PRODUCTION:

Post forecasts 2015/16 peanut production area at 350,000 ha, down approximately ten percent compared to the 2014/15 USDA official production area estimate of 385,000 ha. Like sunflowerseed producers, peanuts are somewhat of a niche market in Argentina and not just any farmer will rotate peanuts into production based on prices or other favorable factors. Production costs are nearly three times as high as they are for soybeans, so that will inhibits any aggressive expansion. That being said, production area is available to expand, should farmers in the sector read that the market demands additional peanuts. U.S. peanut planting intentions significantly influence Argentine farmers' peanut planting intentions, since the United States is both a competitor and an importer of Argentine peanuts. With more area planted in the United States, prices become depressed. It is not worthwhile to sell peanuts to the United States under the tariff rate quota (TRQ) in years when there is a large production. Post forecasts a drop in area based on the market anticipating a significant increase to 2015 peanut production area in the United States. (As of the writing of this report, USDA has not yet officially published its 2015 planting area intentions.) With high carryover stocks and signals that the United States will increase hectares to peanuts, Argentine farmers are forecast to reduce area. Production in 2015/16 is forecast at 1 mmt, based on the area reduction and average yield trends.

For the current 2014/15 peanut crop, Post maintains estimated area at 382,000 ha and adjusts production upwards to 1.15 mmt. Similar to the other oilseeds, the peanut crop has experienced excellent weather conditions over the past few months. In contrast to poor harvests over the past few years, 2014/15 peanut yields are projected at 3 to 3.1 mt/ha. (As the harvest has not begun, these yields are projections and not yet validated in the field.) Some regions in the north and center of Cordoba province experienced excess precipitation, and some regions of southern Cordoba province and La Pampa province are complaining of water shortages. Nevertheless, excellent weather should lead to high yields at the national level that will offset whatever marginal yield losses the sector will undergo in isolated regions. The high amounts of rainfall have increased the pressure of peanut crop diseases, but thus far producers have effectively staved off diseases with early treatments. Currently, crop conditions indicate great yields, yet several critical production phases in the upcoming months may still undermine the final yields.

CONSUMPTION:

Domestic peanut consumption is low in Argentina with the majority of the production destined for the confectionary export market, specifically the European Union. Peanuts that do not meet food-grade standards are utilized for crushing. In fact, crushing can be considered a residual activity in the peanut industry. Over the years, crush has no direct relationship or trend in-line with production. If there are peanuts of export quality, they will be exported. There is no new crush capacity, so crush will continue to be a function more of peanut quality and international demand for derivative products. Domestic consumption of peanut oil and meal are low, with most oil being exported and meal used for residual feeding.

Crush for 2015/16 is forecast at 270,000 mt, a seven percent increase on the 2014/15 USDA official crush estimate. The increase in crush is forecast based on the sector's view of market opportunities for augmenting peanut oil exports to China. The sector projects that it can export peanut oil to China in the window before China's next harvest comes on line. 2014/15 crush is estimated at 220,000 mt, based on information from peanut sector sources.

TRADE:

Argentina is known for producing high quality confectionary peanuts and although Argentina ranks number seven for peanut production in the world market in 2014, they were the third largest exporter of peanuts in the world behind India and the United States. The largest markets for Argentine peanut exports were the Netherlands, Russia, the United Kingdom, Algeria, Mexico and Germany. The EU is forecast as the natural destination for Argentina's 2015/16 peanut exports. With the political uncertainty in Russia, it may yet grow as a market for Argentine exports. Of note, Argentine 2014/15 peanut exports to Ukraine and Brazil plummeted, though at the macro level the exports were offset by additional exports to the EU. Due to international market demand, the sector anticipates exports at a minimum of 450,000 mt per year. Exports are forecast at 600,000 mt for 2015/16, based on increased export competition from the United States. 2014/15 exports are maintained at 750,000 mt. 2015/16 peanut oil exports are forecast at 84,000 mt, a 20 percent increase on 2014/15 export estimates due to a marginal bump in Chinese demand for peanut oil imports.

STOCKS:

Beginning stocks (mt) for 2013/14:

Ministry of Agriculture

USDA Official

Peanuts

190,000

880,000

Estimated beginning stocks for (mt) for 2014/15:

Ministry of Agriculture

USDA Official

Peanuts

250,000

893,000

POLICY:

Export licenses and taxes

The ex National Agricultural Trade Control Agency (ex-ONCCA) regulates agricultural exports in Argentina and requires exporters to solicit export registrations (ROEs). Approval of ROEs is generally automatic for oilseeds and there are two different embarkation periods, either 45 or 180 days, depending on when the exporter pays the required export tax. If paid within five days of soliciting the ROE, the exporter is granted an embarkation period of 180 days. If paid at the time of export, the exporter is granted a 45 day embarkation period. Export taxes on oilseeds are as follows:

Peanuts 23.5%

Peanut Oil 5%

U.S. Tariff-Rate Quota for Argentine Peanuts

Argentina has a tariff rate quota available in the United States for a total of 43,901 tons of peanuts each year (April 1 through March 31). Historical tariff-rate quota fill rates have been below 30 percent fill because the production is generally high enough in the United States to meet internal demand. Furthermore, prices aren't high enough in the United States and Argentina prefers to ship to the EU, its largest market, at more competitive prices.

Below is a look at historical fill rates, where 2012/13 and 2013/14 have been exceptionally high:

Marketing Year

Quantity Shipped (tons)

Percent Filled

2013/2014

6,719.21

15.31%

2012/2013

27,468.49

62.57%

2011/2012

39,687.75

90.4%

2010/2011

5,684.35

12.95%

2009/2010

8,460.19

19.27%

Source: U.S. Customs and Border Protection

Oilseed, Peanut

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

380

383

385

385

0

350

Area Harvested

378

378

385

382

0

350

Beginning Stocks

713

713

880

730

0

880

Production

997

997

1,050

1,150

0

1,000

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,710

1,710

1,930

1,880

0

1,880

MY Exports

580

700

750

750

0

600

MY Exp. to EU

420

465

465

465

0

450

Crush

220

250

250

220

0

270

Food Use Dom. Cons.

20

20

22

20

0

20

Feed Waste Dom. Cons.

10

10

15

10

0

10

Total Dom. Cons.

250

280

287

250

0

300

Ending Stocks

880

730

893

880

0

980

Total Distribution

1,710

1,710

1,930

1,880

0

1,880

1000 HA, 1000 MT

Oil, Peanut

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

220

220

250

220

0

270

Beginning Stocks

23

23

2

2

0

1

Production

60

60

73

70

0

85

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

83

83

75

72

0

86

MY Exports

80

80

70

70

0

84

MY Exp. to EU

15

15

15

15

0

15

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

1

1

1

1

0

1

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

1

1

1

1

0

1

Ending Stocks

2

2

4

1

0

1

Total Distribution

83

83

75

72

0

86

1000 MT, PERCENT

Meal, Peanut

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

220

220

250

220

0

270

Beginning Stocks

4

4

5

5

0

2

Production

95

95

100

90

0

110

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

99

99

105

95

0

112

MY Exports

18

18

20

20

0

25

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

76

76

80

73

0

85

Total Dom. Cons.

76

76

80

73

0

85

Ending Stocks

5

5

5

2

0

2

Total Distribution

99

99

105

95

0

112

1000 MT, PERCENT