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Peanut market update: US prices hold firm, Argentinian and Brazilian prices slide, Nestle to buy Aimmune Therapeutics

September 4, 2020

1 mins read

The US peanut harvest is about to start and the size of the 2020/21 crop is generally looking good. Earlier in August, the USDA estimated the 2020/21 peanut production at 6.21 billion pounds (2.82 million tonnes), 13% more than last year and up 4% on the five-year average. The average yield is forecast at 4,218 pounds per acre, up 7% y-o-y. However, some industry participants are a bit more cautious, anticipating this year’s yield closer to 4,000 pounds per acre, owing to unfavourable dry conditions in parts of the US peanut belt.

Nonetheless, the higher supply availability is expected to have an easing effect on pricing as harvest gets fully underway in the next few weeks. While European prices for the scarce US stock remain at elevated levels, with the Mintec Benchmark Price (MBP) of US peanuts un-blanched 40/50 CIF Rotterdam sitting at $2,000/MT as of 26th August, up 63% y-o-y, industry sources have suggested to Mintec that prices will move significantly lower, with one source offering $1,450/MT for December delivery.

The Argentinian peanut MBP un-blanched 40/50 CIF Rotterdam was last assessed on 26th August at $1,330/MT, down 4% m-o-m but steady y-o-y. The Brazilian peanut MBP 40/50 CIF Rotterdam fell 6% in the four weeks to 26th August, to $1,300/MT, down 5% y-o-y and 14% q-o-q.

In other news, Nestle has recently announced that it is to acquire a biotech company Aimmune Therapeutics, Inc. in a deal worth $2.6 billion, with the transaction expected to be completed in the fourth quarter of 2020. Aimmune makes an immunotherapy Palforzia used in peanut allergy treatment. It is presently the only FDA (US Food and Drug Administration) approved drug to help reduce the frequency and severity of allergic reactions to peanuts in children. While this is good news for allergy sufferers, there is currently no indication that this acquisition will significantly impact the peanut market going forward.

Jara Zicha
Jara Zicha

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