The wholesale price of nuts has gone through the roof and suppliers are warning that retail prices will inevitably follow.

The average wholesale cost has shot up 39% [52w/e 14 April 2010 Mintec] over the past year, with almonds, walnuts, pecans, cashews, brazils, pistachio, peanuts and macadamias all experiencing sharp increases as events around the globe conspired to put the squeeze on supply.

Retail shelf prices had not yet been affected, but prices would have to rise if the situation continued, claimed one supplier. “If the prices stay firm, they will have to go up at the retail end.”

Supermarket margins were so high that retailers had a certain amount of room to absorb increases, said AF Nuts MD Tony Farndell. However, “eventually the rises must hit the shop floor”.

Brazils have been hit particularly hard, their price rocketing 76% from £2,354/tonne [15 April 2009] to £4,135 [14 April 2010], largely as a result of a government-backed buyer entering the Bolivian market, according to Farndell.

“They are offering the highest prices in the market with a ‘little something extra, later’,” he said.

This had driven the ­market price up, said the supplier. “It’s like intervention buying, which goes on all over the world, but this is done strictly for political reasons.”

To compound matters, last year’s Brazil crop had been poor, adverse weather causing a global shortage that had also pushed prices up, said Eat Natural co-founder Preet Grewal. “That combined with the weak pound has meant people have had to pay more for their Brazil nuts.”

Brazil prices had been expected to fall as more product became available in the January to April collection season, said broker Global Trading & Agency (GT&A).

But since late February the opposite had happened and raw material prices had been rising every week. “Raw material prices are rocketing, indicating either a small crop or a very buoyant domestic market, which is growing.”

Peanuts have gone up 15% in price over the past year and volumes of Chinese peanuts are forecast to be down 11% this season after drought followed by heavy rains affected yields.

“Domestic consumption in China has expanded in the past few years and increased demand is expected to draw in more imports this year,” said Mintec.

Cashews have gone up 23% in price, and GT&A has warned that shipments from Africa had been delayed, so availability could be an issue this month and next.

How raw nut prices have changed (Source: Mintec & UN FAO)

Brazils world’s Biggest Producer: Bolivia rocketed +76% Hazelnuts world’s biggest producer: Turkey Increased +22% Walnuts world’s biggest producer: China soared +71% Pistachios world’s biggest producer: Iran risen +50%