For the Quarter Ending December 2024
North America
During the entire fourth quarter of 2024, the U.S. peanut and peanut oil markets encountered notable price pressures amidst global competition and shifting demand dynamics. Competitive pricing from major producers such as India and Argentina challenged U.S. export performance, despite stable domestic demand driven by the snack and oil sectors.
The seasonal harvest yielded ample supplies, contributing to downward pressure on prices as oversupply concerns emerged. Rising imports of alternative edible oils further weighed on the market, while stringent aflatoxin standards added complexities for exporters. Manufacturing activity reflected a decelerating trend, with the U.S. PMI moderating from earlier peaks, indicating narrowing profit margins and higher inflationary pressures on production.
Freight cost stabilization partially alleviated logistical challenges, but global competition and reduced purchasing power in key export markets curtailed growth opportunities. These conditions highlighted the need for strategic market positioning, cost optimization, and diversification of both domestic applications and export channels to sustain competitiveness amidst evolving global trade dynamics.
Asia Pacific
During the entire Q4 2024, the Indian peanut market demonstrated mixed dynamics, initially stabilizing in October due to favorable weather and a record harvest. Fresh supplies softened prices, while strong domestic demand, fueled by the festive season and robust consumption in snacks and oil sectors, provided upward pressure. Export demand, particularly to Southeast Asia and China, grew but faced challenges from competitive pricing by the U.S. and Argentina. By December, prices experienced a significant decline as Gujarat’s record production of 4.2 million metric tons led to oversupply. High imports of edible oils, stringent aflatoxin standards, and reduced global purchases compounded challenges, pressuring farmers with diminishing returns and emphasizing the need for export diversification and expanded domestic uses. Additionally, India’s manufacturing sector showed resilience early in the quarter, with the PMI rising to 57.5 in October, reflecting strong demand and international sales. However, growth momentum weakened by December, with the PMI dropping to 56.4 due to competitive pressures and inflationary costs. Stabilizing raw material prices and narrowing profit margins restricted production expansion. These conditions highlight the need for strategic cost management and diversification to balance market imbalances and sustain competitiveness in both agricultural and industrial sectors.
Europe
In the fourth quarter of 2024, the European peanut oil market faced a weakened trend driven by several global and regional factors. Competitive export pricing from major producers like Brazil, Argentina, and Asian nations exerted downward pressure on European imports, as lower-cost alternatives flooded the market. Additionally, the oversupply of peanuts globally, resulting from abundant harvests in key producing countries, further reduced raw material costs for peanut oil, which translated to declining prices in Europe. Weak domestic demand in the European market, influenced by economic challenges and a consumer preference shift toward cheaper vegetable oils, compounded the downward price trend. The global surplus of alternative edible oils, particularly palm and soybean oils, intensified competition and eroded market confidence. Exchange rate fluctuations, logistical improvements, and reduced freight costs supported import activity but did little to counteract the prevailing bearish sentiment. Overall, the European peanut oil market saw subdued performance, influenced by global oversupply, lower international pricing, and soft regional demand.
South America
In the fourth quarter of 2024, Brazilian peanut oil prices experienced a consistent decline, driven by several interrelated factors. October marked a significant reduction in export prices, primarily influenced by competitive pricing pressures from Asian peanut-producing nations and improved weather conditions in South America, which bolstered crop yields and stabilized production volumes. Exchange rate fluctuations and freight costs further shaped Brazil’s global competitiveness. Manufacturing PMI in Brazil eased slightly to 52.9 in October, with robust growth in output and new orders, albeit at a slower pace, supported by strong international demand from regions like Africa, Japan, and the Americas. By November, an abundant peanut harvest in Brazil exacerbated supply-side pressures, leading to oversupply and inventory buildup, which forced producers to reduce prices. Domestic demand for peanut oil weakened due to an economic slowdown, a consumer shift toward cheaper vegetable oils, and reduced purchasing power, while stiff competition from India added export challenges. The depreciation of the Brazilian real supported export competitiveness but contributed to lower domestic returns. December saw a further price drop as surplus production, declining global edible oil prices, and competition from major producers like Argentina and India pressured the market. Additionally, logistical improvements and reduced freight costs stimulated export activity but failed to counterbalance the downward trend. The combined impact of these factors, alongside potential government interventions, underscored the decline in Brazilian peanut oil prices throughout the quarter.
