The Mintec Benchmark Prices (MBP) of Chinese peanuts, unblanched 40/50, delivered to Rotterdam on a CIF basis, continue to trade at elevated levels, at USD 2,000/MT on 15th January, and selling at a significant premium to other key origins. The MBP for US peanuts CIF Rotterdam increased by 2% in the four-week period to 15th January, to USD 1,430/MT. The Argentinian peanut MBP has been relatively flat since the second week of November, with prices last assessed on 15th January at USD 1,550/MT.
The Chinese peanut MBP is currently tracking 16% above the last year, with prices in 2020 also briefly touching the USD 2,000/MT mark, back in February 2020. Prior to that, the market last traded at these levels in September 2016.
Strong demand by China’s crushing sector, which has seen rising peanut oil prices, has been the primary driver in China’s domestic peanut market, but also affecting other global markets. Chinese wholesale peanut oil prices have moved up by 10% in the twelve months to mid-January 2021, to CNY 25.6/kg. With the Chinese New Year set to commence on 12th February, the demand from the Chinese crushing industry is unlikely to wane, at least in the short term, limiting any downside opportunities.
Trying to meet its high domestic consumption, China has been sourcing heavily from abroad. US peanut exports to China amounted to 286,600 tonnes between January and November 2020, an uplift of 470% y-o-y and significantly above the five-year average. In the first four months of the 2020/21 marketing year (August to November), China imported 76,600 tonnes of US peanuts, up 126% y-o-y.
The industry will now start focusing on the upcoming South American crops. The Argentina Peanut Chamber is estimating the 2020/21 peanut planted area to expand by 10% y-o-y to 385,600 hectares. Conab are anticipating the Brazilian 2020/21 peanut production area to grow to 158,000 hectares, from 153,000 hectares in 2019/20. La Nina will be a factor to watch over the next few months as it generally brings dry weather conditions to parts of South America which could hinder yields.