Pecans : The China Effect

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We all know China is a big purchaser of pecans, or more simply put China is a big purchaser. This is of course due to the large population, if even a small amount of the population favors a particular product it can have a large impact on demand.

This is of course true with pecans as well. For more than a decade now Chinese consumers have been purchasing in-shell pecans for consumption. While the taste for shelled pecans has grown in Mainland China the import of shelled pecans is still not as significant as in-shell pecans. But what many in the industry are beginning to notice is the affect this is having on the shelled pecan market. We all understand that the increased demand from China for in-shell pecans has raised prices of both in-shell and shelled pecans but something you may not have noticed is the decreased availability of Mammoth Halves (GCE: FMH). Chinese consumers have developed a preference for the biggest pecans, these usually come from the southeastern US in the form of Desirable, Stuart, Oconee, and other large varieties; but this is also where a large portion of Mammoth halves are derived as well. Over the last decade China has increased its purchase of in-shell pecans to around 60% of the southeastern US pecan crop and the large majority of those purchases are oversized pecan nuts that would otherwise go to the shelling plant to enter the pecan meat market as a Mammoth pecan half. The long-term effects of this shift are not yet known but for now we continue to see the availability of Mammoth pecan halves shrink.