📰 Free on Board's Agri Headlines gives an outline on notable news in the agriculture space. For this week, we cover the cashew situation in the Ivory Coast and the US, the story behind the record-high export value for Argentinian beef, and the repercussions of the Indian wheat export ban.
Tune into Episode 19 to learn more about the situation.
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0:06 Let's get on with the updates!
0:16 [Hyesun] Bringing you all the latest agricultural updates
0:19 [Hyesun] Welcome to another episode of Agri Headlines.
0:21 [Hyesun] This is Hyesun joining again from South Korea
0:24 [Ben] And this is Ben joining from South Africa.
0:26 [Hyesun] We're bringing you three stories as usual with an update on what's going on in the global cashew market, the Argentinian beef market and Indian wheat.
0:33 [Ben] We have a wide selection of interesting updates for you today. So let's get started!
0:37 [Hyesun] Yes, so for our first issue we will be covering the cashew market. I believe this is a first.
0:42 [Ben] Yes it is.
0:43 [Ben] So the Ivory Coast is attempting to boost the domestic processing of cashews by both the public and private sectors.
0:49 [Hyesun] Right. And this is in spite of the fact that they are already one of the world's largest cashew producers, right?
0:55 [Ben] Indeed.
0:56 [Ben] So while the Ivory Coast is a top producer, the country processes only about 2.6% of the global cashew supply, 90% of the raw cashew nuts
1:05 [Ben] the Ivory Coast produces are exported to either Vietnam or India where the nuts are deshelled and exported as cashew kernels.
1:12 [Hyesun] There is both good news and bad news for the cashew industry in the Ivory Coast.
1:16 [Hyesun] The good news is that the market share in the top three cashew kernel importing countries has more or less tripled over the last two years.
1:22 [Hyesun] And the bad news is that it comes from very low base, ranging from 0.1 to 1.5% this year of imports from the Ivory Coast to its top three exporting markets
1:32 [Hyesun] the US, Germany, and the Netherlands increased ny 2%, 4.1%, and 2.3% respectively.
1:39 [Ben] The Ivory coast government is aiming to have half of its cashews processed domestically by 2025 or 2026.
1:46 [Ben] But there is still a long way to go with only four out of the 20 processing plants operating earlier this year with the other plants closing due to financial issues.
1:55 [Hyesun] Exactly. Let's also take a look at the situation in the US.
1:58 [Hyesun] So along with other nuts like almonds and pistachios, the demand for cashews also increased during the pandemic.
2:04 [Ben] For the first two months of 2022, however, cashew imports dropped by 5% year on year.
2:10 [Hyesun] Right. Is there any specific reason for the drop?
2:13 [Ben] Yes. One reason is because prices were comparatively low in 2022, traders stocked up and have plenty of stock available.
2:21 [Ben] Another reason is that shipment delays are influencing cashew exports with disruptions in Southeast Asia intensifying.
2:28 [Ben] This has led to an 85% drop in US imports from India for February 2022 compared to December 2021.
2:35 [Hyesun] Wow a 85% decrease!
2:37 [Hyesun] Are there any changes on the demand side?
2:39 [Ben] Yes, so another reason could be the impact of inflation as US households tighten their budget and luxury snacks like nuts, especially cashews
2:48 [Ben] which cost more than almonds and pistachios are the first to go.
2:52 [Hyesun] So, Ben, do you want to get a start on the second issue?
2:54 [Ben] Sure thing.
2:55 [Ben] So for our second issue, we discuss how Argentinian beef exports soared to a record high value in the first quarter of 2022.
3:03 [Hyesun] Right, but there is a catch, right?
3:04 [Ben] That's right.
3:05 [Ben] So while the value was at a record high, the volume was notably less than the previous quarter due to the soaring prices.
3:12 [Hyesun] Exactly. So while the export value increased by 26% year over year for the first quarter, the actual volume of exports declined by 7% year over year, totaling 137 metric tons.
3:23 [Ben] Export prices averaged 5.69 US dollars per kilogram, 36% higher compared to 2021 mostly due to the high input cost and continuous logistical disruptions.
3:35 [Hyesun] And the Argentinian beef export value is expected to increase further due to strong demand and tight supply.
3:42 [Ben] Exactly. Along with the ongoing depreciation of the Argentinian peso where exporters are finding the export market more lucrative.
3:49 [Hyesun] One thing to note though is that the Argentinian government since last May has implemented a series of export bans on the seven most popular cuts to keep prices low and have the products be sold domestically.
4:01 [Ben] Is the ban still in place?
4:02 [Hyesun] Yes, it is. The ban has been extended and it is set to be in place until the end of 2023.
4:08 [Ben] And the circumstances surrounding Argentinian beef are significant, as Argentina is the fifth largest global exporter of beef, with 64% of its supply going to China for the first quarter of 2022.
4:21 [Hyesun] Right. And with the band in place
4:22 [Hyesun] There is room for other major exporting markets such as the US, Australia, and Brazil.
4:27 [Hyesun] In fact, Uruguay was one market that benefited from the ban in 2021 as Chinese buyers looked for alternative suppliers.
4:35 [Ben] And for our third and final story for the day
4:37 [Ben] July wheat futures at the Chicago Board of Trade have soared by 26 US dollars per metric ton on May 16th, 2022.
4:43 [Ben] and Euronext million futures have also jumped by 23 US dollars per metric ton.
4:50 [Hyesun] We mentioned this issue a bit in our last episode with Bea and Theo and today we will be talking more about the Indian wheat export ban that took place on May 13th.
5:00 [Ben] The export restrictions were in response to the food security concerns of the scorching heat in March that affected the wheat crop in major producing areas.
5:08 [Hyesun] With that, the forecast for domestic wheat production was cut by 5.4% to 105 million metric tons, which is equal to the annual consumption of wheat in India.
5:18 [Ben] Right. Following the announcement of export measures, domestic wheat prices in the major producing region of Madhya Pradesh fell by 20 US dollars per metric ton to 300 US dollars per metric ton.
5:29 [Hyesun] And while India is not a major wheat exporter on the back of tightening global supplies
5:33 [Hyesun] aggravated by the Black Sea supply disruptions, any further interruptions in the grain flow might cause a price hike.
5:39 [Ben] Exactly. The good news is the EU, Canada, and Russia are expecting an increase in wheat crops for the 2022/23 season, which could offset the losses and relieve price tensions.
5:52 [Ben] All eyes are on the two-month window of May and June before the Northern Hemisphere crops start, where Indian exports would have eased supply tensions.
6:00 [Hyesun] Care to start on the takeaways, Ben?
6:02 [Ben] Sure thing. For our first issue, the Ivory Coast is aiming to increase the amount of cashews processed domestically from 10% to 50% by 2025 or 2026.
6:13 [Ben] Also high cashew demand in the US during the pandemic has seemingly waned.
And for a second issue, the Argentinian beef expert value is at a record-high while the export volume has decreased, reflecting the drastic price increase.
6:27 [Ben] And for our final issue, India has announced a ban on wheat exports as wheat futures continue to rise.
6:33 [Ben] While the upcoming harvest from the Northern Hemisphere is expected to be promising, we’ll have to see if the ban exerts pressure on prices in the months leading up to the inflow of new crops.
6:43 [Hyesun] And that concludes episode 19 of Agri headlines. We will be back next week with the latest agricultural updates, dissected and ready for you to consume.
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7:04 Check out tridge.com/intelligence-data for more price analyses and up-to-date insights into the food and agricultural industry.