The Chinese peanut market in January 2025 remains marked by mixed trends across the edible, export, and crushing segments. Here’s a detailed analysis of the current situation and outlook.
Edible Market
The local edible peanut market experienced a brief recovery in late November and early December 2024, as some customers returned to the market. However, this momentum was short-lived, with activity slowing down again by mid-December.
Lunar New Year Sales: Traditionally, the Lunar New Year period boosts sales significantly, but this year, dealers are expressing cautious optimism, with many less confident in achieving the sales boom seen in previous years. Narrowing margins are also a concern for those catering to the domestic market.
Snack Food Demand: On a positive note, demand for affordable snack foods and dried fruits remains resilient. Some industry players even predict that turnover in this segment could increase, driven by consumers seeking cost-effective alternatives amid economic challenges.
Export Market
The export market presents a challenging landscape, influenced by raw material costs, currency fluctuations, and freight dynamics.
Pricing Pressure: Raw material prices are hovering near farmers’ breakeven point, but weak demand and a depreciating Chinese currency have pushed some prices lower than U.S. levels.
Freight Costs: Shipping costs, which were firm throughout November, have started to decline. Transshipment rates have dropped from over USD 3,500/TEU to USD 2,500–2,700/TEU for Europe-Middle East Ports (EMP). However, rates for fast vessels like EverGreen and COSCO remain elevated at over USD 3,100/TEU.
Contract Pressures: Shipping companies are reportedly urging forwarding agents to lock in annual or six-month contracts by December’s end, reflecting ongoing market uncertainties.
The crushing market has shown some significant developments, with buying trends and pricing strategies evolving since December 2024.
Reduced Buying Prices: Crushing plants have lowered buying prices or tightened quality specifications to effectively reduce procurement costs. Despite this, crushers are comfortable with the current price levels of CNY 7,000–7,400/MT, as they hold sufficient stocks of peanut oil.
Edible Oil Dynamics: Slow edible oil sales are strengthening crushers’ bargaining power to secure cheaper crushing peanuts. This trend is likely to persist until April 2025, when new peanut plantations begin.
Daily Deliveries and Price Variations: Daily deliveries have been increasing, with prices varying based on quality. This dynamic could instill some confidence among suppliers and potentially support the edible market’s revival.
Supply Position
Supply conditions in the Chinese peanut market have remained relatively stable, but certain nuances merit attention:
Farmer and Dealer Sentiment: While farmers and dealers are reluctant to sell at current prices, they are gradually being forced to accept prevailing market conditions due to slow demand.
Imported Peanut Stock: A significant stockpile of imported peanuts continues to influence the market. Imported peanuts are priced at about CNY 210–310/MT higher than local crushing materials, which are already lower than the overall procurement costs.
Lunar New Year Tightness: A temporary supply crunch could firm up the market as the Lunar New Year approaches. However, given the broader economic headwinds and weak demand, any price increases are expected to be moderate.
Market Outlook
Looking ahead, the Chinese peanut market is expected to remain cautious, with the following key trends shaping its trajectory:
Temporary Price Firming: The market may see slight firming due to temporary tight supply leading up to the Lunar New Year. However, significant price hikes are unlikely due to deflationary pressures and subdued consumer confidence.
Crushing Market Stability: The crushing segment is expected to remain quiet until March, with no significant changes in prices or activity. Current levels are already profitable for crushers, and substantial imported stocks provide a buffer.
Edible Market Movement: Prices in the edible segment could rise by CNY 210–310/MT in the coming weeks but are likely to normalize as large supplies of the 2024 crop re-enter the market.
Export Opportunities: The weak Chinese currency has made exports more competitive in dollar terms, which could support international sales to some extent, though global demand remains a critical factor.
Conclusion
The Chinese peanut market faces a delicate balance of challenges and opportunities as January 2025 progresses. While the edible market struggles with sluggish demand, resilient snack food consumption offers a silver lining. Exporters and crushers may find some relief from competitive pricing and ample stock levels, but long-term recovery will hinge on economic stability and improved consumer confidence. As the year unfolds, stakeholders will need to remain agile in navigating these uncertainties.
