ARGENTINE & WORLD PEANUT MARKET REPORT as at January 13, 2013
GEORGALOS PEANUT WORLD

January 13, 2013

ARGENTINE PEANUT REPORT

DEVELOPMENT OF THE 2013/2014 PEANUT CROP: Our Agronomist Juan Soave and J Alberto "Chatin" Moresi reported that during the week from January 6 to 12, it did not rain in most of the central peanut region of Argentina.

The period began with very hot weather, and a weak disturbance between Wednesday 8 and Thursday 9 caused some increase in cloudiness, left some very isolated precipitations of poor millimeters, mainly towards the north and northeast of the central peanut region of Argentina and left a moderate decrease in the minimum temperatures (13-15 C). Although the maximum temperatures did not reach the values that had been being registered, the same ones remained above 30 C.

Most of the central peanut area of Argentina is still under the effects of a persistent drought that remains almost paralyzed the growth and development of peanuts.

During the week, we have been able to appreciate a better general condition of the peanuts in, what we call, the centre and north zone, in which there were during the last 20 - 40 days better rain registrations and therefore the peanut plants show a steadier progress. It can be appreciated the flowers production and the peanut plants are between beginning of pegging and beginning of pods formation. Towards the south (south zone of our map), there are sectors where the peanut plants show flowers production but without pegging production. There are areas within the region referred to, where it has rained very little during all December and January so far, so it is virtually stopped the flowers production too.Farmers continued paying attention to their peanut plants, trying to make those most essential tasks, plagues control (weeds and insects). In the most damaged zones due to the drought, the progress of the spiders remains being the main concern, although it is worth mentioning that mainly the central and south zone of the central peanut area of Argentina is having major problems with the presence of weeds resistant to certain herbicides groups; a case to mention is that of species of the Amaranthus type (red weed), which is complicated due to the difficulties to be controlled as well as to the increased production costs.

CENTRAL PEANUT REGION OF ARGENTINA

Some peanut producers located in zones with more favorable rain registrations during December mainly (there are zones towards the center-north of the central peanut region of Argentina, where there were rains that exceeded the 150 to 200 millimeters in December), surely have made or will be about to make the first applications against foliar diseases (leaf spot).

Peanut situation in the provinces of Cordoba, La Pampa and San Luis –

2013 - 2014 SEASON- December 2013

As a result of the surveys done by the Cereals Board of Cordoba to peanut producing collaborators who produce in the provinces of Cordoba, La Pampa and San Luis, the Cereals Board of Cordoba estimates a planted area of 341,507 hectares which represents a decrease of 46,358 hectares (12% lower than in the 2012/13 season).

2013/2014 PEANUT PLANTING ESTIMATE

The Ministry of Agriculture of the Nation estimates a peanut planting area at country level of 392,860 hectares in the 2013/14 season, registering a decrease of 6.4% compared to the 418,063 hectares planted in the 2012/13 season. (See planting details per province in Peanut Planting Progress as at January 9, 2014 )

There is a substantial difference between the peanut planting estimate by the Ministry of Agriculture of the Nation and the Cereals Board of Cordoba, regarding the peanut planted area in the Province of Cordoba.

The Ministry of Agriculture of the Nation projects an area of 353,100 hectares (2012/2013 season - 371,300) and the Cereals Board of Cordoba projects an area of 313,610 hectares (2012/2013 season - 351,841).

Regarding the rains, in the period October-November 2013, in peanut producing departments, the rain millimeter was lower compared to 2012’s and the same one was concentrated in November, leading in some areas as Arroyo Cabral, Palestine, Ticino (department General San Martin ) and Suco (department Rio Cuarto) delay in the planting date due to lack of rains.

General condition of the peanut in Cordoba, December 2013

The 58% of the peanut area was planted in October, the 40% in November and the remaining 2% in December.

As for the phenological state, the lots planted in October are through the first reproductive stages (R1: beginning of flowering).

The 50% of the peanut area in Cordoba was reported to be between an excellent and very good general condition.

Regarding the peanut health condition, and it was reported the presence of locusts of low to medium incidence.

According to surveys of the network of weather stations and zonal collaborators, the following graph shows the climatic variables of gathered rainfall and maximum temperatures, which the peanut went through in December.

Source: Department of Agro-Economic Information – Cereals Board of Cordoba

ESTIMATES: The INTA General Cabrera reported that in that region, there have been very good rains during December, allowing the normal development of the summer cultivars.

Unfortunately, although the rains have been abundant, the same ones were not widespread, so that there are areas in which rains of very short-term are needed to get good cultivars.

The period of 20 days without rains between December 8 and 27 plus the high daily temperatures harmed the plants.

The peanut plants, showing its characteristic of subtropical cultivar, made good use of the rainfalls and temperature to have an optimal growth and development in the area of General Cabrera. (See photos of the peanut planted on November 15).