For the Quarter Ending September 2024
North America
In the third quarter of 2024, the North American peanut oil market faced significant impacts from the declining prices observed in the South American region, particularly Brazil. The notable oversupply of peanuts, coupled with weakened demand and heightened competition among major producers, led to a bearish market sentiment that reverberated across North America. Initially, North American exporters benefited from higher export prices due to favorable international quotations; however, as Brazilian prices plummeted, pressure mounted on North American prices, compelling them to adjust downwards to maintain competitiveness. The processing sector in North America also felt the effects, as the influx of lower-priced peanut oil from South America forced processors to reconsider their pricing strategies amid rising production costs driven by inferior-quality crops.
Additionally, reduced inquiries from key end-users further contributed to a decrease in demand for North American peanut oil. By the end of the quarter, while there was some stabilization in prices as the supply-demand scenario improved, the overall market turnover remained cautious, with stakeholders adapting to the prevailing conditions driven by global supply dynamics and shifting consumer expectations.
Asia Pacific
Moving into the third quarter of 2024, the Asia-Pacific (APAC) region experienced a significant downturn in peanut oil prices, with India facing the most pronounced fluctuations. Prices surged substantially until mid-quarter but then dropped sharply as September began. Up until August, the market exhibited a steady upward trajectory, characterized by a consistent rise in inquiries within the regional sector. Strong demand from key industries, particularly food processing, kept procurement levels elevated, with manufacturing entities operating at high capacity to meet this demand. However, rising energy costs hindered their ability to scale production effectively.
Compounding these dynamics was a disruption in weather patterns affecting the winter sowing of peanuts in India, which raised concerns about potential supply shortages and sustained higher prices for the commodity. Reports indicated crop damage in certain areas due to heavy rainfall, adversely impacting overall production and contributing to elevated price levels. Traders, anticipating sustained demand, strategically liquidated inventories from 2023 at premium prices, which supported the price rise throughout August. However, a significant decline in prices occurred by the end of September 2024, driven by reduced quotations from end-users. Despite sufficient availability of peanut oil to meet industrial demands, domestic factors, including recent harvest patterns and crop yields, influenced market dynamics. Early estimates indicated that the peanut harvest would be lower than initially anticipated, but supply was expected to increase substantially post-mid-October as peak arrivals of both Bold and Java varieties commenced. Recent rainfall may have lowered the quality of early-harvested peanuts, potentially increasing the volume available for oil extraction. Overall, the trading environment for peanut oil remained subdued throughout the quarter, culminating in a notable price drop by the end of September.
Europe
In the third quarter of 2024, the European region continued to follow the market trend of key producing nations including the South American region. The oversupply of peanuts, coupled with weakened demand and increased competition from major producers, created a ripple effect that impacted European importers and traders. Initially, the quarter began with rising import prices, bolstered by favorable international quotations. However, as the quarter progressed, prices fell sharply due to reduced inquiries from the regional market. While this declining price provided a short-term benefit to consumers and food manufacturers reliant on peanut oil, lower costs for imports translated into reduced production expenses. However, the volatility in supply dynamics and concerns over the quality of peanuts from regions like India and Brazil contributed to uncertainty in the market. This situation was further exacerbated by regional factors such as fluctuating energy costs and adverse weather conditions affecting peanut crops, which raised concerns about future supply stability. As a result, while the price drops initially appeared advantageous, they masked underlying supply chain challenges that could affect European market dynamics moving forward. Overall, the third quarter concluded with a bearish sentiment, similar to that of other nations.
