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Inshell prices rise on improved international demand

January 5, 2024

Assessed inshell items rose in the global pecan market during the week ending on Friday due to demand from shellers and sustained buying from China.  

Buyers in China continued to purchase inshell from Georgia and Mexico during the Dec. 30, 2023, to Jan. 5, 2024, assessment period even though the window for material reaching the country in time for their New Year celebrations has passed. The Lunar Near Year celebrations start Feb. 10. 

Sales to China of Eastern U.S.-variety inshell – ranging from the ubiquitous Desirables and Stuarts to less common types such as Cape Fear and Sumner – ranged from $3.52-$3.69/pt FOB Georgia. 

Stratamarkets assessed Desirable at $3.54/pt FOB Georgia and Stuart at $3.61/pt FOB Georgia. The assessed Desirable price is up 21 cents from last week, and the Stuart price is up 43 cents. 

So far, Georgia has sold about 83 million lbs of the state’s estimated 93 million lb crop, with the vast majority of that going to China, growers in the state said on Tuesday.

While some U.S. inshell sellers had predicted that demand from China would wane during the month of December, sales to that country continue to be strong, mainly for spot volumes. 

“I’m still seeing a lot of activity out of China at the same level they’ve been at all year,” a U.S. grower and sheller said on Thursday. “China is still very much interested.”  

Prices for sheller-grade inshell items also increased on the week as shellers stocked up on material to crack into kernel. Inshell trade among shellers was active.

Stratamarkets assessed W Wichita, a blend typically purchased by shellers, at $3.25/pt delivered Texas, up 6 cents/pt on the week, based on a trade at that level for Mexico-origin W Schley.

Some westerns also headed to China, with some Mexican growers booking large contract sales to the country. One Mexican grower sold four loads of W Wichita to a Chinese buyer for $2.03/lb FOB Mexico. That material will ship in February. 

Meanwhile, many processors are still waiting for the harvest in Mexico and New Mexico to proceed so they can get more material shipped to them to shell and sell as kernel. While the Mexico harvest is moving along, the already-late harvest in New Mexico has been hampered by bad weather over the past week.  

“We are starting to look for our future needs,” a U.S. sheller said on Tuesday. “We’re waiting on some indications from some of the people we normally buy from. It doesn’t look like many people have much available just yet.”

Kernel

A U.S.-based food distributor completed a kernel tender of more than 2.6 million lbs, sources familiar with the purchase said. Prices for halves and pieces in the purchase order sold in the range of $3.90-$4.20/lb FOB Texas, far below current spot levels. Many sellers expressed concern that it could pull down spot prices in the weeks ahead.

The assessed Fancy Jr Mam H price lost 6 cents during the period, falling to $4.52/lb FOB Texas in its second consecutive weekly drop. The item was offered from $4.50-$4.60/lb FOB Texas but no trades were reported. However, Fancy Mam H traded at $4.75/lb CIF Aqaba. Fancy Mam H typically trades at parity or a 5-cent premium to Fancy Jr Mam H.

Pieces prices rose during the period. Stratamarkets assessed Fancy Med Pcs at $4.62/lb FOB Texas, up 13 cents. Fancy Lg Pcs jumped 31 cents to $4.60/lb FOB Texas.

Some Middle Eastern buyers who had previously held off on making purchases have now stepped up their buying as they realize that both general prices and freight are going up, pushing overall purchase prices significantly higher, sources said.

Recent maritime attacks by Houthi rebels on vessels passing through the Red Sea off the coast of Yemen and the threat of more in the future have pushed freight costs from the area from 15 cents a pound to more than 20 cents, said pecan exporters. 

“Buyers are realizing that the prices are going up, not just because the market is going up in general, but because freight is going up so much, especially in the Middle East,” a U.S. trader said on Friday. 

While buyers in the Middle East are desperately purchasing, they aren’t contracting for as much as they did last year at this time, since the continued conflicts in the Middle East and Eastern Europe have created a big question around near-term demand in those regions. 

“We’re not sure how much they’re going to purchase,” the U.S. trader said. “They aren’t covering as much because of the war, and they are not sure how much demand they will have.”