choice they will do this but a lot of industries (cereal bars, muesli etc.) do not have a choice as brazilnutkernels are an important ingredient for their product (as was reported in a Dutch newspaper yesterday as well) and they have to take the burden.
A crop estimate on the Turkish hazelnutcrop of 670.000 MT inshell has been announced during the INC convention in Chennai. Other reputable sources already revised this figure and added it up to 700.000 MT based on the favourable weather conditions of the past two weeks.
A note to make is the impact of the fungus disease. This is monitored closely and so far no extreme impacts have been seen to change this crop estimate.
The domestic market remains stable since the beginning of May. Last week a first slight price relief has been spotted. Demand slowed down a bit as most of the coverage for Ramadan requirements has been made.
On the other hand we saw the purchases of TMO increase significantly during the last two weeks. The purchasing criteria seems to be less critical than before, which is expected to attract some stockholding farmers to sell additional volume.
Whether the market remains quiet up to the new crop remains to be seen but it might be worth to wait and watch the market closely before covering forward positions.
The general trend of short supply on a global scale became once again clear during the INC convention in Chennai last week. The outcome of the main discussions in the field of walnuts could be summarized as a lack of supply of the Light and Extra light grades, combined with the focus on the Indian market as a fast growing export market. The Chilean walnut commission agreed on these developments. They presented Asia as their prioritised market, focussing on a steady demand for their increasing crop, which is expected to double in the next five years.
The Chilean market continues to increase prices, especially on hand cracked material.
Despite the high sales figures, Europe still seems to be uncovered on their US/Chilean stocks.
Some buyer are buying some of the remaining stocks from Eastern Europe as alternative for their demand. The risk on these products, as mentioned in our last report, became reality in some occasions.
Based on these limited options, the first fresh crop from Eastern Europe might be the first factor to bring some relief to the market. Following development from this region is there for strongly advised.
The prices of cashewnutkernels remain high and went up even further over the past 2 weeks. Supply and demand is not in balance and creating ‘shortages’ causing increasing prices.
Supply: the main supply of raw material is from West Africa for the moment as Vietnam and Cambodia are nearly finished. Traders from West Africa are increasing their prices and started to re-negotiate their cheaper priced contracts. Political issues in Ivory Coast and Guinea Bissau will have an impact on supply of raw seeds from West Africa keeping supply ‘short’.
Demand: remains good for the moment. The current higher prices for kernels are not seen in the supermarket yet and consumers still consider cashewnutkernels as a very nice and attractive snack. Spot stocks in Europe (mainly) but also in the USA are limited as no importers/traders are/were willing to bring in long positions, since the idea has been that prices could suddenly start dropping as demand and supply balance out again.
As buyers are expecting kernel prices to come down, they did not buy far forward and have to cover their short positions from spot or nearby shipments. A significant volume of kernels was booked when the market had a temporarily ‘drop’ and was at levels of Usd 4,35-4,40 per lbs FOB. Will those contracts be shipped from June-October is the big question mark? With the current raw seed market, processors most probably won’t be able to ship these cheaper contracts without making huge losses and will possibly be forced to sell new -and much higher- containers to balance their book, or (worst case) renegotiate their contracts (which is exactly what processors have to do to get delivery of their raw seed contracts).
A volatile market with a lot of uncertainties for the coming weeks/months. There is a strong need for the market to settle soonest possible as todays reality and prices will otherwise have a considerable impact on consumer demand, and that will cause a rollercoaster ride into the 4th quarter of 2017 and 1st quarter of 2018.
There is not a lot to be said about the macadamia market compared to our earlier reports. The market seems to be extremely short for snack grades and is unlikely to change positively as the stock positions are very thin (non-existent) and most new crop is committed. On the ingredient styles there is also more and more pressure and therefore it is recommendable to cover till new crop (till June 2018!). The only uncertain factor at the moment is China with the arrests that have been taking place, but so far it is not having any impact on demand as there are still a lot of enquiries going through the market. There are no offers available as we are still in the early stages and it remains to be seen what the quality looks like. First indicators are positive, but the recent heavy rains in the southern growing areas might have some negative impact. We are assessing this now. It will be interesting to see what people say at the INC conference. We will keep you posted.
USA: Market is stable and processors in are processing and shipping their commitments which most have been booked during the start of the new season, i.e. January and February. Due to this limited demand but good cover for the processors, not much news to be reported. First indications on the new crop will be available just after our summer on the northern hemisphere, during August/September.
South Africa: the new crop will become available shortly. Crop is OK and there is a lot of demand from China. Approx. 85-90% of the South African pecan crop is sold as inshell to China. This is mainly for the sizes oversized, extra-large and large. Smaller sizes are processed locally. Most of those kernels are consumed locally within South Africa and some are exported. We have offer available on request.
After the first few months of the crop it became clear that this year’s crop would be significantly lower than previous years. Factories had two options: either go slow and stay open for longer or run at capacity and shut early for the season. Most factories chose to run at capacity and shut early. This meant that shipment March – May is likely not to be significantly down on previous years. From June /July many factories will stop their production.
As the Brazil Nut market is relatively small, every price traded became the new level for the next factory to sell as minimum. Higher export prices achieved enabled factories to compete for raw material, paying higher and higher prices. As a result raw material prices are now nearly 4 times higher than the start of the harvest.
Export prices have reached a level where there are very divided opinions amongst the buyers: some buyers are no longer leaving it to the consumer to reduce demand but instead have removed lines from shelves or started amending recipes to lower brazilnut usage in mixes, whereas other buyers want to make sure that they have supply of brazilnuts and are willing to pay the currently offered prices, or up their bids in order to entice the factories to offer.
The NASS crop estimate has been released by the USDA, reporting about a total crop of 2.2 billion pounds. Industry experts already quoted higher figures in the build up to the estimate these weeks, speaking about levels of 2.25/2.30 million pounds. The decrease from the expected levels onto the USDA estimate resulted in a firming market, prices moved up with levels of roughly 5 cents per lb. As discussed in our reports during the last two months, the main driver for the actual figure is the increase of bearing acreage this season. The USDA estimate is counting on 1.000.000 bearing acreage (2016: 900.000) in combination with a yield per acre of 2.200 pound (2016: 2.280). The favourable weather conditions during March and April, seem to have encouraged kernels to increase in both size and weight. Next to Californian situation is also the estimation of the Spanish crop becoming clearer. While Spanish reports stated that up to 80% of crop was damaged by frost in the last week of March shows the latest estimate an increase of 26%, resulting in a total crop of roughly 45.000 tons.
So far Almonds didn’t get that popular as expected based on prices of other nuts, but the situation might be changing. Demand for new crop has been picking up, buyers are starting to cover their forward positions in order to make sure that they make use of the current market.
After months of yoyoing prices the Turkish market seems to settle down due to the involvement of the TMO. The guaranteed prices as published by TMO formed a stable base for stockholders and handlers. Also the upcoming Ramadan, which will start in less than two weeks from now, is keeping the domestic market from unexpected moves as most parties are buying and selling hand to mouth, considering a likely price drop once the Ramadan needs are covered. On the other hand, there are still exporters who need to cover their forward contracts, therefor a stable continuation of the market isn’t guaranteed.
The crop estimations for the 2017 crop took a hit after some heavy winds and cool weather, rumours of approx. 680.000 MT are spreading its way on the domestic market. A clearer view on the crop size will follow in two months. The behaviour of the TMO is important but an uncertain factor for further predications, covering hand to mouth can be seen as the most likely strategy these days.
The Chilean export market has been operating successfully from the start of the season on. So far, we do not see any firm reason for their cards to turn. Demand from Europe and South America appears to continue on a regular pace, China and India are indicated as biggest export market at the moment. Chilean exporters are well sold on the nearby positions, most packers are focussing on forward positions for July / August shipment. The current situation is not likely to allow any price drop in the coming months, sales are expected to continue at this pace, resulting in a totally vanished carry over. The situation in Eastern Europe continues unsettled. Frost has been witnessed a couple weeks ago in the Moldavian / Ukrainian border region, rumours from other regions in Odessa followed quickly. The impact on the crop development seems to be minor, but triggered the buyers to start following the developments in these regions. With the price development of the 2016 season in mind, it remains unclear at what levels the market for 2017 is likely to open. The spot market for this origin is frankly speaking closed, quality of last remaining stocks is doubtful, even when stored in the appropriate conditions.
All signs for a good apricot crop are green as the risk of frost is basically over. The information from origin is pointing towards a 150.000 mton crop. This means there will be sufficient apricots for a good season at attractive prices. Prices for new crop have eased quite a bit and are at a discount of current crop. Demand is expected to be healthy at current prices levels. Offers are available upon request.
