World production of peanuts is forecast to slip 0.7 percent in 2011-12 after drought reduced the crop in the U.S. and Senegal, causing a shortfall that will require global demand rationing this season, Oil World said.
The harvest of peanuts, or groundnuts, is forecast to decline to 24.8 million metric tons from 25 million tons, on top of “relatively low” carryover stocks, the Hamburg-based oilseed researcher said today in a report.
U.S. prices for peanuts, crushed to make cooking oil and used in Unilever’s Skippy peanut butter and Mars Inc.’s Snickers bars, jumped 49 percent in the past 12 months to 33.7 cents per pound in the week ended Jan. 27, government data show. Peanut butter retail prices jumped 8.6 percent to $2.43 a pound in December from a month earlier, the highest in records dating to 1984, according to the U.S. Bureau of Labor Statistics.
“A severe shortage of groundnuts has developed in recent months for both direct food use and crushing,” Oil World wrote. “World demand will need to be rationed this season after growing steadily in recent years.”
Rotterdam groundnut prices were “firm” at $2,800 a ton on the basis of cost, insurance and freight on Feb. 2, up from $1,580 a ton in January 2011, Oil World said.
Peanut production in Senegal is forecast to slump to 450,000 tons in 2011-12 from 840,000 tons a year earlier, while the U.S. harvest is estimated at 1.24 million tons from 1.41 million tons the previous year, Oil World said.
India’s crop of peanuts is forecast to drop to 3.95 million tons from 4.09 million tons, according to Oil World. The country’s exports of the oilseed will slide to 390,000 tons from 517,000 tons, it said.
China’s groundnut harvest is estimated at 10.5 million tons from 10 million tons, while exports are forecast to gain to 310,000 tons from 307,000 tons in the season through October as domestic consumption climbs.
“In China, the rapid growth of groundnut demand has outpaced domestic production in recent years,” Oil World said. “It took strong price signals from the world market to reverse the downtrend of Chinese exports in the last quarter of 2011.”