You’re probably thinking, how can prices be higher and lower, it has to be either one or the other, right? Wrong we are currently in a “have your cake and eat it too” situation.
Currently demand for pecans is very high. However, many people believe, and with good reason, that we have either hit, or are very close to reaching price resistance in the markets at today’s current pecan prices. However, that is not looking at the global picture. The pecan is still highly desired and is still a very profitable nut to roast and sell for processors in Mainland China. Many roasters that I have met with in the Chinese market are increasing production capacity specifically for the in-shell pecan. We are talking large investments into facilities. These are projects that were started with in the last 12 months when in-shell pecan prices were at basically the same levels as today. Another factor to consider is the fact that the US Pecan Growers Council is still very active in many other foreign markets where demand is also increasing; and then there is the weak US Dollar. The US Dollar has lost value in the global markets over the last few months. To give an example in December of last year (2016), one pound of in-shell Oversize (OVS) cost $3.10 USD which at the time was equal to approximately ¥21.54 yuan (Chinese dollars). Today that same one pound of in-shell Oversize (OVS) cost $3.18 which at today’s exchange rates is equal to ¥21.36 yuan. So in reality to the Chinese buyer prices are 0.84% lower than at December of last year. So while prices are 2.58% higher on the US supply side, we like to look at the pecan from a global perspective to get a better understanding of our current market situation.