What to write on the market of cashewnutkernels. It remains very very difficult and so far, it is hard to forecast the coming months. Everybody in the market was expecting prices to ease during the 2nd half of 2017 but the opposite is happening, prices for cashewnutkernels are becoming firmer nearly every day at the moment. This is for whole grades as well as for pieces.
Supply: the fact is that the crop in Vietnam and Cambodia is down by 30-50%. The 2nd and 3rd crops in West Africa are question marks. They might reach the quantity of last year but the quality/yield is less than last year, causing higher production costs and lower yields, i.e. increasing kernel prices.
It is not only causing increasing kernel prices, but also the price of raw seeds (even it is down on quality) is increasing. As the gap caused by the damaged Vietnamese and Cambodian crop will not be filled up by W-Africa, the only hope is for good crops on the southern hemisphere by the end of the year (this will only be 20-25% of total world supply).
Demand: there is continuous demand in the market for significant volume. Buyers were awaiting the prices to come down and only covered hand to mouth. Now most buyers realise that the market will remain high priced and cover a couple of months forward, but are still afraid to cover position until the end of the year as the hope is that the African crops might give some relief later on.
Because of the uncertainty, we recommend covering up to 80% of your requirements until the end of the year.
The season is finally picking up some speed. Australia and South Africa have started harvesting and the drying bins are full. It looks like the season is a bit later for the early varieties and funny enough earlier for the late varieties. This is causing some interesting situations at the factory. The quality in South Africa so far is good. The product is a bit bigger in size, which is the opposite of the past season where we also saw a higher percentage of Style 4R or 4S. For Australia there is not much to mention. They have also started harvesting and we hope the impact of cyclone Debbie was limited. In Kenya there is some concern about the crop, which is apparently short and could cause some problems as quite some forward bookings were done.
On the demand side we see good demand for all styles. On the snack styles the situation remains very difficult and this is most likely not going to change. There is still quite some covering to be done. On the ingredient styles we also see increasing demand and here there is still some room although it differs very much per processor as we there is still concern on the amount of product that will be shipped as NIS. It is clear that a lot of exporters are challenged to do more NIS as the returns are still a lot a better. On the contrary, most processors don’t want to go this route as the risk is also much higher. 2/3 weeks ago it looked like we were heading for a similar season as 2015 when there were also arrests in China. This time a big player was caught and his factory closed because of importing through the grey level. We however believe the fundamentals are quite different and demand from the final consumers still very good. This is also seen in the response from the market where quite a few customers approached factories directly and stressed to use the legal routes into China. This is at the end of the day a good development and decreases risks on the long term.
Over the years the Australian Macadamia Society (AMS) has done a lot of work in promoting macadamias in Asia recently and also achieved better import tariffs for Australian product. It finally looks like their South African counterpart (SAMAC) is following suit by signing a MOU with the Specialized Committee for Nuts and Roasted Seeds of China National Industry Association (CSNC). China is a crucial market for South Africa especially for NIS and China the other way around is also strongly dependent on South African product which is seen as the preferred origin for inshells. It is good to create a more square playing field. South Africa is heading for considerable growth and therefore it is good to build strong partnerships.
Our recommendation remains unchanged. It is wise to cover your needs till new crop. Availability will remain an issue for macadamias for 2017. For 2018 we trust the situation will get a little bit easier and give opportunities for product developments again.
With the NASS crop estimate approaching, which will be published 11th of May, the almond market decreased to even lower levels. Although almonds were likely to become more attractive based on the upward movement in the field of a lot of other nuts such as cashews, we haven’t witnessed an increase in demand (yet). So far the new crop seems to be developing in a confident way, no weather extremes such as storms or droughts are seen, neither expected. If the NASS will report another bumper crop, the Californian industry might be tensed to start filling their books on the new crop, which could indicate even further reduced prices. At this stage our advice is to wait for NASS report, but keep in mind that more demand is expected if lower prices are quoted due to a bright crop estimate!
Last week we reported that TMO decided to intervene the market by buying stocks from the local market. The market firmed directly after the publishing of the TMO buying prices, as a lot of buyers tried to get their needs booked via regular channels. The peak in demand vanished quit rapidly as well, market eased in a couple days to the levels as before the TMO confirmation. Right now, two weeks after this news, the purchasing conditions are still not clear, resulting in a lot of stockholders moving towards the private market. It remains unclear which quantities TMO will buy, it is for sure that a lot of material which is sold to TMO has been mixed with old crop. Next to the TMO is also the crop development still an unclear factor. Frost has been reported in black sea regions at levels of 800 meters, general temperature in May hasn’t been ideal for the fertilisation period. Although some rumours enter the market about a lower 2017 crop our advice is to follow the market closely and await the crop reports later (end of May/June) as it still too early to make any hard predictions.
The eyes of most European buyers seem to be set into other directions than walnuts these days. While the US stocks are fully committed and no decent quality can be expected from the 2016 EU crop, the Chilean industry is in the meantime selling at a rapid pace. The general Chilean market started to come down slightly, but a closer look shows us that it’s mainly the new players whom are trying to fill their books with lower offers. The expected increase of the Chilean crop for the coming years could be seen as a legal factor to declare the high level of competition among exporters. The current situation is perfect for these exporters to enlarge their customer base, a strategy in which buyers search for the ultimate price is seen as beneficial. On the other hand we advise to keep in mind the high sales figures, which result in high risk on the long positions.
Prices for Brazilnutkernels are continuously increasing. The crop failure is really having a big impact quantity wise and price wise. There is no spot product available in the market. Packers are adjusting their nut mixes where they can as supply is a big problem. The nuts brazilnut offers from origin are very scarce and continuously increasing. We heard levels over Usd 8,00 per lbs already, this is even more expensive than macadamias!
We wrote in our previous report that the market of cashewnutkernels is a rollercoaster and this is again confirmed over the past days. While we were under the assumption that the crops from West Africa would fill up the gap the damaged Vietnamese crop would give, the latest information from West Africa is that the 2nd and 3rd crop might have issues as well and be less than expected. When this is the case, the prices of raw seeds will remain firm and might be even firming in the coming weeks. This is concerning news knowing that most of the demand for the 2nd half of 2017 still has to be filled in.
The past weeks macadamias were quite a hot item. The cyclone in Australia was a bit of a shock, but the first signs are that the damage might be limited. The crop however is coming in rather slow and as such it is very tricky to give a firm estimate. The Australian Macadamia Society (AMS) downgraded the crop from 49.500 to 47.500 mton (1.5% Moisture) for the moment. This is only 4% damage, which is quite positive. Time will tell whether this true, but fact is that there is some damage and that there is even less product available.
The news from South Africa is also not very clear. Last week there was some concern in especially Levubu that the crop might even be worse than 2016 and the main growing area in Mpumalanga was possibly also a bit disappointing. Others however inform that the crop is looking quite good in Mpumalanga. The crop in KwaZulu Natal is looking healthy and will be the main driver of growth for 2017.
The situation in Malawi and Kenya is unchanged.
The demand for kernel is getting stronger and there is some concern whether there will be sufficient product to supply all customers with the snack styles. For the ingredient styles the situation is a bit easier, but also here interest is growing. On NIS demand remains strong, which is quite interesting since there have been some new arrests in the Linan area. This is like the 2015 season, but the fundamentals in this market have changed and we see more demand from final customers that have different policies and do not want to use the grey route. These customers are still desperate for product.
All in all, it is recommendable to cover your positions, because the supply situation will remain tight for 2017 season. Even though, it might be difficult to find offers as it is still early in the season (factories only just started processing) and there are quite some uncertainties. Therefore, it is crucial to monitor this market closely to make sure you get what you need. We are more than happy to assist you in this search.
We have seen several remaining stocks ourselves during our presence in Eastern Europe last week. The difference between the well stored and frankly speaking fully committed stocks in comparison to the last (very limited) uncommitted material was remarkable, and once again verified the fear of European buyers towards new contracts during this time of the year. The strategy of some reputable buyers, which involves covering the annual needs in September via call of contracts from reliable facilities for the follow op of the season, has worked out well for the 2016 crop season.
The US market keeps on chasing records, the March shipment reports noted another all-time high for the total shipments during March. Both the monthly figure (+29% in comparison to 2016) as the year to date shipments (+26% in comparison to 2016) have increased significantly. If shipment figures continue at this beat, the 2017 carry out is likely to dry up completely. Although the Chilean shipment figures are not as detailed as the California Walnut Board, it is clear that this origin is selling at rapid pace as well. Some suppliers already reported to be fully committed on the inshell product, the time of the kernel market is logically behind, but following steady as the supply from other origins is basically vanished.
