Early harvest will not crimp carnauba wax prices

OREANDA-NEWS. June 01, 2015. Brazilian carnauba wax prices are expected to rise despite strong inventories and an early harvest for the high-melt wax, Commtrade general manager Mario Neto said.

Carnauba wax, which is used in products ranging from car polish to M&M candies, is expected to have a strong harvest despite the drought and extreme water shortages affecting most of Brazil. Recent rains in the northeastern region where carnauba palm trees grow have spurred positive forecasts for the upcoming harvest, which is expected to start earlier than normal — in the summer instead of the typical fall start.

Commtrade expects the higher export prices for carnauba wax to be especially volatile through the harvest season because of the country's poor financial situation and frequent exchange rate changes.

Carnauba wax exports in the first three months of 2015 have slipped slightly to 9.33mn lbs, down from 9.84mn lbs last year, but prices are above year earlier levels, according to data from the Brazilian Ministry of Industry and Commerce and depicted in tables in Commtrade's May newsletter.

Between January and March of this year, Brazilian carnauba export prices averaged at 369?/lb, up from 316?/lb in the first three months of 2014.

The US imported 2.32mn lb of carnauba wax in the first three months of this year, up from 2.86mn lb during the same period in 2014, according the US Census data. Prices are also up from year earlier levels, increasing by 55.66?/lb to 378.50?/lb.

Carnauba wax is a food-grade high melting point wax. It is used to make floor polishes, car wax and candy coatings. The wax grows naturally on the carnauba palm leaves, which are typically harvested from the fall through the spring. The leaves are left out to dry, and then the wax is beaten off of the dried leaves and processed. Harvesting carnauba wax is extremely labor-intensive, which is partly responsible for the increasing prices.