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Can the peanut consumption rate keep pace with its price?

Published on 03/03/2023 in Peanut Market News

Explore the global consumption of peanuts & its fluctuating prices in recent years. Discover whether the demand for this beloved nut can continue to meet the pace of its popularity

Peanuts are produced, manufactured, and consumed in large quantities by people all over the world. Whether as peanut butter, chilli-flavoured snacks, as oil, or in cakes, bakes, or brownies, they’re fast becoming one of the most popular ingredients around. Even conservative estimates expect global cultivation to hit 68 million tons by 2050, according to the UN’s Food and Agriculture Organization.

But with plenty of other nuts to choose from and new peanut products hitting the market such as cold-pressed peanut oil and refined flours, how has consumption changed in recent years? And, crucially, what impact has that had on global prices for farmers, manufacturers, traders, and consumers?

In this article, we’ll take a look at the macroeconomic factors that have triggered significant changes in the peanut trade, explore how they relate to other nuts, seeds, and derivative oils, and take a view as to the relationship between peanut prices and peanut consumption. As we’ll discover, all is not as it seems.

Let’s crack on.

Money money money: What’s been happening in peanut price trends around the world?In 2022, many expected peanut prices to fluctuate dramatically, given the impact of numerous global economic shocks and our continued recovery from the COVID-19 pandemic. However, that was not the case, and global peanut prices have instead remained remarkably stable. In part, this is thanks to rising global production that has kept the market well supplied. Indeed, the average Runner peanut seed price on the key Rotterdam exchange (CIF; US Runners 40/50%, shelled basis) amounted to $1,525 per ton in January 2022. This is almost identical to the price a year earlier in January 2021.

[Suggested graphic: peanut price received graph, example below from source:]

Generally speaking, peanut prices have risen fairly steadily over the past three decades, despite the impact of a few periods of more dramatic economic fluctuations.

Demand for key peanut products has also shown a healthy overall trend of growth, with similar shock price rises in 2008 and 2012, but later recovering to a more nominal rate of growth. By the end of 2022, the baseline price for peanut oil on the Rotterdam exchange was $2,150 per metric ton.

Peanut consumption over the years
Our global appetite for peanuts also shows little sign of diminishing, with consumption on the rise in most of the world. This year, the world’s peanut seed output is set to reach a record 50.7 million tonnes, increasing by 2.3% year on year. Global peanut import volumes grew by an astonishing 12% between 2017-2021, fuelled by an abnormally large 58% import increase in China over that period.

Over the same period, Argentinian exports grew by a massive 52%, representing 19.4% of total global peanut exports. India followed a close second in 2021 with 16.3% of global peanut exports, followed by the US on 11.6% and Sudan on 11.5%.

In total, 4,414,927 thousand dollars’ worth of peanuts were imported globally in 2021, up from 937,169 thousand dollars in 2002 and 2,936,889 thousand US dollars in 2012. In just two decades, that’s a significant increase in spending on peanut-related products.

The years affected by the COVID-19 pandemic unsurprisingly showed significant variation in import and export trends. The US, for example, registered a 41% increase in exports between 2019-20, immediately followed by a 29% decline in exports between 2020-21.
Similarly, US imports grew by 10% between 2019-20 and then fell by 57% between 2020-21, reflecting a switched focus on domestic production and consumption during those years – and a pulling away from the international market.

Whilst China similarly experienced a significant shift, much of which can be attributed to its COVID-19 recovery and the return of trade balances to a more normal position, in truth increased Chinese imports do reflect a rapidly accelerating trend over the past few years.

More recently, US peanut production has dropped in the past year, with the 639,490 hectares planted in 2021 falling to 590,480. This fall, however, reflects similar annual variation across oilseeds and nuts in general.

Competing nuts and their price and consumption trends
When compared with other nuts and oilseeds, peanut prices are thrown into a stark new light.

The price of US soybeans, for example, has risen much more dramatically, experiencing a threefold price rise over a similar period.