The environment in which the trade of Turkish Hazelnuts is taking place has changed dramatically. The first rumours started spreading its way through the market after the tweet of Faruk Çelik, (Turkish Minister of Food, Agriculture and Livestock) about the active role of the Turkish Ministry of Agriculture in terms of purchasing of hazelnut kernels. Yesterday morning these rumours have been confirmed by the TMO including the inshell buying prices which they will handle. Prices for Giresun variety have been announced at TRY 10,50 per KG and TRY 10,00 for Levant. The market responded directly on this news and prices jumped of 4-5% instantly. Although the link between this crucial decision and the timing of the Turkish referendum is disputable, it is more than clear that the landscape of the global hazelnut market will be effected by this development. In order to form a clear view on the actual impact on the 2017 crop, we need to await further announcement regarding the detailed purchase requirements of the TMO including crop year, quantities and the sales of these stocks.
The availability of brazilnutkernels remains very difficult. Here and there you can find a pallet but prices are well above Usd 7 per lbs already. The difficult situation will remain until the new crop (middle 2018). It will not be a matter of price in the coming months, but of availability.
The market of cashews remains a bit of a rollercoaster.The one day sellers are discounting their kernel prices as they have no demand and buyers are gone while the next day, some demand shows up for limited quantities and prices immediately increase a couple of cents again.
Raw Cashew Nut (RCN) demand is almost as volatile, whereas there is a lot of rumours that impact the sentiment in the market.
The facts (and rumours) at the moment are as follows:
1.The crops in West Africa are reported be good with the biggest producer Ivory coast reporting a crop over 800.000 mton of raw seeds – rumour.Fact may be that the crop comes in somewhat lower on volume and quality due to rain damage.
2.The crop in Guinea Bissau is 3-4 weeks earlier so shipments from this producing origin are expected to start during April/May – fact. Demand is high and price may hit all-time highs.
3.Prices of raw seeds have eased a bit in various origins in Africa and are now stable – fact.
4. The Vietnamese and Cambodian crops are questionable on volume and quality. They are definitely less in volume compared to last year and quality is reason for concern in some areas – fact. This is having a negative impact on the supply for very short term, supply of RCN to the processors will only reach some sort of saturation point when the shipments from West Africa will come in in significant quantities – fact.
5. The prices of kernels are moving on demand at the moment as written above – fact.
6. Most buyers are covered until May and will be in the market with new inquiries for June 2017 onwards – fact or rumour ?
7.Most buyer are expecting prices to ease from June/July onwards – fact….but will this happen ?
Keeping all the facts in mind, our expectation is that prices will remain firm probably slightly longer than earlier anticipated because of the crop issues in Vietnam/Cambodia but that generally prices will come down during the 2nd half of 2017 when enough raw seeds from West Africa (approx. 40% of total world production) will arrive in India and Vietnam. We do not expect prices to fall below Usd 4 per lbs (for WW320) again but will be between Usd 4,15-4,50 per lbs (for WW320). Our recommendation therefore is to be covered until July/August and be patient a bit for later shipment positions.
The first new crop arrivals in South Africa are delivered to the factories. Crop certainly looks better than last year but not expected to pass the 50.000 Mton NIS mark this season.
Australia is hit by cyclone Debbie which has caused some damage in some of the main macadamia growing areas. The considerable rainfall over all macadamia growing regions following the cyclone might hinder harvest which is now underway. Some reports are indicating a crop loss between 8-10% but we have to be patient for another couple of weeks before this will be known/confirmed.
The Australian Macadamias Society reported as follows:
“The Australian macadamia crop has been affected by Cyclone Debbie and recent severe weather and is likely to be revised to around 52,000 tonnes @10% moisture (48,750 tonnes @ 3.5% moisture), the same as the 2016 crop.
While growing regions like Bundaberg in QLD and the NSW Mid North Coast appear to have been largely unaffected, there has been some crop loss in both SE Queensland and the Northern Rivers of NSW and varying degrees of erosion and tree damage/loss in those regions.”
The continuous demand for all styles is causing price increases, especially for nearby/first new crop shipment positions. This is caused by relatively empty pipelines in the consumption countries. Also, the heavy demand for
Nuts inshell from China continuous to put pressure on the farmers/exporters to sell more Nuts inshell. The Chinese (predominately Inshell) market continuous to grow, but since this is the only Inshell market, one must ensure to focus on building the general kernel market, as the world-wide crops will grow significantly over the coming decade which means new buyers and markets must be developed.
For the first time in weeks we’ve seen some activity for Eastern European walnutkernels. Although most buyers are reluctant on buying the remaining 2016 Eastern European crop, we did receive several requests.
A great share of the remaining Eastern European crop is in the hands of traders. Processors in Eastern Europe are focussing on the purchase of, and preparations to crack, Chilean inshell walnuts.
First loads from this route are expected during the end of May in Europe.
The Chilean market for walnutkernels remained stable over the past two weeks. Some first relief is seen on the later shipments, i.e. June and July shipments. This price relief could indicate a first burst in the strong position of the Chilean suppliers. We will keep you posted on further developments.
The failure of the Brazilnutcrop (possibly due to El Nino) is creating big problems for the processors in origin, for the traders and for the buyers (packers and industries). At the moment it is not only a question of price anymore but a question of availability. Numerous inquiries from all over the world come to our office and unfortunately we have to advise them that we cannot offer. We are supporting our long term customers wherever we can.
This situation is not expected to change until the 2017-2018 crop will become available, usually during December/January. Many customers asked us if collectors could go further into the jungle to collect nuts but this is not the problem. There are no pods with nuts!
Prices from origin are varying between Usd 6,70-7,50 per lbs basis FOB depending on the packer and availability. As it will not be a matter of price but availability we unfortunately have to recommend buyers to check how they can limit their demand and work through this season as we hope that next season supply will be back to usual.
The prices of Pecannutkernels are more or less stable. The US crop is bought and shipped as inshell to China or in the hands of the processors. It is not expected that a lot will change in this market until the first new crop signs will be seen around July/August. Smaller halves are scarce and recommendable to cover while buyers have to work with a lead time of 4-6 weeks before shipment as especially the industrial market in US is using a lot of pecannutkernels at the moment.
The South African crop will become available during June/July. Due to heavy rains, some varieties might have some quality issues. The majority (up to 90%) of the crop will be shipped as nuts inshell to China. The remaining part (not suitable for the Chinese market) will be shelled and mainly sold domestically.
The Turkish hazelnut market remained stable during the last two weeks.
There was, and still is, a lot of 2015 crop offered in the domestic market. The price gap between ‘old’ 2015 crop material and the current crop (2016) product seems to widen step by step.
This trend is likely to continue as several reports are writing about a good 2017 crop development and interest will concentrate on current crop and new crop (to avoid risk of quality issues on 2015 crop product).
The 2017 crop is a little late (about 3 weeks). The positive point on this is that the frost damage becomes limited. Turkish stockholders, both farmers and middleman, are expected to return to market based on the fact that the main excuse to stay of the market (frost damage) is disappearing.
Our recommendation is to follow the market closely and only consider nearby positions.
The latest weather conditions in California supported the positive predictions for the 2017 crop. The spot market reacted with a slight price decrease. Some handlers/traders offered some loads just below the market to get some commitments in their books. The market is expected to continue on a more or less stable route for the coming weeks. First official new 2017 crop estimate will be next month, as the NASS estimate will be announced on May 11, 2017.
The prices of RCN are still very firm (in Asia and Africa) where we expected them to ease now with the first West African crops coming in. According the information we receive from the various producing origins, crops are mostly a bit late but otherwise OK, although we received a report his morning stating that unseasonable rains in Binh Phuoc (Vietnam) might have a negative impact on the 2nd blooming stage, and in Benin it is rumored that the Harmattan winds have caused flowers to die on the trees. Reports from Ivory Coast are showing a very good crop potential, but the question will come if Harmattan winds have had impact there too. There is strong interest for first new crop shipments from Africa, especially March/1st half April distiches. These are mostly hard positions since a lot of RCN is still in the drying process or in hands of local traders that anticipate higher prices.
Kernel demand at the moment is very slow, especially for 2nd quarter 2017 shipments. This lack of demand is causing kernel prices to ease a little bit and some offers are available around Usd 4,60-4,70 per lbs basis FOB. Is this the turning around point is a question mark. The RCN afloat or to be shipped shortly are still very high priced and the equivalent WW320 price should be around Usd 4,55-4,60 per lbs at least. This product will be processed in April/May and become available for shipment June/July. Do processors need to accept losses and hence sell at lower kernel prices, or will kernel prices remain firm and buyers around the world will adjust their price ideas? Some processors are convinced that prices will jump back up when demand will show up again in a couple of weeks’ time.
