Introduction: in the first quarter of 2022, the russian-ukrainian conflict led to volatile prices of oil resin, which rose to a high level. While the flow of peanut oil is limited, mostly for household use, its prices continue to be affected and, overall, elevated. The rise in the price of peanut oil has led to a positive strategy for the acquisition of peanuts by the oil plant, with an exceptionally high trend in march and prices emerging from previous periods. At the same time, predictions of declining ground areas for peanut cultivation in the new season have spread frequently in the market, provoking thousands of waves with one stone. A study on new season peanut cultivation was conducted by mysteel on the needs of all parties in the integrated market。
Growing cultivation costs
According to mysteel research, the cost of peanut cultivation increased in most regions in 2022. In the case of henan, there was a marked increase in the cost of pesticides and fertilizers in 2022; the cost of irrigated land, membranes, etc. Was generally stable; and seed costs showed a downward trend, as shown below. Overall, a small increase in the overall cultivation cost of peanuts is expected, but it is not the only factor influencing the incentive to grow, but needs to be accompanied by specific analyses of the cost of other competing crops, the willingness to grow, and planting policies。
Differences in cultivation cost performance by region
According to the mysteel study, the cost projections for peanut cultivation in 2022 are as shown above。
The following points deserve attention:
1. The cost of plant planting and harvesting is largely negligible in the most productive areas of jilin, where there is a high prevalence of plant-owning machinery among peanut farmers; in the most productive areas of henan, the cost of seeding and harvesting is normal; in contrast, the cost of mechanical harvesting is higher in parts of shandong。
2. The relatively low cost of irrigated land in the jilin-producing areas is due mainly to the increased use of well-fed water locally, the higher cost of electricity from pumps and the higher cost of irrigated land in other production areas。
3. According to research, the cost of renting ground for peanut cultivation in the jilin area is significantly higher than in north and central china。
Comparison with competitive crops
According to the mysteel study, the combined estimate of the cost of groundnut cultivation in the north-east is higher than that of maize and soybeans, mainly in the areas of seeds, membranes, pesticides and rental land。
On 27 december 2021, at the meeting of directors of the national agricultural and rural department, it was stated that the expansion of soybean oil production was a major political task to be accomplished in the coming year, with the recovery of soybean areas in the four north-east provinces, support for the promotion of soybean complex cultivation in the north-west, the huai sea, the south-west and the centre and downstream of the yangtze river, the acceleration of new models and the gradual promotion of soybean-coloured development, as well as the production of oil, vegetables, peanuts and soybean oil, oil and soybean and soybean production. Together with the introduction of various subsidy criteria in 2022, it can be seen that there is a greater policy preference for maize and soybeans。
Projection of cultivation mentality
The combined costs of peanut cultivation in 2022 are estimated to be slightly higher than in 2021, and the higher costs of cultivation compared to competing crops of maize and soybeans will put pressure on farmers to grow peanuts. Other factors contributing to the decline in cultivation are crop rotation and low-lying areas or conversion to other crops. However, according to an estimate of the proceeds of cultivation, the returns from peanut cultivation are still high, and farmers have limited downside space to grow peanuts. Ultimately, the specific planting mentality also needs to take into account the farming habits of farmers and what crops are grown locally to maximize the benefits. (source: my steel net)
