Brazil Nut Crisis
Nut news from around the world!
B R A Z I L KERNELS October 2004
The Market from origin is very quiet, with virtually no sellers,
maybe a few who decide to sell containers they already owe to other buyers.
Prices REACHING levels around £5,100 PMT OR Us$ 3,95 to $ 4.05 per lb FOB for shipment
New crop prices at £ 3,500 TO £ 3,600 OR Us$ 2,75 to $2.85 per lb FOB.
Buyers are reluctant & prefer to wait as long as they can, of course there are others who consider the price differential for New Crop a big discount from present levels.
Uncertainty about future price development is the main reason why shippers as well as traders are also reluctant for the time being. Most of them are just trying to fulfill current obligations !! This is proving to be difficult for some of them.
This year has been the worst I have seen in 33 years,
shipments are always delayed by poor weather conditions at origin, roads blocked heavy rains usual each year, civil commotions, strikes every day life.
Some reasons for such a terrible firm market>>
The crop was late!, there was no carry over so the world demand was greater than goods being available on spot
The road, conditions delayed shipments, followed by crackers strikes, When the Crackers went back to work the roads were then blocked. Some trucks were stuck between Riberalta & La Paz/ Arica Chile for 3 4 weeks, after all this then the container port went on strike, in the mean time previous shipment were unable to fill the pipeline & consumers around the world were desperate for deliveries which forced up prices even further.
Recent Hurricanes < Four > have had a terrible further effect on shortage of global supplies, many shipments still pending & containers desperately awaited by the industry, yet again the pipeline unable to fill, still xmas day we will eat & drink & not have another thought about all of this !!!!!
Origin still claims the crop to be short I am not so sure, as you know in my previous report when I came back from South America I felt the situation was forcing prices up.
On the other hand, had there been a really good crop, surely shippers would have been ready to take advantage of the crazy price rise & to sell, this has never been the case, many containers that have been sold to us, we are sure must be containers that were due to other buyers, some shippers requested a price increase on their contracts in order to avoid them going broke, as they were claiming they had to pay more money for the raw material, they had already advanced money for in the interior this is common, you pay up front & with such a price rise many people re-sold the goods thy had already sold & had already been paid for! honour amongst thieves, we are still owed substantial quantities, which we know we will not get, in the mean time we are forced to deliver goods to our buyers, we have had to buy what we could when we could & at prices much much higher than the selling price, the market has seen a difference of some 250% in price, this will cause major problems around the world to many importers & buyers. This year is unlike any year ever seen before in this industry.
As I said before I can only say that most commodities seem to be going limit up, like hazels Pecans & brazils having doubled in price, cashews sharp rises, there certainly seems to be dramatic increases in nut consumption, maybe the world has seen the benefits of nuts & dried fruits being a good & healthy food.
I guess if we look at the new members of the Eu like Latvia, Slovenia, Poland, then of course China a booming economy with such massive demand for Nuts & dried fruits alone slowly coming to the markets maybe their economies will grow & in turn we must change our minds as to real levels & prices of nuts & dried fruits, who knows maybe this is the future & we will have to get used to it.
Thanks for your time, patience & indeed understanding in these terribly difficult times.
Regards Tony Farndell
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