Due to the geopolitical conflict between Russia and Ukraine, there was a significant hike in demand for peanuts in the domestic market. This was due to the limited import of sunflower oil due to the war. As a result, the Indian market interchanged the sunflower oil with peanut and rice bran oil.
The uptick for the peanut market in India will continue in the future as the peanut producers and suppliers of the country can take part in supporting the international demand for the crop too.
There will be a stable demand for the crop in the future in the domestic market. However, due to the war, export opportunity is limited. But currently, that has not affected the stability in the price as it continued to be the same.
According to reports, the overall consumption pattern was less than last year. Furthermore, the export to China is low, and the E.U and the U.K. have decreased their demand for dry fruit.
All these factors can eventually affect the crop price in the country and reduce the sowing of the crop for the upcoming season.
The current crop is of excellent quality, with aflatoxin levels relatively lower than last year.
The country experienced the much-needed rainfall for peanut growth after it experienced a dry spell. Like other peanut-producing countries, Argentina is experiencing low export demand from China and Europe.
The tax on raw peanuts is reduced to 4.5% from 7%, and for blanched peanuts, it is now 3% from 7%. This will give a competitive edge to the producers.
According to market experts, Brazil will have 10 percent more crop output. The weather in Sau Paulo favored the peanut growth. Despite regions like Parana and Matto Grosso do Sul didn’t receive enough rainfall, the overall production is expected to be good.
The new crop harvesting started in February and was expected to be in a full-swing in March.
But with a better harvest, the market can come under pressure in Brazil with limited export demand. Russia and Algeria contribute 60% to the Brazilian peanut export, but both countries are silent now with their order. Moreover, Russia is reported to be overstocked; hence there will be limited buying until summer.
With an improvement in the domestic demand for the product, the market can go into a bullish mode from March onwards. Unlike the last quarter, the local purchase has improved and is expected to be better in the coming days.
Also, the increase in the peanut oil price, like other edible oil prices, is expected to support the market in the future. However, the import of the peanut is still low, and the current spot market prices remain lower than the import rates.
The future demand will shape the import and the overall price of peanuts.
Despite there being plenty of stock at a reasonable price, the demand for shipment is less. The factors that led to the limited shipment of Sudanese peanuts are the shortage of containers, a hike in the freight prices, and the war.
Currently, the country’s farmers sell the crop for between $0.85 and $0.90 per kg in the local market.
The domestic demand for peanuts supports the market while the export demand is low by 30 to 40 percent. The current price of the commodity in the local market is $1,45 per kg.
The lack of demand for peanuts from China has affected the Senegalese market. As a result, most of the product is sent to local crushers.
Most countries in Asia, like the Philippines, Indonesia, and Vietnam, still have their old stock; hence they are deterred from placing new orders. The peanut price increases with the demand for peanut oil since there is a limited supply of sunflower oil in the region due to the war.