Our recommendation remains to be covered for the 1st half of 2017 shipment. Spot stocks in Europe and USA are very limited and premiums are paid. When your calculations allows, we also would recommend to take a partly cover for the 2nd half of 2017 up to 25-30% probably.
Demand for NIS from China continues to be strong. China is buying from all producing origins, even when it is not allowed to export NIS (as for example from Kenya).
As such there might occur a ‘shortage’ of kernels. Wholes will be the first to become limited available and it might later on also be the case for style 4, 5 and 6.
This is not the case yet, but we see strong demand and a growing uncertainty amongst processors what to choose. Sell NIS (and get on the short run a better return) or invest and expand on kernel sales while your market is bigger than just China and with the fast expanding crop (bumper crop in 2018??) expand your customer base.
In the enclosed figure you see the price development for 2015-2016 for both Style 1 and style 4.
As you can see the development for style 1 is more volatile than for style 4. This has mainly to do with the strong demand for whole nuts worldwide, but we also feel that there is a limit in the price.
For 2017 we don’t expect prices to ease for style 1. For style 4 we have seen a pretty stable price. There has been sufficient demand for this item. The same goes for style 5, which is seen as a tailor-made product for many ingredient buyers. Volumes of this item however are very limited as most suppliers only have a natural style 5 (some call it 4R).
The yo-yoing of the Turkish hazelnut market continued during the last two weeks. Farmers at origin are seen as the main driver for the climbing market. Farmers are trying to get rid of the last 2015 stocks while processors are not interested. Supply of 2016 crop is limited and therefore prices went up.
Observing the latest updates on the 2017 crop, the expectations for the new crop are good. A number of reports from origin mention a very good flowering in combination with a decent pollination, should result in a good crop. Latest updates are indicating a crop slightly above 700.000 MT.
With the yo-yoing market the short term is hard to predict. The current political situation is not helping either, as the rate of USD/TLR is yo-yoing as well!
As the US market is basically committed for the 2016 crop, the Eastern European suppliers not offering due to the lack of raw material, are the eyes of buyers on the new crop from Chile.
The Chilean industry witnessed a lot of interest during the last two weeks. Both the kernel as the in shell market are very active in terms of inquiries. Although a lot of demand is around, a significant number of buyers are still reluctant to book business, waiting for better prices.
The Turkish in shell market for example, which is known as an important importer from Chile, is not eager at the current levels (up to USD 4,10 per kg) for in shell varieties.
Chilean sellers claim that the market depends on the Chilean walnut crop while buyers claim that Chile will need to improve on their prices to sell the record crop this year.
Last week we have seen a slight increase of prices, a clear indication that Chile is not willing to move towards buyers comments/purchase interest, at this stage.
While the nut business in general is facing a lot of uncertainty and rising prices, the almond market is moving in a stable price range. Prices have been relatively stable during the two last weeks and no serious movements are expected on the short term.
Indications for the long term are driven by the weather situation in California during last weeks. The conditions were not perfect during the blooming period but based on the increase of bearing acreage still a good crop is expected. No further price relief is expected. It is our recommendation to cover hand to mouth for the moment until more is known on the new crop.
The market of cashewnut kernels remains tight. Spot stocks in European and US warehouses are very limited and prices remain firm.
Supply: processors are reluctant to buy RCN without selling kernels as most players in the cashewnut market are still convinced that the prices of kernels will come down when the supply of RCN will flood the market. This is keeping the market of kernels short.
Prices of RCN in West Africa are very firm, as there is limited stock available (as it is still early in the season) and a lot of buyers try to buy parcels for immediate shipment (and fast processing). Farmer prices are at all record highs, and this bodes for a very difficult season since a price decrease during the season may cause total mayhem in the market. Those procured RCN will be shipped shortly from West Africa to India and Vietnam to be processed. This will take approx. 4-6 weeks, i.e. available for processing during half April/May onwards. The kernels out of those RCN will be available for shipment during June 2017 from India and Vietnam to be available in the US and European market during July & August. Processors are forced to buy at the current firm prices and cannot sell at a discount to today’s kernel prices without taking a loss!
So it is becoming a ‘chicken and egg’ story:
– Will the farmers/traders lower their prices first (most obviously will not happen shortly)?,
– Will processors discount prices (most probably not as they have to accept losses then)?,
– Will buyers stop buying (they can’t as they have contractual obligations)?,
What will happen when RCN prices finally start to come down to levels that are related to the balance between world supply and demand ?
Demand: generally still continuous to be strong, even though there are reports that demand is going to be down due to the higher consumer prices. Buyers are reluctant to take forward positions as they are afraid to sit with high priced inventory as and when the kernel market starts coming down. Strategically buyers keep on buying hand to mouth and keep feeding the kernel market with steady demand. The higher prices in the supermarket will have an impact on consumer demand but the real figures on this will take another couple of months.
Keeping the above in mind, we recommend to take a cover at least until June/July and probably up to 30-50% for the rest of 2017.
It is good that we can update you from source. We have been travelling through Kenya and South Africa meeting processors and growers to get a better idea about the crop. This together with the latest updates from Australia is giving some answers to the current situation. Let’s first have a look at the crops.
After quite positive reports from Kenya this needs to be rectified. The drought is causing problems and has a negative impact on the size of the crop. Besides that, also the Chinese demand is a concern in Kenya even though they are having a ban on exporting NIS. Last year 3.000 mton of NIS was exported through Tanzania, whereas they don’t grow macadamias there and likely a big portion (if not all) is coming from Kenya. The hunger of China is definitely not stilled. We understood that they are more active and the industry not having an official opening date for the season is cutting itself in its fingers. Even though it is understandable that you want flexibility the fixed date was at least securing the crop to come in mature. Now we see that small-scale farmers that are keen for money are harvesting their product rather early resulting in high percentages of immatures. All in all, we expect lesser quantity from Kenya to hit the kernel market.
If we then look at South Africa the signs for the size of the crop are looking slightly better although unfortunately not back to 2015 levels. The northern growing area Levubu had very good rains over the last months, but that will only have a real effect on 2018 crop. For Levubu we expect a slight increase. In Mpumalanga we hear many different takes
on the crop as there was some rain in certain areas, but in others there was hardly any till December. Anyhow with the new plantings coming into production we do expect a healthy growth here compared to 2016, but we don’t
expect it to be back to 2015 levels. For KwaZulu Natal, which is basically the new growing area, it is looking a lot brighter. They had timely rains and it looks like we will see an increase in production over there, but the impact is relatively small as most trees are still young. Will this automatically mean we will have more kernel for 2017? This is unlikely. The demand for NIS is very strong and looks like is going to take a way a fair portion on the crop.
Lastly Australia, who reported a crop of around 50.000 mton (1.5% moisture content) and as such healthy growth of about 4%. Not everybody agrees on this figure, but let’s hope it is true as the industry basically needs the volume. Also here more product is expected to be allocated to NIS, but Australia is also having a strong focus on kernel domestically and new markets (Asia), where they have a great advantage because of the Free Trade Agreements. This is a great achievement of Australia and putting them ahead of the pack in this growing destination.
Let’s go back to the NIS. At present prices are overheating, but there is not much that can be done on that. Fortunately, not all product can be send as NIS so we will have certain volumes available, but the slow approach from in particular the US is in our opinion not the right strategy and could cause supply difficulties later on. Europe is slowly but steadily buying and the same goes for Asia. The continuous demand of the past months caused a price increase for snack Styles (Style 0, 1 and 2) while the prices for the industrial usage (Style 4 and smaller) stabilized as you can see the figure. Therefore the gap between snack and industrial Styles increased again.
All in all we recommend our buyers to have a good look at their needs and start covering at least 50% of it.
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.
USA: most of the crop is sold and in hands of the processors. A lot of the product is committed. Prices are stable and not much fluctuations are expected. Pecannutkernels become more and more popular in the US for industrial usage and I picking up with the European bakeries as well.
South Africa: due to the weather conditions, crop is expected to be smaller but also have more defects. Most of the South African crop is sold as inshell to China (approx.. 85-90%). The smaller inshell nuts are processed into kernels and mainly used domestic. We have some quantities on offer for halves and for pieces. In case of interest, please advise.
Prices of Turkish hazelnuts came down significantly. The sufficient availability of old crop in combination with the poor demand and weak position of the Turkish Lira, are the main drivers for this price drop. Also reports indicating a decent pollination of the trees so far which should set a good 2017 crop are helping the prices to come down.
New crop report of the Turkish Exporters Union will be published within a couple days.
It might be an interesting moment to cover your positions until new crop at current levels and watch the new crop developments closely to make a call on new crop in the coming months.
Eastern Europe: the situation basically remains unchanged. Buyers are reluctant to buy from Eastern Europe due to quality issue rumours while suppliers want to limit their risk as well by only selling readily available tested and approved product. There are ‘reasonable’ offers available for average quality while tested and approved product is much more expensive.
The speculations on pricing at the Gulffood exhibition triggered the Chilean market to start offering on an active bases. The first offers were in line with the expectations in terms of pricing. Expectations of the actual crop remain positive.
First containers of SERR variety are planned for end March shipment. Chandler variety is likely to follow during the end of April.
Based on conversations with several suppliers, the Chilean industry still has a confident attitude, they are expecting a good season ahead.
Our expectations of this market will become more clear after the general grower meeting, which will be held this week. Feel free to send us your inquiries so we can make you a customized offer.
After the upwards spiral in pricing during the end of February, because of the bad weather, it looks like the market has settled itself. The impact of the heavy rainfall is still unclear. Reports from experts at source differ in terms of actual crop damage. The pollination is the main driver for further market/crop forecast. The pollination conditions so far haven’t been really good and this could be an indication that the expected bumper crop (based on bearing acreage) will not show up. The current conditions are in our opinion taken into consideration already in the current prices though could cause some further upwards movements of prices when those rumours gets confirmed.
The price for cashew nut kernels remains high for whole kernels in store and on nearby shipments. Most of the packers from Vietnam and India are fully booked for the March and April shipments, caused by a limited quantity of RCN available forcing the processor to process on lower capacity. First new crop Raw Cashew Nuts from West Africa (Nigeria, Ghana and IVC) are bought and offered by traders at very high levels. Most of the Vietnamese processors are reluctant to book at these levels as the kernel buyers expecting the market to come down based on the actual crop forecasts for the Northern Hemisphere Crops. All in all a very interesting situation wherein buyers continue to buy kernels for their small term needs at high prices and prices expected to ease when sufficient RCN is coming into the market from April onwards.
The situation in the macadamia market is pretty unchanged. Demand for NIS remains extremely strong. This continues to be a threat for the kernel market. There is no parity between NIS and kernel prices at this point. Looking at the demand for NIS this is also not expected to change in the short future. Demand for kernel is picking up, but it is still very early. It will be interesting to see where prices will go. In the past years we have seen that kernel prices have reached their upper limit with demand fading away especially for style 4 if prices move up too high as is visible in the graph.
On the supply side the market seems healthy, but kernel supply is likely to decline because of more product allocated to NIS. We repeat what we wrote before. It might be wise to have a look at your needs and take some forward cover especially for the first shipments.
Next week we will be travelling to South Africa and Kenya again to get a better view on the supply side. We will keep you posted about our findings.
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.
The market for Turkish hazelnuts stayed relatively stable during the last two weeks. Most processors seem to feature enough stocks in order to cover their contracts for the nearby period. The snowfall which is covering a great share of the growing regions has triggered a lot of speculations regarding the new crop. Nearby forecasts are seen as the most important driver for assumptions at the moment, as the blooming is most vulnerable for weather extremes during this period of the year. Demand as per today seems to slow down, decreasing TL/KG prices are equalized by the USD/TL rate, keeping export prices more or less at the same level.
We still haven’t witnessed a lot of movement from Eastern Europe. While some urgent demand is filled step by step, buyers are reluctant on covering any further positions. Next to the firm price levels buyers have been scared by the presence of unsure quality these days. The low availability of crop has forced processors to look into other directions for raw material, allowing low quality and incorrect stored stocks to enter the market. Although demand is pushed down by these factors, the market seems to continue firm on the nearby position, as exporters realise that there is still half a year to be covered.
With the Gulfood starting next Sunday, the eyes of many buyers are moving from the Northern Hemisphere to the Southern Hemisphere, where approx. 90.000 MT of Chilean walnuts are becoming mature. With many reputable sellers from California fully booked for the 2016 crop, the Chilean industry seems to be confident on the start of their 2017 season. The exhibition in Abu Dhabi is expected to result in first price indications. Please get in touch for our latest updates, we are happy to work on a customised quotation.
While the almond market has been in a downwards spiral since the start of 2017, we’ve witnessed a first breach from this trend last week. The heavy rainfalls in California made many sellers at origin to withdraw from the market. This event is reflected by increased selling prices, both at source as deeper into the distribution channel. As for today, speculations make their way throughout the market regarding the actual damage at the Californian orchards. While some say that supply for 2017 took a hit, others are doubting the actual damage and the event of exaggerated updates which are driving the almond market upwards.
The market is searching its way! Will it go up again/further or will it stabilize and come down in 6-8 weeks from now??
Supply: The current supply to the processing units is from Tanzanian raw seeds. The volume is significant but will only keep the processing units busy for 4-6 weeks (when all processing units are in operation). After that the processors are depending on the Vietnamese/Cambodian crop and after those crops the West African crops which will start to arrive July/August. At the WCC in Singapore we understood that the Vietnamese crop is delayed by 1 month but in potential 10-15% better than in 2016. The West African crops are reported to be good as well and thus supply should not be an issue during 2017.
Currently prices for raw seeds are varying very much. We hear prices from West Africa around Usd 1500-1650 (for shipment April/May!!), Tanzania still above Usd 2200 per mton and all kind of prices in between. Supply will remain short in the coming months until the crops from West Africa will start to arrive.
Demand: In 2016 we have seen a continuous (as the years before) growth of demand until the 3rd quarter. From the 4th quarter on we heard some reports about a slight decline in consumer demand due to the increased consumer prices. Cashewnutkernels are still a preferred nut, but there is obviously a limit in terms of pricing. Therefore, the slower consumer interest might have an impact on demand of importers and packers during 2017. Hopefully prices will stabilize shortly so that the slowdown of consumer demand can be compensated with special consumer offers.
Due to the ‘short’ supply (spot market is ‘empty’ and no shipment until middle of February because of TET holiday) we expect short term prices to increase. When the Vietnamese crop will start to come in during end March/April this should stabilize and when the West African crops will start to arrive -2nd half 2017- we expect prices to ease.
Last time there was an increase in interest visible from both kernel and NIS buyers. This trend continues and the interest for NIS even intensified in the last week as buyers returned from Chinese New Year. Available good quality inshell product is limited and therefore it is not expected that this will change unless prices stay within reasonable levels. The Chinese market still seems to have a taste for macadamias, which is also fuelled by the fact that there was very little available this season. This strong NIS demand might have an impact on kernel prices. NIS prices are from a farmer perspective far more profitable. The gap was getting smaller in 2015, but in 2016 this gap widened again. It is obvious that not all product can be send as NIS as quality specification are more stringent than before, but the larger product will be in great demand. There already rumours that Chinese buyers are also active in Kenya and Zimbabwe to get more volume. This business is quite dodgy as Kenya still has a ban and the quality from a considerable portion from Zimbabwe still not upto standards. The appetite from China for large product inshell product is most likely going to have an impact on available style 0 and 1 product. This is already product where demand exceeds supply and this could further develop.
In the past season demand for style 4 and 5 was slower after record shipments in 2015. Demand is stronger than in 2016 when inventories were high. This is not the case this season. At first most demand was for early shipments, but there is also more interest for later positions now.
From a supply point of view sellers are hesitant to book to large volumes. It is still early and there is some concern about the crops. South Africa is looking better than 2016, but how much better strongly depends on the performance of the main growing area Mpumalanga. There were rains, but were they in time? Farmers are a bit conservative after the disappointing development in 2016 and as such it will be interesting to see what happens in the next month. We will visit South Africa early next month when things should be more clear. Malawi is having another difficult year. There are also some concerns on the crop in Kenya.
It is our recommendation to start looking at your needs and do the necessary bookings. We are keen to make you tailormade offers from various origins.
Almonds continued to be the “best buy” of the treenut market the past two weeks. Rumours of several warehouses in Europe stuffed with California almonds are spreading its way through the market, keeping buyers away from rushed purchases at the current price levels. If we combine this situation with the weather reports from California, which show positive circumstances for the trees so far, the almond market is not likely to increase the coming weeks. Although the urge doesn’t seem to be there for quick action, we advise to consider covering short positions as a further decrease is not expected from this point either.
