Wednesday, September 3, 2014

"Nut prices, elevated by weather setbacks, 'to stay high'"

From Agrimoney:
It pays to know your nuts.
Grain prices may be in the doldrums, but nut producers are poised high prices for years. 

As long, that is, as they are growing the right type – the so-called "noble" ones, grown on trees, rather than the ground ones, such as peanuts, for which prices are shadowing those of other field crops lower. 

Peanut prices last month averaged $12.30 a hundredweight in the US, down 15.8% year on year, on US Department of Agriculture estimates.

However, prices of almonds, hazlenuts, pistachios and walnuts are up 10% or more.

And, according to Sunny Verghese, chief executive of Olam International - which sold more than 1.5m tonnes of edible nuts and spices in the year to June, taking earnings before interest, tax, depreciation and amortisation (ebitda) of Sing$362m ($290m) – values are poised to remain high.

'Common man's nut'
"Peanuts is a mass nut, common man's nut, it is under price pressure because of excess production and supply," Mr Verghese said, citing in particular the US where growers, looking at record corn and soybean yields, have good production prospects for the nut too.

"We've had a significant growth in crop and therefore availability and supply."

The US is expecting a 22% jump to 5.07bn pounds in peanut production this year.

Rising almond prices
However, for almonds, the USDA estimate for production of 2.1bn pounds is believed to be heading for a downgrade thanks to a lack of rainfall in California, which is responsible for some 80% of world production, but of which 100% is rated by official data as being in drought.

"The subjective estimate of the US Californian crop is is now estimated at between 1.9bn pounds and 1.95bn pounds," Mr Verghese said....MORE
Continuing the Know Your Nuts theme: