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BRAZIL NUT REPORT May 2017

‘’DISASTER
 
My 88 year old father, Terry, who has taken an interest in the machinations of the Brazil nut market all his professional life.
 



Previous Reports
To view the previous reports on Brazil nuts, Almonds, Hazelnuts, Pecans, and hot industry news please click on the link below...

July 2016
The summer doldrums are with us and markets are quiet and slow.The Brexit currency shock has seen prices for brazils  in sterling terms rise precipitously in the past 3 weeks.

November 2015
If sales in the wholesale nut business  are the bell weather for the economy at large then we may soon have more important matters to concern us than the price of Brazil nuts.

September 2014
2014 has been a difficult time for Brazils. Firstly the yearly rains came earlier and heavier and were more persistent  than usual.

August 2013
The Brazil nut crop is very short this year and problems seem to be compounded by shippers defaulting on their contracts.

August 2012
At this point it may be worthwhile reminding ourselves about the price movements for 2011 crop. The low was around $3.20 per lb FOB origin early in the season, rising to a high of around $5.20 during the Autumn.

November 2011
This years season began with much higher than normal prices, then proceeded to rise up to stratospheric levels. Many buyers held back early in the expectation of a massive crop and falling prices from Bolivia.

September 2008
It has been a long cool summer for nut sales.
Cashews prices have felt the chill winds of demand destruction due to over-pricing and more recently an icy blast from the falling purchasing power of the Euro.

February - 2008
Traditionally, this is a quiet time of year for this commodity as the new crop is being collected, transported to the shelling plants and assessed for quality and volume.

August 2007
Like the seas, this market is forever on the move  as the many  factors that drive the price upwards and downwards continuously change.

March 2005
Forward prices have been weak until recently as shippers at origin look to make sales to raise finance for their annual seed purchases

February 2005
This is a market to be brave in. On a forward basis, prices in £ have dropped considerably during the first days of 2005.

November 2004
It is clear that the reason for the current runaway bull market in Brazil kernels is due to greatly increased demand, perhaps 25% on the year.

May 2004
All time highs are being made at the moment as the problems of the past few months start to bite.

March, 2004
Today We see a confused situation with high prices remaining

October, 2003
Prices are steady at the very low levels they have been at for some months...

May 2017

"DISASTER"

My 88 year old father, Terry, who has taken an interest in the machinations of the Brazil nut market all his professional life, has never seen this situation before, so this is at least a one in 65 crop year occurrence, maybe unique, perhaps caused by mankind ourselves.

On a humanitarian basis, lets spare a thought for the Brazil industry workers who live in places like Riberalta, Bolivia and rely completely on the money earned from working in the business. Because there is only less than half a crop, there is increasingly little to do and unemployment is burgeoning. This will cause extreme poverty and social unrest if action is not taken very soon.

On a business level, prices for the tiny amounts that have become available have moved upwards sharply to levels considered impossible in the past. If you can find Whole Brazils, they will be in excess of Sterling 14.5 per kilo ex store. Brokens: 12.50.

This crop disaster has been brought about by severe drought in the rain forest. Firstly there are fewer nuts on the trees, secondly the nuts that were there did not develop normally and thirdly the stem on the ripe nuts did not rot and they did not fall to the forest floor.

As an example: One of our favourite exporters who has five large warehouses for raw material, usually full at this time of year, currently has only one. He will be ceasing his operations for 2017  crop at the end of this month. He has employed  many jungle specialists to scour previously untamed areas for raw material but they have all returned empty handed.

It is normal practice for shellers to sell half of their expected annual production on a forward basis in order to raise funds to pay the collectors for the raw material, however it is now apparent that the pre sold volumes will be difficult to achieve. This means that additional offers on an ongoing basis will be either non-existent or very expensive.

The good news is that the drought has broken and 2018 crop should be normal and very early. High prices will encourage plenty of collection and prices will fall precipitously at some stage. When? Impossible to say.

We do have a very small amount of stock at very high prices. If you are interested,  or if you have any questions, please contact us ‘’

Regards

Tony Ayre

Paragon Commodities Ltd.
Millhouse
31 - 38 East Street

Rochford
Essex
SS4 1DB

Phone: +44 (0) 1702 872494
Mobile: +44 (0) 7710 315837
Email: info@paragoncommodities.com

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