The world is poised for a peanut revolution as nearly 42 million metric tons (MMT) of fresh harvest flood the market. Big producers are contributing 8% more this time. What can we anticipate from this peanut bonanza?

Harvest & Festivities

The global harvest season is in full swing, creating a festive atmosphere in peanut-producing regions worldwide. Harvests are kicking off, and this trend will persist throughout the year's remainder. Initial field assessments indicate robust peanut crops in most areas except Sudan. The outcome of the 2024 market will significantly hinge on how prices and demand respond to this influx of peanuts. Fortunately, favorable weather conditions have graced the season thus far, further brightening the harvest outlook.

The world's major peanut producers, including India, China, Indonesia, Sudan, Senegal, Vietnam, Nigeria, Egypt, Myanmar, and the United States of America, are poised to yield approximately 43 MMT of peanuts collectively. This represents 83% of global peanut production, a significant increase from the previous year's 41 MMT.

Global Scenario

India

Talking about India, in the peanuts-producing hub, winter peanut harvest has begun in Gujarat, with 10% completed. Crop down by 12% due to late rains, causing a price drop. The yield is for 100% domestic use; export demand will rise by the end of October. Furthermore, unseasonal rain impacts crops; strong local consumption is driven by Telangana demand. Tamil Nadu's peanut crop is nearly done; Madhya Pradesh's crop looks excellent.

USA

In the USA, production is up 500k tons; harsh weather reduces yield to 4.43 tons/ha. Demand grows with lower stocks.

Brazil

Brazil's 2023 crop shipments are at their peak, with oil shipments losing ground to China's new crop. Priced at $1650, Brazil's peanuts are going to Russia. While nearly 196k tons were shipped until August, oil shipments reduced by 24%. If weather permits, farmers are interested in cultivating more peanuts than soy during the 2023 cropping season.

China

Despite an unexpected surplus of 20-30%, the arrivals of the new crop in China have been significantly higher. Consequently, prices across all market tiers have experienced a substantial drop, plummeting by 200-300/ton.

What to Expect?

India and China, accounting for 52% of global peanut production, coupled with favorable weather conditions and reduced demand due to inflationary pressures, are expected to drive a substantial decline in international peanut prices from November to December. The resilience displayed by these two major producing regions in managing their domestic demand will be the critical determinant of price trends in the upcoming months.

Conclusion

In summary, the 2023 peanut harvest season, marked by an 8% production increase, brings about 42 million metric tons globally. Despite Sudan's challenges, a festive atmosphere prevails. The outcome in 2024 hinges on price and demand dynamics, influenced by favorable weather conditions. India and China's roles are pivotal, potentially driving international peanut price declines amidst reduced demand. The industry anticipates exciting changes with heightened production and shifting market dynamics.