Pecans: demand to outstrip supply?

Higher production in South Africa

South Africa is the world’s third largest producer after Mexico and the USA. Harvesting has been completed here with the South African Pecan Nut Producers Association (SAPPA) estimating the crop size at 27,800-29,200 tons and nuts in exportable quality at 25,000-26,300 tons. Judging by the amounts received by processors the crop size has increased by 31% on last year but still ranges 7% lower than the receipts perceived in 2022.

Mixed perceptions in the US

Harvesting is only about to start in the Southern USA and in Northern Mexico. Assessments, however, vary in the US. According to Texas A&M AgriLife much will depend on the weather during harvest in October to December. Concerns are being voiced over the impact of the rainy spring and in summer, particularly in East Texas as local media reports highlight. Risk is that fungal diseases may spread, which will impact the quality of the nuts and growers need to hope that the trees will not receive too much water during harvest. Contrary to this, prospects are highly encouraging in Georgia as the trees have not been affected by hurricanes too badly this season so far. Hurricane Helene, which has recently hit the East coast, has been reclassified as a tropical storm over Georgia, yet was still impacting weather conditions at the end of last week. The hurricane season lasts until 30 November.

While industry representatives reckon that US kernel production will be similar in size to last year’s 62,000 mt, suppliers are more pessimistic in predicting a 5%-10% decline for the USA and Mexico. Issue are reports over fewer nuts on the trees due to the high temperatures and drought conditions experienced between March and May and the prolonged period of drought witnessed in the past two years. Forecasted rain may, however, help to improve quality in some growing regions.

High demand vs. tight supplies

As Mexican processor Pecaninis reports China has already purchased around 90% of the South African crop with average prices ranging at USD 5.00/kg. The final consignments will arrive in early October, well in time for Chinese New Year on 29 January 2025. Demand is reportedly strong in Europe as many enquiries and offers are being issued. Buying has remained steady in the US and Canda but is expected to fall in Mexico as the Peso has recently devalued against the US dollar, whereas a strong peso boosted buying last year.

Judging by figures issued by the Texas Pecan Growers Association (131,000 mt), official estimates for the Southern Hemisphere (43,000 mt) and unofficial estimates issued by suppliers in Mexico (130,000 mt) along with cold storage carryins (60,000 mt) global in-shell production should reach around 365,000 mt. As global demand is estimated at 299,000 mt supplies will be tighter in 2024/2025 than in the previous year with carry-out ranging nearly as low as 65,000 mt.

Price hike in January/February 2025

General expectation is that prices will rise in 2024/2025 not just because of tight supplies but also because the prices for competing nuts such as almonds, hazelnuts and pistachios are on the rise. This should attract more consumer and industrial demand for pecans. Yet, the market still needs to come to terms with the current situation as crop sizes still need to be confirmed and quality assessed. If buyers are cautious prices may be quite firm until the end of the year.

This situation should change very quickly in January or February at the latest when the USDA issues official production estimates. If these estimates confirm a smaller US crop exporters and processors will certainly rush to secure supplies. Prices may remain elevated well into the 2025 harvest campaign if demand remains high. Suppliers are certainly urging buyers to act now.

View more
- price charts for nuts, dried fruit, oilseeds, grains and more