South America
The third quarter of 2024 was marked by a significant decline in peanut oil prices in the South American region, particularly in Brazil, where the most pronounced price fluctuations occurred mid-quarter. The market dynamics were shaped by a confluence of factors, including an oversupply of peanuts, weakened demand, and intensified competition from major producers. At the outset of the quarter, export prices initially rose due to favorable quotations from international markets. However, supply-side challenges emerged as peanut yields were adversely affected by lower-quality crops, resulting in decreased yield per acre and elevated production costs. The processing of inferior-quality peanuts further complicated the supply landscape, necessitating more intensive processing and cleaning, which increased expenses for processors. As the quarter progressed into August, prices experienced a marked decline, reflecting a broader pessimistic trading trajectory. This downturn was largely attributed to reduced inquiries from key overseas markets, notably China and the Asia-Pacific region. Recent peanut harvests contributed to rising stockpiles among distributors, fostering a subdued market atmosphere characterized by declining transaction volumes driven primarily by inquiries rather than proactive purchasing. The abundant supply prompted consumers to anticipate further price reductions, adversely affecting Brazil's competitive position in the global peanut oil market, particularly against countries like India, which also projected a robust peanut harvest. The oversupply scenario exerted downward pressure across the value chain, leading to bearish market sentiment. Despite these challenges, prices began to stabilize towards the quarter's end, supported by a more balanced supply-demand scenario that aligned with current inquiries focused on essential needs.
For the Quarter Ending June 2024
North America
Throughout the second quarter of 2024, peanut oil prices in North America mirrored the market trends of exporting nations, particularly South America. In April, the market experienced a downward trend, significantly influenced by the strategic actions of the USA, a major importer of peanut oil. Downstream processing enterprises adjusted procurement strategies in response to an oversupply and inquiries from end-user oil processing mills, keeping market transactions on the southerly side.
Moving into May, the market observed a steady upward trend, with prices on the northerly side. Market analysts and traders noted that supplies remained moderately sufficient among downstream suppliers, driven by inquiries from regional markets. Additionally, the appreciation of the US dollar against the currencies of exporting nations played a crucial role. This currency appreciation benefited downstream buyers and traders, enabling them to accumulate goods at a lower cost. However, as June concluded, the United States saw an opposing pricing trajectory. The intricate web of interconnected factors, including international price fluctuations and regional demand strategies, underscored the complexity of market dynamics during the month. These factors influenced the overall supply-demand landscape, providing a comprehensive view of the multifaceted forces shaping peanut oil prices throughout the quarter.
In summary, Q2 2024 for the North American peanut oil market was marked by fluctuating prices driven by global market trends, supply chain adjustments, and currency dynamics. The strategic procurement adjustments by downstream processing enterprises, influenced by oversupply and end-user inquiries, initially led to a downward price trend throughout the quarter.
Asia Pacific
During Q2 2024, the peanut oil market in the APAC region, particularly in India, experienced mixed pricing trends. In April, prices saw a steady drop due to stable demand, higher arrivals of groundnut crops from recent harvests, and reduced trade momentum. The harvest season brought an oversupply of peanuts, leading to a decrease in peanut oil prices. Fresh crops entering the market required the selling of existing stocks at lower prices to make room for new inventory, incentivizing bulk purchases by retailers and wholesalers. Despite these conditions, market trade momentum remained weak throughout the month. In May, however, prices exhibited a steady upward trajectory, capturing the attention of industry stakeholders and policymakers. This rise was driven by increased downstream purchasing, fueled by the perceived health benefits and versatility of peanut oil in culinary applications. Additionally, heightened competition in international markets strained domestic supplies. Escalating costs of agricultural inputs, including fertilizers, labor, and energy required for manufacturing, also exerted upward pressure on prices during the month. By June, market sentiment had dropped considerably, with prices falling steadily. Despite buoyant demand conditions spurring expansions in new orders, output, and buying levels, transactions involving peanut oil within India's domestic market declined. A surplus of peanut oil supplies relative to overall demand within the country put downward pressure on prices as suppliers competed for market share, creating a favorable environment for buyers seeking cost-effective solutions. Throughout the quarter, the peanut oil market faced inflationary pressures, but the fastest rate of hiring in more than 19 years indicated resilience. Overall, market sentiments for peanut oil in Q2 2024 remained pessimistic, with an average price drop of nearly 2 percent compared to the previous quarter of the same year. The mixed trajectory of prices reflected the complex interplay of supply and demand dynamics, international competition, and cost pressures in the peanut oil market.