For the first time in weeks, we have witnessed a very small relief on the walnut market around the Eastern European and Ukrainian regions. As most suppliers have felt the lack of buying interest from the start of 2017 on, it seems some smaller suppliers are getting nervous and don’t want to miss opportunities by overpricing their goods. This relief is only seen by a couple smaller players so far, the reaction from the buying side will determine whether more suppliers will follow. Furthermore, the presence of good quality product in the market is still to be seen, making the continuation of the market till the new crop hard to predict. Some expected the general market to slightly decrease from this point on, others expect prices to increase again after the first business at lower price levels might encourage the stock holders to keep their prices firm.
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.
A stable market. Most of the raw material is bought from the farmers and in processors hands. As quite a good volume is sold already, we do not expect major changes in this market on the short term.
The record levels of the USD/TLR rate triggered a lot of buyers during the beginning of the year to cover their needs. As a result of this situation we see a lot of activity between Turkish exporters and farmers at the moment. The current market prices, which are close to USD 7,- per KG for natural 11/13, are boosting the activity on the local market. With rumours coming from other regions such as Georgia and Italy of almost vanished stocks, the Turkish stock holders are starting to reconsider their positions. Some exporters fear another stubborn reaction from the stock holders, which could result in a tensed situation for exporters with contracts for February, March and even April obligations. The uncertain continuation of this situation multiplied by the fact that the Turkish hazelnuts are currently considered as the cheapest origin result in our advice to cover your nearby without hesitations. The pollination reports, as expected by the end of February, will provide us with a better indication for the long term positions.
Prices stabilized but it is hard to find offers for prompt shipments. Due to TET holiday (Lunar new year), Vietnam will be closed next week and will only start shipping again 2nd / 3rd week of February. Large whole kernels (240 grade and bigger) are nearly impossible to find.
Everybody is awaiting the (reportedly) good crops from the Northern Hemisphere and hopefully this will give some relief to the prices. Crops in West Africa so far look decent to good, even though it is early days.
The Vietnamese crop will be delayed due to some adverse growing conditions earlier in the season and only time will tell what impact on the crop size it had. Cambodia seems to be the surprising producing origin this season with a very good crop coming up.
Current price levels for raw seeds are reflecting the current kernel prices and factories working at break-even or small loss to fulfil commitments. Therefore, prices of raw seeds must come down to give a relief to the kernel market.
Hopefully the producers and traders will be aware that current high kernels prices will likely have a negative impact on demand. It is essential to keep supply and demand somewhat balanced during the coming 12 months, which would mean that RCN prices would have to come off somewhat to encourage buyers to push Cashew kernel sales again.
The longer-term estimation is that RCN supply will continue to grow and demand must go up to sustain good prices to all players.
From the demand side, there has been strong demand from the US in the past 2-3 weeks, but it seems to somewhat slowdown. It needs to be said that there is also not much product to be offered for prompt shipment. Enquiries for new crop are coming in. Prices are firm and especially for first shipments not expected to ease. Europe and Asia are mainly looking for Style 0 and 1 and this is something to watch as there is only limited availability and processors want to keep their books square to also be able to choose for NIS, which is currently more profitable. Demand for NIS is still very strong and prices firm. It is our recommendation to consider booking your first shipments on all grades, because even though supply might be higher compared to last season, inventories are low and some contracts have been rolled over and will get priority on shipments.
After the joint marketing program in the UK there was always that idea to work closer together getting people more aware of this beautiful product. But it seemed rather hard to really get things going until now! The INC announced that up to Euro 200.000 is available for the Macadamia Health Research to enhance the understanding of the health effects of macadamia nut consumption. Research priorities include comparing the effect of a macadamia enriched diet vs. a control diet on insulin resistance/secretion, lipid profile (total cholesterol, LDL cholesterol, HDL cholesterol and triglycerides), and other emergent cardiovascular risk factors, e.g. inflammation, oxidative stress markers, etc. including the evaluation of the effects of macadamia nut consumption on adiposity. The contributors are South Africa, Australia, Malawi, Kenya and Brazil. It is good to see the industry moving into this direction as it is an industry crucial to work together to keep the macadamia in the premium segment even with growing volumes that are expected in the relatively near future.
The market on its own is also changing and new products are launched. Macadamia Milk and Macadamia Butters are picking up interest. The macadamia is a great ingredient for all sorts of other products and giving a real premium edge to the product.
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.
The crop is for approx. 95-97% sold to the processors. Therefore, it is expected that prices will stabilize around todays levels. Prices were pushed up as demand for raw seeds was significant. Also, the demand from China for inshell nuts increased although that market is covered now for new crop and expected only back in the market for Chinese New Year 2018 (out of the 2017 crop). Huge domestic sales are keeping processors busy. It is our recommendation to be covered until June/July at least.
After the high shipment figures of the past months, the European market seems to be temporally saturated. We have seen prices from origin decreasing from the start of 2017 on, lower qualities such as STD 5% seem to be less affected. Since the current market is not driven by extreme factors, people fall back on other more undefined indications, such as the positive weather conditions in California for the next season. It stays to be seen whether the decreasing trends continues during the coming weeks. Our advice is to follow the market closely and don’t feel rushed covering the nearby positions on the other hand if you have a need and it fits you have to remember that almonds are at the moment the best buy in the basket of Treenuts.
The situation with pressure on available product from Eastern European regions still holds. While most buyers were awaiting supply to pick up during the past two weeks, a great share of the suppliers from origin is still off the market. Although this should naturally result in increasing prices, the market has stabilised due to the fact that buying interest is weak and uncertain under the current conditions. The actual available product, which is expected to become clear during the coming weeks, will brighten the situation for both the short and long term positions. At the moment, the reduced presence of high quality product from Eastern Europe seems to influence spot prices for USA product, as reflected by slightly increasing selling prices from European handlers. Nevertheless, prices are not running sky high since buyers take a more restrained attitude and prefer to stay careful with long term positions till Chile becomes active.
The Turkish hazelnut market has been driven upwards as a result of the political situation the past few weeks. The extreme USD/TLR rate pushed demand upwards for both short as long term positions. We have seen the highest peak so far at 12 January at TLR 3,92, the market continued yo-yoing from this moment on. Nobody is able to further predict the rate of the TLR, especially since the destiny of the Turkish constitution lays in the hands of the citizens as they are called to vote. The hazelnutmarket itself is as unpredictable. The strong demand resulted in Turkish handlers to mix 2016 crop with 2015 crop so a careful attitude is advised. The rumours of the Turkish chamber of commerce about the flowering in some lower altitude regions have been confirmed by several suppliers. Although this is good news for the coming crop, there are too many influences such as strong winds and rainfall able to reverse the situation. At this stage prices for new crop still stay firm and increasing, coverage for the short term is only advised from reliable handlers from whom the 2016 crop can be guaranteed.
The Turkish hazelnut market finished 2016 at an export level of almost 93.000 MT. While we were expecting the market to close between 85.000 and 90.000 MT during the time of our last market report, we’ve witnessed a small lift during the national holidays, which allowed the export figures to further increase. 2017 started on a firm basis, as processors are dealing with higher than usual handling costs due to the lower quality of crop. The supply is expected to remain stable during the coming week, based on the behaviour of major exporters. The behaviour of the Turkish Lira can however not be predicted, as we are witnessing a peak against the USD (see graph) after the attack in Izmir last week followed by the current debates in the parliament concerning the power of President Erdogan.
The California Almond board released the final shipment figures of 2016 this week. The export figures of December were at a plus 16% level compared to 2015, resulting in a total export figure of 278.530 MT in 2016. The market remained on a stable course during the first week of 2017 and is expected to continue this route on the short term. However, the availability of smaller varieties seems to become less, resulting in a reduced-price gap between the different sizes in the market.
Walnut exporters in the Eastern European regions were, next to the low availability of raw material, suffering from hazardous weather conditions during the first week of the New Year. Roads covered with snow and ice lead to a RED code in Romania and impeded transportation of both raw and finished product. A lot of rumours of actual crop in the market are spreading their way into the Western European market. A great share of exporters claimed to be running short, while some buyers still neglect these reports and await the market to decrease, which is based on our findings at source uncertain. Our advice is to cover at least the nearby positions and follow the market closely to overcome a miss out on the long term.
The factories have been closed for Christmas for the last 4 weeks. People are now slowly coming back and the market is now waiting for more news about the new crop. In our next market report we expect to give you some more information on this. The small crop has resulted in that there is hardly any product left and everybody is really focussing on new crop.
Australia announced that the 2016 crop was with 47.600 mton (inshell at 1.5% moisture) even slightly bigger than the estimate of 45.750 mton (inshell at 1.5% moisture). Australia is clearly the largest supplier of macadamias to the world again and this might be the same for 2017 crop. The “new” growing area around Bundaberg was the main contributor to this nice figure and is destined to be the powerhouse of the Australian industry for the years to come.
