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Kernel prices fall as demand slows

April 8, 2024

Prices for all assessed kernel items fell in the global pecan market during the week ending on Monday as overseas demand stalled and U.S. spot demand wasn’t enough to maintain price levels.   

Fancy Jr Mam H gave up 18 cents during the April 1-8 assessment period, the first time it’s fallen since March 1. Other assessed kernel items lost from 8-22 cents.   

Driving the move: Buyers are inquiring for halves and pieces but have largely refrained from booking, prompting some sellers to lower offers to conclude deals.  

“I’ve done a couple of quotes, but they are not ready to book yet,” a U.S. broker said on Thursday. “It is not a super active market.” 

Also, buyers who booked longer-term contracts earlier in the year are returning to the spot market to top up. However, they’re bidding at price levels that are lower than previously booked contracts and appear unwilling to negotiate. Some sellers are obliging, sources said.   

Tell me more: Fancy Med Pcs led the decline in kernel prices, falling 22 cents during the period. The item traded at $4.50/lb FAS Houston and $4.75/lb El Paso. At the close, it was offered multiple times at lower levels.  

Fancy Jr Mam H traded twice during the period at $4.55/lb CIF Naples and $4.75 CFR Sur Met. The item was offered at $4.70/lb FOB Texas.  

Fancy Mam H also traded twice at $4.78/lb CIF Middle East and $4.65/lb FAS Houston. The item was assessed at $4.59/lb FOB Texas, down 8 cents.    

Go deeper: The declines came amid reports of strong shipments of previously booked pecan kernels.  

A U.S. sheller said his company was up 8-10% on shipments compared to the same period last year. With previous commitments high and current demand scarce, shellers turned their attentions toward fulfilling their existing contracts. Some have stopped offering for the moment.  

“We are under the gun just to fulfill our current contracts and orders,” a second U.S. sheller said on Monday. “We won’t come back on the market until we have more inventory built.” 

North America-origin inshell       

Inshell pecan trade remained slow during the period, with only two recorded sales of W Schley for $3.30/pt FOB Mexico and no trades for W Wichita. Stratamarkets assessed W Wichita unchanged at $3.40/pt CNF Texas. 

The price of W Wichita has been steadily rising for the past several weeks, with only a couple of sporadic weeks of decline.  After peaking at $3.49/pt CNF Texas on November 3, the price fell sharply to $3.28/pt CNF Texas the following week and hit a crop-year low of $3.13/pt CNF Texas on December 8. The price has now remained above $3.30/pt CNF Texas since February 16.

The assessed W Wichita price climbed as demand surged throughout the late winter and early spring due to shellers needing material to fill kernel contracts. Demand from China also bolstered inshell prices. 

The Fancy Jr Mam H premium to W Wichita settled at $1.13 on Monday, a contraction of 18 cents from last week due to the Fancy Jr Mam H price decline.

South Africa  

Growers in South Africa made a few more trades of Wichita-variety inshell to Chinese buyers last week but described demand as slow. Chinese warehouses are still full of U.S. product purchases in the fall and winter, sources said. 

“China is buying a few volumes here and there,” said one South African grower. “They are not buying a lot of big volumes.”   

South Africa-origin Wichita traded at $5.60/kg for a 58% meat yield and 110 count/kg, $5.00/kg for the same meat yield but 160 count/kg, and $5.20/kg for the same yield but 130 count/kg.  

South African growers plan to start harvesting in late May and sending out shipments in late June.   

This year’s South African crop could be close to 35,000 tons, according to sources. By comparison, the country’s 2023 crop was 22,000 tons. 

Look ahead  In North America, market participants are awaiting the pecan tree bloom, which should start in the coming weeks and will give clues on the size and quality of the region’s 2024 crop.