Europe
Throughout the second quarter of 2024, the European Peanut oil market closely mirrored pricing trends in North America, particularly the United States, exhibiting a predominantly bearish trajectory with modest fluctuations mid-quarter. The initial decline was driven by reduced purchasing activities and declining consumer confidence, both influenced by rising inflation. Weak export activity, low demand from European nations, and a narrowing price spread between Peanut oil and soybean oil exerted pressure on contracts, resulting in decreased imports from key producing nations. Currency depreciation, especially the weakening of the Euro against foreign currencies like the US dollar, further increased the cost of imports for European countries. Consequently, traders were reluctant to make new purchases, focusing instead on destocking their previously accumulated inventories. Additionally, Peanut oil prices were influenced by price movements in related oils as they competed for market share in the global vegetable oils market. The general preference for alternative edible oils in the terminal catering industry across European nations led to a continued decline in inquiries concerning Peanut oil, further weakening market transactions. This shift in preference and the competitive landscape contributed to the overall bearish market sentiment and reduced trading activity in the Peanut oil sector in Europe during Q2 2024.
South America
Throughout Q2 2024, the export prices of peanut oil from South America, particularly Brazil, exhibited a downward trend with a modest rise in the middle of the quarter. In April 2024, Brazil's peanut oil export prices dropped steadily due to weakened inquiries from overseas markets, especially from the APAC region, including China. The subdued market trading atmosphere, influenced by higher stockpiles among Stuckists and the recent harvesting of the first peanut crop, supported the higher availability of the upstream peanuts. However, the with steady drop in demand side the overall market transaction continued to lean on the southerly side. While, moving into May 2024, downstream traders experienced a steady upward trend with moderate supplies among downstream suppliers. Export businesses from key importing nations also support the current trend, reinforcing prices and market stability with traders actively focused on their trading sentiments. Moreover, the rise in other edible oil prices, such as sunflower oil, also contributed to the increase in peanut oil prices during this period. Additionally, rising global freight rates kept overall trades of peanut oil from Brazil on the higher side, benefiting Brazilian market players who traded their commodities at higher costs. However, as June commenced, market sentiments reversed. The export prices of peanut oil from Brazil declined again due to reduced inquiries from overseas markets, particularly from the APAC region, including China. The demand for peanut oil appeared relatively weak or stagnant, especially in key importing regions like Asia-Pacific and resulting in a need-based purchasing approach. This cautious approach from downstream industries led to a buildup of peanut oil supplies among merchants, indicating a mismatch between supply and demand dynamics. Traders focused on reducing their inventories to prevent further stockpiling. Overall, Q2 2024 for the South American peanut oil market was marked by fluctuating prices influenced by global market dynamics, supply chain factors, and changing demand patterns, with a notable downward trend by the quarter's end.
For the Quarter Ending March 2024
North America
Throughout the first quarter of 2024, the prices of peanut oil across the North American region followed the market trajectory of exporting nations, particularly South America. The market started at a steady rate with prices rising moderately further demonstrating a sudden drop followed by a stable rising trajectory as March concludes. Initially, modest demand witnessed after the end of the new year breaks supported this trend. Also, currency appreciation further played an important role as the dollar continued to appreciate against exporting nations' currencies. This benefitted the downstream buyers and traders as they focused on accumulating the goods at a lower cost. However, the market witnessed a sudden downward trend as February concluded, This downturn was largely driven by the strategic actions of the USA, a major importer of peanut oil following the market trajectory of exporting nations. The USA adjusted pricing strategies to maintain global competitiveness, which had a ripple effect on the worldwide market, leading to price reductions. Responding to an oversupply, downstream processing enterprises adjusted procurement strategies, further lowering prices. However, March saw an increase in prices due to the rebound demand side followed by the ease in freight cost. This led US market players to resort to bulk orders, further driving up prices with higher import orders. The repercussions of pricing strategies reverberated across the United States, creating a ripple effect that significantly impacted the overall pricing structure of Peanut Oil. The intricate web of interconnected factors, from international demand fluctuations to regional pricing strategies, underscored the complexity of the market dynamics during the fourth quarter of 2023, providing a comprehensive view of the multifaceted forces at play in shaping the trajectory of Peanut Oil prices.
