Nut buyers have had to suffer extraordinarily high prices recently, but while prices remain elevated relief is on the cards soon.

World prices for peanuts (not a nut technically but a legume) rose 23.4% this month to £991.5/tonne, primarily due to a poor crop in China [Mintec].

Chinese production is forecast to fall to 13 million tonnes in the 2014/15 season - down from 17 million tonnes in 2013/14. This is in part due to poor weather in growing regions. “Drought and heavy rains during the harvest, plus a reduction in planting areas, resulted in poor yields,” says Mintec analyst Jara Zicha.

Chinese growers also reduced plantings by 40% in some regions following a bumper crop last year, when “they overplanted and ended up having to sell at discount prices,” adds Nick Thomas, a trader at Barrow Lane & Ballard.

China turns to imports when its own production falters, which puts pressure on world stocks and pushes up prices.

However, Thomas says it is unlikely the situation will have a long-lasting impact. According to the latest market outlook from the British Peanut Council (BPC) production forecasts for South America and the US - from where the UK imports the vast majority of its peanuts - are looking good, which should boost world stocks in coming months.

Meanwhile, hazelnut prices have continued to rise to record levels because of tight supplies caused by cold weather in Turkey, the world’s main producer of the nuts.

UK importers are currently paying 75.8% more year on year for hazelnuts. [Mintec 15 April 2014] due to short supply.

However, hazelnut prices are also likely to ease later in the year and the 2015 crop is expected to “recover substantially”, says Zicha, with production reaching as much as 650,000 tonnes.

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