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Inshell, kernel prices rise on isolated demand 

April 22, 2024

Prices for assessed Eastern U.S.-variety inshell rose in the global pecan market during the week ending on Monday on two large-volume purchases.   

A U.S. trader bought about a million lbs of Desirable, Stuart, and Excel, the most significant sale volumes recorded for those varieties in recent months. The volume will be shipped to China and another overseas buyer. 

The sales cleared the last Eastern varieties from cold storage. While growers might have a few loads left in cold storage, sources said the remaining volume is negligible.   

“There is pretty much no commercial product left in Georgia,” said the U.S. trader on Friday. 

The trades during the April 15-22 assessment period do not show renewed demand from Chinese buyers, who have expressed that their stocks are full, sources said.  

“This was one customer in particular,” said the U.S. trader on Monday. “It’s not like there’s a lot of action over there. Chinese demand is not there.”  

The movement of Eastern varieties, bought mainly by Chinese buyers earlier in the season, has been slow for the past few months. Previously, the last Stuart trade was reported on March 13, while the last Desirable trade on January 9.    

In other inshell activity, W Wichita and W Schley traded at $3.35/pt FOB Mexico and $3.35/pt FOB Texas, respectively.  

Stratamarkets assessed W Wichita at $3.40/pt CNF Texas, down 25 cents/pt on the week but above its 24-week average. The assessed W Wichita price has only dipped below $3.40/pt CNF Texas twice since February 23. Before then, the price had been below that $3.40/pt CNF Texas level since November 3 of last year.  

There are now an estimated 5-10 million lbs of inshell left in the U.S., and less than 5 million lbs in Mexico, growers estimate. Much of that supply will remain in cold storage until prices rise, several sources predicted. 

Kernel 

The assessed Fancy Jr Mam H price jumped by 16 cents to $4.66/lb FOB Texas on brisker trade as some shellers managed to land higher-priced sales to buyers in Europe and the Middle East.  

The rise in value on the item happened a week after the assessed price fell by 3 cents.  There were five reported sales this week compared to two during the last.  

The assessed Fancy Med Pcs price also rose, climbing 18 cents to $4.63/lb FOB Texas. Fancy Lge Pcs remained flat while Fancy Mam H fell gave up 10 cents.  

Despite the price increases this week, sellers’ sentiment is that demand is lagging compared to earlier this year and the same period last year.   

“The demand has really gone away in the past few weeks,” said one U.S. sheller on Tuesday.  

Demand has slowed in Europe as a weak Euro and high inflation staunch retail sales. Currently, the price of pecans on store shelves in Europe are higher than €10/kg, which has pushed end users toward more less expensive tree nuts.    

“That is a mental barrier for the end user,” one Dutch trader said of the high price on Tuesday.  

With retail sales moving slowly, European buyers feel that they are covered. Those who do need more are waiting until the fall to see if prices drop.     

The range between trade and offer prices was wide on several items as some shellers sold at lower prices to keep money flowing.  

“Some shellers still need to keep the cash flow going, so they are lowering their prices to keep the cash flow coming in,” the U.S. sheller said.  

Sales to Israel, which usually buys many halves from the U.S., have slowed in recent weeks as the country remains embroiled in conflict. While sales to other Middle Eastern countries have remained steady, sellers are finding it harder to ship as freight times have increased to about 70 days – about the double the time as last year- and freight costs have jumped for both dry and refrigerated containers.  

Additionally, some insurers have stopped covering Middle Eastern routes. 

“Our insurance carrier isn’t insuring Israel and Lebanon anymore,” said the U.S. trader. “We don’t have a lot of incentives to sell on those routes. Our product will be out on the water for at least two months, and with the war happening, who knows what can happen.”     

A Mexican sheller confirmed that insurers in that country also no longer cover the rates, prompting sellers to require payment upfront.  

“You have to get cash for it; either that or they have to prepay,” said one Mexican sheller on Monday. “It’s the only way.”    

Meanwhile, the USDA revealed on Monday that it is reallocating the 3.3 million lbs of its 6.2 million lb Section 32 order of pieces that had been up in the air after a company backed out of fulfilling part of the order, sources said.

The lack of movement on the award had made shellers anxious, as they had hoped that sweeping those pieces out of the kernel supply would raise prices.   

South Africa   

Chinese buyers have signaled their interest to start buying South African new crop in earnest next month to restock their supply by midsummer, a grower in South Africa said.  

For now, Chinese buyers have shown little interest in buying from South African because their coffers are still full with U.S. stocks, sources said.  

South African growers reported one more trade to Chinese buyers during the assessment period, but that sale was an anomaly.  

The sale recorded this week was for Wichita inshell with a 58% yield and a nut count of 150 per kilo for $5.20/kg CIF China. That’s in line with the other few sales that the country has sold so far this year for its new crop, which growers plan to begin harvesting in mid-May.