Asia Pacific
In Q1 2024, the Peanut Oil market in the APAC region experienced a negative pricing environment, with prices steadily rising in March 2024, yet still declining by more than 4 percent compared to the previous quarter of the last year. The overall trend for Peanut Oil prices was influenced by various factors. Firstly, the recent market data reveals a significant drop in spot prices, prompting analysts to investigate. One key driver of this decline is the oversupply situation, where sellers outnumber buyers, posing challenges for the peanut industry. The lack of demand, especially for peanut oil, contributes to sustained price falls, shaping market dynamics. Additionally, to address excess supply, traders offered discounts on peanut oil in locations like Gujarat and Ahmedabad, a trend continuing until late February. Compounding the market challenges, the shift towards alternative edible oils, notably sunflower oil, compounds market challenges. This reflects broader dietary changes due to health concerns and culinary preferences, leading to a notable decrease in demand for peanut oil and exacerbating the supply-demand imbalance. Oil mills have responded by discounting existing inventory to stimulate sales and reduce stockpiles, albeit at the cost of profit margins. Despite these efforts, the market continues to face sustained lower prices, underscoring the industry's struggle to find equilibrium amid demand challenges. However, towards the end of Q1, prices stabilized due to moderate regional demand, increased inquiries from trading nations like China post-lunar holidays, and Vietnam's significant importation of peanut oil. Traders responded by intensifying inventory stocking, despite higher costs due to INR depreciation against the dollar, maintaining domestic prices at elevated levels. Overall, the pricing environment for Peanut Oil in Q1 2024 was uncertain, influenced by supply and demand imbalances, shifting consumer preferences, and input cost fluctuations.
Europe
Throughout the entirety of the first quarter of 2024, the European region closely paralleled pricing trends observed in North America, particularly in the United States, displaying a predominantly pessimistic pricing trajectory with modest fluctuations in the first and last months. This pricing dynamic primarily stemmed from the continuous decline in Peanut Oil prices, driven by weakened downstream consumption. However, this reduction in consumer demand was mitigated by the availability of ample inventories that effectively met the existing demand. Domestic acquisitions followed a need-based approach, sustaining trade momentum that, although subdued, maintained a certain level of consistency in the short term as the euro continued to devaluate against the dollar, thereby resulting in regional imports being more expensive in terms of the euro. However, a steady rebound was witnessed at the end of the quarter which was supported by a modest rise in downstream consumption thereby making the imports within the region at a higher cost as the euro continued to devaluate against the dollar.
South America
Throughout the first quarter of 2024, peanut oil prices in South America, particularly in Brazil, experienced a varied trajectory, leaning towards a negative trend overall, with a decline of over 3 percent compared to the previous year's final quarter. Several factors influenced these market dynamics. Starting with January, initially, the prices of peanut oil stabilized, indicating a return to activity in the Peanut Market following a subdued period during Christmas and New Year, which is customary. In January, peanut oil prices initially stabilized after the holiday season. However, challenges in Brazil, including adverse weather conditions like drought and excessive rainfall, have impacted peanut yields for the upcoming harvest. This is expected to result in a shortfall compared to last year, with potential quality concerns. The effects of erratic weather extend to other crops like soybeans and corn, affecting overall availability. Consequently, limited upstream peanut availability has led to a rise in peanut oil prices.
While, in February, there was a notable decline in peanut oil sales from Brazil, supported by reduced overseas purchases. The impact of importing nations on the groundnut oil market was significant, particularly with stagnant or weak demand, influencing overall market dynamics. Despite China's status as a major importer, export demand for groundnut oil remained subdued ahead of the Lunar New Year, leading to temporary shutdowns of manufacturing units and markets, resulting in decreased workforce and downstream buyers. This further contributed to the overall pessimistic market outlook for peanut oils, creating a demand-supply imbalance as merchants had sufficient stock at oil mills ready for export. However, as the quarter progressed, a steady market rebound occurred, bolstered by increased overseas off-takes from China. The reopening of markets post-Lunar New Year and Spring Festival holidays revitalized production activities, introducing fresh inventories and driving up prices as demand surged for bulk inventories internationally.
