The United States Department of Agriculture (USDA) has raised its 2020/21 peanut production forecast for Argentina by 50,000 tonnes to 1.4 million tonnes, a slight increase of less than 1% year-on-year (y-o-y). According to the USDA report, the crop has benefitted from rains in recent weeks. While the growing conditions in the Argentine peanut belt were relatively dry in December and February, above-average precipitation in January boosted crop prospects.
In addition, the Argentinian 2020/21 peanut production area is projected to increase by 10% y-o-y, to 385,600 hectares, according to the Argentina Peanut Chamber. This is marginally below the five-year average of 393,500 hectares.
The Argentinian peanut industry was expected to benefit from the 25% import tariff imposed last year in November by the EU on US shelled and in-shell peanuts. The additional tariff was anticipated to shift some of the EU demand from the US to Argentina. However, the EU and the US agreed last week to suspend the tariff.
The Mintec Benchmark Prices of Argentinian un-blanched 40/50 peanuts delivered on a CIF Rotterdam basis remain relatively unchanged since November last year, at USD 1,550/MT on 5th March, up marginally by 0.3% month-on-month. However, the tariff removal on US peanuts is now expected to exert downward pressure on prices.