The demand has been very good for Australian product especially in Asian countries, which is a result of the following factors:
In total 10.500 mton was exported as NIS to China resulting in a quite stable kernel availability compared to 2015. This can also be seen in exports to for instance the US and Europe, which has been stable or slightly down.
For 2017 it will be interesting to see what the US is doing. Looking at the shipment figures 2016 so far has been quite disappointing, especially after record shipments in 2015. Nonetheless it looks like demand is increasing. We are attending the PTNPA in Arizona this weekend and it will be interesting to hear the different views on the market.
Europe had quite a good year, but is facing some difficulties with the strong Dollar. This is not only the problem for this item, but for almost all nuts. It looks like Christmas sales were good as there was quite some demand in the first 2 weeks of the year for spot material.
The Chinese inshell market so far has been strong looking for high quality merchandise.
Our recommendation is to closely follow this market and make sure that your early positions are covered, because there is only limited product around and we still have to wait till July before serious volumes will be available in the various markets.
The cashewnutmarket has been calm for the past weeks. A lot of buyers enjoyed a well-deserved Christmas break. The market was very slow and prices eased a little bit.
Supply: the current supply for India and Vietnam has to come from Tanzania. First shipments are arriving and they will start processing Tanzanian seeds just after TET holiday. The Vietnamese new crop is becoming more and more a question mark. The crop is delayed and might be smaller than last season. This is making processors a bit nervous and prices increased again since last week.
Demand: as prices came down and most packers covered for the 1st quarter 2017, demand has been slow. It is picking up now again for the remaining part of the 1st quarter and 2nd quarter of 2017.
It is our recommendation, with the current knowledge, to cover your needs at least until the middle of 2017. The Tanzanian seeds will be processed quickly. The Vietnamese crop is delayed and most probably be down because of the shorter harvest period, West African seeds will only arrive June/July 2017 in India and Vietnam and will only give relief (if it will give relief) during 2nd half 2017.
FYI: due to TET holidays in Vietnam there will be no shipments during last week of January and 1st week of February. This also might give some pressure to the prices for the nearby demand.
The hazelnut market remained firm during the past two weeks. While domestic prices continued to be stable, where prices for export destinations were driven up by the currency influences. After we witnessed a dip on the Turkish Lira in the first week of December, the currency recovered itself during the last two weeks. As mentioned in our last hazelnut update, the total exports from Turkey were expected to be below average this season. The export figures of the last two weeks, about 10.000 MT in total, validate these speculations. If this lines pushes through, the estimated figure would be between 85.000 and 90.000 total export this season. While Georgia benefitted from this situation at the beginning of December seem they to be in line with Turkey at the moment, turning them into a less attractive origin again. The market is not likely to come down on the short term. Unsatisfied farmers and handlers with higher production costs (due to the lower average) are the main drivers for this prediction.
The market of European walnuts seems to be in a small dormancy. After the tensed weeks before Christmas the market slowed down during the last few weeks. Most processors use this period to work on their marketing plans for 2017 and are open for bookings in January and February. Due to the depressive season in terms of available raw material do the most suppliers have a reluctant attitude towards bookings after February. Main driver is the change on a premature sell out or worse, the change to get blocked on the raw material by terms of price and availability. Bookings on the short term are advised to take in consideration, the sales during January and February will clarify the options for the long term.
California has been running on full steam so far. The shipment figures of November showed us a ‘turkey’ on exported product, achieving the third record this season. Total shipment figures increased by 39.6% compared to November last year. While the crop of the Eastern European regions has been disappointing this season, has the Californian exceeded the estimated quantity as released by the USDA earlier this year. The estimate was set on 670.000 MT inshell during September, while handlers already reported that they received over 675.000 MT so far. After these intense figures most suppliers are currently of the market, expected to be open for booking again during the beginning of January. Prices are expected to maintain firm for both the shelled as inshell market. Please get in touch for a one to one price update, we are happy to inform you.
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.
Due to heavy demand for inshell pecans in the fields, prices for kernels, (halves and pieces) shot up like a rocket. Hopefully this demand will slow down a little bit and prices will stabilize. We do not expect prices to come down to levels booked earlier for new crop shipments. Our recommendation for the time being is to watch the market carefully but buy only hand to mouth for 1-2 months ahead.
Demand for macadamias seem to be picking up with people trying to cover their needs till new crop and new crop enquiries start coming in as well. The consensus is that the prices will open higher than in previous years since the starting point is quite different to 2016 crop. Last year the inventories were quite high after the NIS debacle. Especially the US was having large stocks and very slow in demand. The first signs now are that the market is empty and new crop sales are expected to pick up shortly. Perhaps around the PTNPA when more is known about the new crop. During our trip around our customers in China we still see a strong appetite for macadamias over there. The high prices are having an impact, but since the market is short now resulting in higher prices again. There is some concern about the price level, but good quality NIS will remain scarce in the new season as well.
The AMS announced that the crop in 2016 was slightly higher reaching 48.600 mton and as such the largest supplier of macadamias to the market. South Africa had a disastrous year and was down to 36.500-38.000 mton, but world supply is stable. Together with the high inventories it has not been such a bad year in terms of supply, but still short. For 2017 it is still a bit early, but the first sounds we are hearing is that Australia is slightly down and South Africa up, but uncertain by how much as the drought is still impacting the crop. Malawi is looking quite bad and Kenya stable. China will grow a bit, but there are still a lot of uncertainties on this origin. Research is needed to get this industry going. Overall supply as such is going to be slightly up, but nothing dramatic based on the available information.
It will be interesting how demand will further develop, but especially for your early shipments it is wise to make up your mind and start covering after the Christmas break.
Review of the 2016 crops:
The crops in Asia were severely down, especially from Vietnam and Cambodia. But also West African crops were down from the previous season, a little bit in quantity but severely on quality.
Supply RCN vs demand kernels:
Total availability of RCN dropped by over 10%. The kernel demand however, also supported by the relatively stable (and compared to other nuts, low!) prices, demand grew considerably over the past 3-5 years.
The current high prices for kernels, almost historically high for WW320 and higher grades in the past months, shall impact demand negatively. Cashews have been ‘undervalued’ to a certain extent, but the recent run in prices have pushed the bar to too high levels.
India local issues; Viet Nam local influences; Chinese demand (and supply route):
The local market in India has been vibrant, growing fast on cashew demand, causing India to hardly export any cashew kernels anymore. Demand locally had been fueled by more kernels being available due to Indian companies buying RCN from Africa for local processing and kernel marketing.
India’s structure is predominantly cash based, and hence cash money plays a huge role in the country. The government recently ruled that 500 and 1.000 Rupee bank notes became null and void. This has negatively impacted the local demand for cashews (among other products that are typically bought cash). The impact is so large that various RCN parcels that were destined for India, or even in the ports in India, are now shipped to Vietnam.
The Vietnamese factories are mostly processing at 50% capacity due to lack of RCN, but many factories are totally closed as well due to lack of RCN.
Chinese demand continues to rise as Nuts are considered healthy, a luxury that is often bought to indulge, and of course nuts have been part of the Chinese diet for many decades (whereas cashews are of course more a novelty).
Forward view on market:
Short term, the coming 3-5 months, we anticipate that there will be much uncertainty in the market of kernels. The lack of physical volume of kernels, prices will rule firm.
India’s demand being under serious pressure will create some relief with potentially some processors having selling pressure and that may put more kernels on the export market. Buyers will continue to buy hand-to-mouth, and any increase in demand will spark price increases.
On the RCN side, the first new crop shall be in huge demand for the first crop coming of the trees both in Vietnam/Cambodia and W-Africa. But since the crops in Vietnam and Cambodia are typically at the same time as the West African main crops (Feb/March), there may be some early demand on first new crop shipments from W-Africa, but that will likely only be from speculators/traders that have limited (or no) real connection to the kernel market.
Summarizing, our conclusion is that we will experience a year that might be unprecedented and one must procure RCN with much caution, especially when it is procured for 12 months processing (as all factories do in W-Africa).
A nice video can be found at: Cashews in your Daily Diet
While the pressure was expected to be reduced on the export market, the latest shipping report noted another increase of at least 39% on exports compared to November last year. The high figures are caused by an increase of the global demand, no specific region seems to be responsible for this increase. China is most close to be called a gamechanger, but even with their import figures of roughly 27.000 MT Shelled/inshell product, they did not even absorb 5% of the total shipped product. With decreasing prices during the end of November, the market remained more or less stable during December. Despite the high shipment figures are prices not likely to increase on the short term. Based on speculations in the market, our advice is to follow the market closely and be reluctant on the nearby bookings.
