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Peanut production losses in Argentina are steering the world

Peanut Market News March 22, 2018

Peanut production losses in Argentina are steering the world's peanut demand to Brazil & USA

There were no weather changes that would cause a relief to the historic drought that a large part of Argentina suffers from, and it includes the entire central peanut area.

Under this situation of extreme water stress, aggravated by the effect of the winds, the cultivars condition continues its continuous deterioration day by day.

Weather outlook

The climatologist Eduardo sierra commented that there will not be a rainy season that improves the drought critical situation that has been affecting since the end of spring.

"The interior of Argentina will continue being punished."

The next season will be affected by a phenomenon "la niña", which will boost the water shortage situation that was observed in the current season.

The "letal" combo for the argentine production was that the "cold" pacific, which normally causes "la niña", did not have its counterweight in a "hot" Atlantic, which usually compensates for the lower rainfall regime.

That cooling of the Atlantic is what explains the severe drought.

The lack of moisture that began at the end of November was manifested "abruptly". 

After five "humid" years, what happened in this season "was one of the most abrupt climate changes in history.

The years of high impact on drought matters are those that have a dry February, but it is a "very unpredictable phenomenon, although it is more or less foreseeable.

Outlook

On what is coming, Eduardo sierra mentioned that the central are of Argentina; basically the central-west of buenos aires, north of la pampa and córdoba, they would not have a recovery of the humidity in the coming months. "the interior of Argentina will continue being punished; it is difficult for the situation to improve."

This is strengthened by taking into account that:

- The consensus forecasts indicate a high probability that la niña will be present again from July.

- This weather forecast would affect the peanut crop in the U.S. And in Central America.

- What is happening now may be the anticipation that five dry years would come.

World peanut market

From a buyers market, which was maintained for several months, now it was passed to a sellers market, mainly in the European union (EU specs)

The origins of Argentina & Brazil are withdrawn from the world edible peanut market until concrete and official data of the hectares lost, reduction of yields and production in Argentina are obtained, as an effect of the severe and continuous drought occurred in the argentine origin

La niña and the severe drought in Argentina will mark the rhythm of the world peanut market. The uncertainty regarding the peanut harvest achieved by argentina, seriously affected by the extension of the drought, it is "the great doubt that the world peanut market has ", since "today there is no idea of what the final production will be " 

The final number of  the peanut harvest of Argentina "will not be known until the digging and harvesting machines enter in each lot"

Due to the severity of the drought, which occurred during February and it continues until the date (march 21), the argentine origin is withdrawn from the market for its 2017 old crop and 2018 new crop.

Brazil, which is full devoted to the harvesting task has also completely withdrawn from the market until it finishes harvesting (estimated around mid-april) and it is also known about the quantity of production reduction in Argentina.

The origin of the United States, is the only one that has available stocks of edible peanut out of the 2017 crop, in conditions to supply the European union market (EU specs). Peanut production losses in Argentina are steering more of the world’s peanut demand to Brazil & USA. 

Source: Andrés h. "hari" georgalos (Georgalos peanut world)

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