2.2. Amazonia (Brazil) Nuts

As previously anticipated, in season 2021/2022, collection in Bolivia ended up being smaller than the average, in Peru it was stable, with a slight increase in terms of exports, and the Brazilian crop/export increased. For 2022/23, an increased overall collection of Brazil nuts is expected. The Bolivian crop is forecasted 26% up from the previous season, the Peruvian crop is expected to increase around 10%, while the Brazilian crop is anticipated to be 20% below last year.

The 2021/22 marketing year (March to February) was on the lower side of exports. Boliviau2019s shipments were lower than previous years, while Peruvian and Brazilian exports increased. Year-to-date exports through January and February 2022 accounted mainly for the very small carryover of the 2021/22 crop, which went from a small to a very high price at the end of the season.

As discussed during the INC Dubai Congress, from a supply standpoint, from the processing forward, the overall Brazil nut industry is up-to-date in terms of technology, mechanical cracking and certifications to meet the world market quality demands.

The Bolivian currency is particularly strong as it is fixed against the dollar, which relatively weakens Boliviau2019s position towards exports. However, and similar to Peru, the country has been through a period of improvements in factories, leading to an overall better quality. In Peru, the production infrastructure has improved a lot over the last 10 years, allowing this origin to capture more of the international market, to which the currency devaluation has also helped with. In contrast, a shift was clearly seen in the Brazilian origin, which went from selling 100% to the international market into selling most of the production to the domestic market, which started to use Brazil nuts as an ingredient in many different products. Currently, lots of Brazilians eat at least three Brazil nuts per day since their health benefits are well spread. International shipments from Brazil are always done when the exchange rates are favorable; which is what happened last year, and that is why Brazil exported more than the previous years.

The raw material collection in the jungle remains the main challenge, which all the origins face. So, due to the collection system, in terms of the purchasing of raw material, pricing can move drastically. Adding to that, currency exchange rate has a dramatic effect on when the product enters the market and sales are higher, being another reason for price volatility. Last season started with a very low price, around two dollars per kilogram, and ended up significantly higher, at around $6.50/kg. Because there was a shortage in production, raw materials price increased, hence collectors were paid more, and that increment translated into higher sale prices. In turn, since demand continued to rise, factories kept buying and paying higher prices in order to increase their volumes. However, owing to the significant carryover from the prior season, last yearu2019s sales into the market were, on average, comparable to a relative normal year; even with the big price fluctuation. On the demand side, this volatility also presents difficulties. In Europe u2014one of the biggest marketsu2014 when the price went from $2/kg to $6.5/kg, buyers were facing challenges in the supply chain, especially for securing product availability, and it impacted retail pricing and therefore consumer demand.