The market for Almonds showed her strength last weeks, being a firm market with increasing prices. This trend of increasing prices is expected to continue even further coming weeks. Both buyers and suppliers are pushing the market upwards. Suppliers start to trade based on bids instead of selling prices, putting themselves in the position to make the call. Also the increasing demand, ‘caused’ by the buyers who in the first way where after the low prices, is affecting the market. In the last market report we spoke about the expected shortage on the premium grades, these effects are already influencing the market as well, widen the gap between high and low grades. Our strong advice is to cover at least for the short term, since prices are expected to increase during the coming weeks.
After a period of increasing prices, persistent farmers and a market which seemed to be stuck forever, we saw the first relieve in prices in the past weeks. The market seems to be moving again after some farmers in the Akçakoca region started to sell their consignment stocks two weeks ago, more and more Turkish farmers decided to start selling as well. This development is pushed by several factors. The weakening Turkish Lira, the buying prices of Ferrero for Italian crop and the terrible shipment figures of last month declare this selling attitude. Also the presence of both Azerbaijan and Georgia is increasing the pressure on the Turkish farmers, since they are satisfied with the current market prices ( +/- 8,60 USD) and are filling up the demand for this season. We expect this trend to push through in the coming weeks, covering future position is therefore not recommended yet.
Last market report we already spoke about some small delays on the arrival of raw product at the processing factories. Although these delays seemed harmless by then, we spoke with several processors who are getting nervous on the deadlines for their first shipments. This development is putting more pressure on both Eastern European farmers and processors, since demand for this region is mostly used to cover the demand for Christmas. Our visit to Eastern Europe next week will clarify the situation. For now we advise to check your positions which should be filled before Christmas, to overcome trouble on deadlines. The market for U.S. merchandise could be called stable so far, but change is expected to come. Due to news from source of last week, the record estimate of 670.000 MT new crop will probably not be reached this season. The logic continuation for this situation would be an increase in prices, which doesn’t allow a wait and see attitude on U.S. product the coming weeks. We advise to follow the market closely and don’t postpone on both nearby and future positions. Prices from India are slightly different from the other origins. We have seen relatively high prices for light grades in combination with relatively low prices for the amber products. First shipments are booked for the beginning of November, processors are working hard to ship already in October as well.
The prices for Pecannutkernels are just going up a little bit. First new crop shipments are committed and sellers/processors are working for January onwards shipment now.
Hurricane Matthew is a danger for the USA pecannut crop when it would hit the state of Georgia. We will know this middle of next week. When it will hit the state of Georgia (one of the major pecan producing states) this will have an mpact on the crop. If not we expect prices to stabilize for shipments the first 3-5 months for 2017.
Offers are available on request.
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.
The situation in the macadamia market remains unchanged. There is currently a shortage on style 1 and style 2 and this situation is not expected to improve. There is quite some demand in the European market for spot material, but positions are tight. For ingredient grades there are still offers around and buyers are not really in a hurry it seems. The overall outlook is that also for these grades it is recommended to have a look at your positions, because high quality product will be tight. Some South African factories are already done processing for the season as they received way less product. This might have its consequences for total availability later on.
For new crop the first signs are very promising from South Africa. The flowering is exceptional in the Southern and Northern growing areas, but the question is whether the water levels will allow this to turn into nuts. In the Southern area this looks more promising as they had decent rains over the past weeks giving them quite some confidence. The growers in the north are keeping their fingers crossed as the rains are very little and the waterholes still at low levels. We will visit South Africa and Kenya in October again and hope to be able to have a better view on the outlooks.
The market went up during 2016 from levels around Usd 3,35-3,50 per lbs up to Usd 4,10-4,30 per lbs basis FOB (for the main grade WW320). The main reason for this was the shortage of supply added on to the minor quality of the raw seeds. Due to the minor quality of the raw seeds, processing costs were/are increasing and processors are doing concessions to quality to make sure they can fill in their commitments and signed contracts. This execution of border line quality cashewnutkernels is creating more quality issues at destination as packers and industries are not happy and disapproving lots which is causing a continuous demand in the market to fill up gaps.
Another reason was that most buyers in the beginning of the year were expecting the market to ease. At the cashew conference in Dubai in February, a lot of buyers were anticipating on good crops on the Northern Hemisphere giving a boost in supply and kernel prices to come down. The opposite happened and buyers started to enter the market to cover their commitments, pushing prices up.
For a sustainable cashew market this is not goo d. Where we have seen a stable growing consumer demand (4-7% annually), the 2016 prices might disturb this growing curve. We are not seeing this happening right now but as a lot of contracts for 2017 with the supermarkets will be closed during October and November, the consumer will only see the higher prices from January 2017 onwards and consumer demand might be hit than. Packers and industries will be cautious covering their forwards keeping this in mind and that hopefully will help the market a little bit to find his feet. Stable prices are creating growth. The volatile market of 2016 will disturb this stable growth.
On the supply side we have to wait for the Southern Hemisphere crop. Hopefully this will give some relief but so far the prices do not come down yet (keep in mind that Southern Hemisphere crops will only give 20-25% of the total world supply). Tanzania and Mozambique –who together might produce around 200.000 mton of raw seeds are having a growing domestic processing industry (Mozambique will process approx. 50-70% locally in very good factories and Tanzania will process around 20-30% locally). Brazil is not exporting raw seeds so that India and Vietnam for the coming months will mainly depend on Indonesia and Tanzania.
The prices for Indonesian raw seeds are around Usd 2000 per mton (the equivalent of kernels WW320 would be around Usd 4,50-4,70 per lbs) and is not looking promising as there is a lot of demand for those raw seeds.
Tanzanian prices will be known during October/November while Mozambique only will export –although not of impact in the international market- during February/March of next year.
The crops in the Northern Hemisphere will only become available from February onwards until June/July. Hopefully the main producing origins in West Africa and India will have good crops bringing the peace back in the market. (A note to make here is that a number of West African producing origin are working on protection of their own industry with export taxes or other instruments. This is very good for the local African processors but might give pressure on the Indian and Vietnamese processors buying from West Africa!)
On the demand side we have seen an annual growth of 4-7% which is expected to get a hit in 2017. What the impact will be is hard to say as the cashewnut is still a very favourable nut well appreciated by the consumers. Mainly for snacking but also to the interest of the industry. The cashewnut has to compete –especially now and in the near future- with the almonds which came down in price and due to a good crop are not expecting a price increase. Packers are trying to decrease the % of cashewnutkernels in their mixes and fill up with more almonds. The cashewnut industry has to find his way how to handle this but as the producing / processing countries are divided worldwide, generic marketing will not be easy.
Another very important issue the cashew sector has to work on is food safety. A lot of factories are not ready for buyer’s requirements. Supermarket chains and industries are requiring more and more food safety guarantees to avoid claims and black listings. Especially in the US (with Europe expected to follow shortly) the Food Modernization Act is very high on the USDA & FDA agenda. The cashew industry has to be prepared that while now most of the time it is preferred to have HACCP and BRC certified factories, in the not too long future this will become a requirement and packers to be audited accordingly and only approved/certified factories be allowed to deliver certain customers. We are aware that in Europe some supermarket chains are not approving the origin of the nuts but the factory already!
A ‘threat’ for the cashew industry is the mind-set of processors. Are they a processor or are they a trader? To build your market and customer base, you have to understand the requirements of the buyers (not just fill them in!). A processor needs to know why he is doing something to guarantee his specifications and food safety. A lot of small traders turned into processors over the past years (especially in Vietnam) damaging the image of the industry with small factories not qualified to handle food. Those processors expect to get a better return on processing than they had on trading. This is different than a quality minded processors whose goal is to set and build long term relationships with customer who are satisfied with the product he is delivering! A processor needs to earn money but his main goal should be to get the best factory possible to guarantee specifications and food safety!
Our experience of the past 2 decades is that this creates a sustainable business, giving customers the comfort they are looking for and guaranteeing a long term relationship.
The consumption of nuts in Europe is expected to grow as nuts in general (including cashews) are still recommended as a very healthy snack, food and most importantly, replacement of meat. The academic research supported by the International Nut Council is very important to make the consumer aware of the health claims of nuts and they are successful. The only ‘cloud’ on the continuous growth could be the volatility of prices creating uncertainty with packers (who quite easily can replace cashews) but also the R&D departments of industry who usually work on projects which takes months and sometimes years to find his way from the first idea to consumer. When the nut price is volatile, the product can become too expensive and loose interest. Also because of this, a more or less stable market is the only guarantee for a sustainable cashew trade.