Other Than In-shell Shipments to China, Pecan Consumption Continues to be Strong
April 22, 2016
While overall US pecan exports continue to be down (approximately 8%), meat shipments are up 4% over the same period a year ago. China continues to be the primary reason for the overall decline with inshell shipments off 33%. However, meat shipments to China continue to increase and are currently running 41.25% ahead of last year. Based on the February export figures, it would appear that the Chinese Government’s crackdown on tax cheats has been successful as inshell shipments to China through Vietnam dropped from 32.3 million pounds to 6.2 million. Conversely, inshell shipments to mainland China increased from 399,473 lbs to 4.5 million pounds.
Shipments from Mexico continue to be running ahead of last year’s record pace. To date, over 171.7 million pounds (inshell basis) have crossed the border. Subtracting the inshell US Shellers have sent across the border to be shelled, net imports are already over the 150 million pounds the National Pecan Shellers projected in their year-end figures at the conclusion of their recent mid-winter meeting. Based on today’s Cold Storage figures, it would appear that the NPSA crop estimate is also a bit conservative.
Domestic pecan consumption continues to be strong. While the Cold Storage figures released today show 24 million pounds (inshell basis) more in cold storage than the same time last year, that is 6 million pounds less than last month’s differential. Pieces continue to be in short supply with many Shellers now charging as much for pieces as they are for most sizes of halves. Because most almond and walnut contracts were written well before prices began to tumble, and considering that most ingredient users were able to blend lower priced pecan contract balances into new crop contracts, pecan prices continue to be very competitive. That will change as the almond and walnut harvests get closer, but it could be well into the fall before current market prices have an impact on consumption. With South Africa expected to harvest a record crop, current estimates are anywhere from 26 to 28 million pounds, Chinese buyers may not need to enter the US market until much later than usual. If that is the case, and the US can produce a good crop, prices could remain stable through the end of the year.