After several challenging years for Brazil nut processors - which saw crop failures in 2017 lead to staggering prices, which eventually reduced demand and left producers with a large overhang of stock - the factories are now left with little money to invest into this year’s collections. “All of this resulted in producers being short in cash this harvest, making crop collection difficult”, according to a global Brazil nut trader. “Indeed, the market is quite challenging this year as factories and collectors continue to negotiate on the new raw material price” the trader continued as the Mintec Reference Price for shelled Brazil nuts delivered to the EU stood at $6.39/kg in mid-January, down from $9.22/kg in April last year and $20.68/kg at the peak of the Brazil nut price spike in May 2017.
Market participants are expecting prices to remain stable for now as the limited supply is currently also met with limited demand. Raw materials are unlikely to come down any lower, as they are already too low. However, factories cannot survive at these price levels, so they would rather stop selling Brazil nuts. Some of the sellers are anticipated to remain idle than operate at a loss.