Chinese exports set another record
March 15, 2010
As expected, the Chinese continue to set new purchasing records for both inshell and shelled Pecans. Based on FAS figures released last week for the 2009 crop year to date (August 1, 2009 - January 31, 2010), the Chinese have already purchased almost 63 million pounds of Pecans (inshell basis); 10 million pounds more than last year's record purchases. With six months of purchases yet to be tabulated, there is no doubt that the Chinese will purchase close to 30% of the US crop. In addition, it would appear that some of the inshell shipped to China was shelled and then brought back to the US for resale. Based on FAS figures, 7,053 lbs of meats have come back to the US for sale. While the FAS figures do not indicate if the product was shelled by a US entity in China for resale in the US, or purchased by a Chinese entity and resold as meats into the US, this is a troubling, yet not unexpected development. Certainly the arrival of seven thousand pounds of meats isn't going to change current market pricing. However, for sometime now, one of the biggest concerns of the US Shelling industry was that US inshell would be shipped to China for shelling and then returned to the US for sale. Those meats, shelled in a country where food safety laws are considerably less stringent than those required of US processors, and where labor costs are considerably lower, could then be used to undercut US market prices thereby forcing weaker Pecan Shellers out of business. Further, the FAS figures do not show that the meats came from US inventory effectively resulting in a 'double counting' of certain portions of the total supply resulting in an overstatement of total available supply. This situation already exists with inshell shipped to Mexico for processing. In some years, this has resulted in an over statement of total available supply by as much as 37 million pounds (inshell basis).
In the meantime, the Pecan market remains firm with consumption holding at or near last year's record levels and supplies of Mammoth, Junior Mammoth, Jumbo and Topper Halves very tight.