The weather outlook provided by the National Weather Service is not positive to the south of the province of Cordoba, which if met could have an adverse effect on great part of the peanut area.

According to the National Weather Service, the soils of the peanut region are from good state in the north to beginning of drought in the south.

Condition of the peanut planted on November 15 in General Cabrera



WORLD PEANUT MARKET

IT IS PROJECTED A BEARISH TREND FOR THE 2014 USA CROP, since the "Shellers" indicated to the "Buying Points" a level of USD 425 per short ton for in shell Runner peanut of the 2014 peanut crop.

The general expectation in the North American Origin is that the peanut planting area increases in 2014, considering the income margins comparative with other cultivars such as cotton, corn and soya.

The BEARISH TREND generated by the value indicated to "farmers" is also linked to the carryover from the 2012 crop that has just been finished being shelled at the end of December 2013 and still has to be given a commercial use.

To the carryover from the 2012 crop, it has been added the production of the 2013 crop, which exceeded the previous forecasts and now the USDA’s final estimate has reached the 2,087,090 short tons of in shell peanut (7% more than the previous forecast).

EU SPECS Market: The U.S., using an aggressive marketing strategy in all the markets, having reduced further its quotation level, registers the most competitive level for Raw Edible Runner 40/50 (Medium), which quotes in range between USD/MT. 1,280 & 1,320 C&F WEMP.

Although with less prestige for its background, INDIA is also involved with its supplies in this market (EU SPECS), quoting at USD/MT. 1,250 CIF WEMP for its Bold Raw peanut 40/50

The Argentine origin, under the aggression and the level offered by the U.S., remained circumscribed only to those manufacturers from the EUROPEAN UNION who only buy Argentine peanut Origin due to its characteristics of taste, quality, quantity and continuity, which for the time being do not divert their procurement to U.S. (ex leader in this market).

NON EU SPECS Markets: INDIA is the most competitive origin in the markets price.

INDIA quotes in the lowest band of the world Edible Peanut Market its Raw Bold Type peanut 40/50, which orientate level quotes around USD/MT. 1,080 C&F (which varies according to the freight to the destination country and the quality specifications of each buyer), with shipment in January / February 2014.

WORLD PEANUT SITUATION

THE WORLD PEANUT MARKET HAS A SPREAD OF PRICES ACCORDING TO QUALITY SPECIFICATION AND ORIGINS

USA

BEARISH TENDENCY for 2014 U.S. Peanut Crop

Quoted at US$ 425 per short ton total Option contract for 2014 runner type peanuts

U.S FINAL Peanut Production is estimated by the USDA at 4.17 billion pounds, up 7 percent from the previous forecast but down 38 percent from 2012.

Planted area is estimated at 1.07 million acres while area harvested is estimated at 1.04 million acres.

Planted and harvested acres are both down 35 percent from the previous crop year.

Average yield is estimated at 4,006 pounds per acre, up 219 pounds from the previous forecast but down 211 pounds from 2012.

There are a lot of peanuts pent up in the U.S. pipeline today.

With two crops (2012 & 2013) pretty good back-to-back peanut production years -- 2012 being a record buster -- it is going to take a while to work through the supply and get farmer prices back up again.

Consequently, option contract prices went DOWN to US$ 425 per short ton for 2014 runner type peanuts.

CHINA

The domestic peanut prices vulnerable to drop, local area fell by 0.05-0.15 Yuan/kg; buyers purchase with caution, and only a small amount.

Market weakness in consumer and overall trading volumes remained low. At the same time peanut oil prices down again, to further drive down the market price is not optimistic.

INDIA

The Commission for Agricultural Costs and Prices (CACP) has asked the National Agricultural Cooperative Marketing Federation of India (Nafed) to increase the volume of groundnut procurement by buying more quantity of the commodity from farmers so that market prices do not decline further.

Groundnut market prices are still ruling below the minimum support price (MSP) despite Nafed procuring more than 1.1 lakh tonne of the nut from farmers, mostly in Gujarat and Rajasthan, under the price support scheme in the last one month.

According to data, groundnut prices in various markets of Gujarat are presently around R3,200 per quintal while in Rajasthan they are around R3,000 per quintal against the MSP of R4,000 per quintal.

The beleaguered agri-procurement agency, National Agricultural Cooperative Marketing Federation (NAFED) is in a precarious financial position.

The Cooperative is facing a debt of around Rs 2,000 crore debt.

"The situation has come to such a pass that the cooperative is literally on the verge of closure.

India, the world's leading buyer of edible oils, has increased the import duty on refined edible oil. On Thursday, the Cabinet Committee on Economic Affairs (CCEA) considered the proposal to raise duty to 10 per cent giving support to the domestic industry and farmers.

GEORGALOS PEANUT WORLD

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