With EU member states reportedly moving closer to ratifying the EU–Mercosur trade agreement (NOS), attention is shifting from political feasibility to concrete market impact.
The role of Mercosur in global agricultural trade is often discussed in broad macro terms. In the European nut market, however, its impact is highly uneven. While Mercosur is a marginal supplier in some categories, it is structurally dominant in others, and, under certain conditions, could reshape value-added trade flows into the EU.
A closer look at the data reveals that Mercosur’s influence is not about volume across all nuts, but about concentration, processing leverage, and conditional tariff advantages.
Peanuts: Mercosur’s Structural Stronghold in the EU
Peanuts are where Mercosur’s role is most decisive.
According to Argentine government data and trade statistics, Argentina’s peanut exports reached a 22-year record of approximately USD 1.2 billion in 2024, equivalent to around 0.83 million tonnes, representing about 23% of global peanut exports (Argentinian Secretary of Agriculture, Livestock, and Fishing). In the first half of 2025 alone, Argentina shipped 322,000 tonnes, up 29% year-on-year.
This dominance is even more pronounced in Europe. Argentina supplies roughly 69–70% of all groundnuts imported by the EU, making Mercosur the single most important origin for European peanut buyers (CBI, ITC Trade Map). Between 2018 and 2022, Argentine exports to the EU increased by around 80,000 tonnes, while total EU peanut imports grew at a more modest ~1.7% annually, indicating a clear gain in market share.
Brazil’s role in peanuts is smaller but growing. Brazilian peanut production rose from approximately 0.79 million tonnes in 2022/23 to a projected 1.16 million tonnes in 2024/25, with exports increasingly targeting the EU and China (USDA/IPAD).
The result is a peanut market where Mercosur, and Argentina in particular, is not just competitive, but structurally embedded in EU supply chains.
Cashews: A Niche Role, Not a Volume Story
In contrast, Mercosur’s role in cashews remains limited.
Brazil produced approximately 115,000 tonnes of raw cashew nuts in 2022/23, accounting for around 3% of global supply (Tridge). Brazilian cashew kernel exports have averaged only ~12,000 tonnes per year, and Mercosur’s share of EU cashew imports remains near 2% by value.
For comparison, Vietnam supplies roughly 72% of EU cashew imports, while West Africa accounts for around 10%, underlining the dominance of Asian and African origins. Notably, Brazil’s cashew sector has contracted in planted area by approximately 44% over the past decade, reflecting weak profitability.
Brazilian processors have nevertheless maintained exports, shipping ~5,000–6,000 tonnes of kernels between January and May in recent years, by importing raw cashew nuts from West Africa during poor domestic harvests. This positions Mercosur not as a supply origin, but as a niche processing hub within the global cashew chain.
Brazil Nuts: Climate Volatility and Secondary Supply
Brazil nuts present a different dynamic.
Although Brazil is the namesake origin, Bolivia accounts for approximately 54% of global Brazil nut exports, compared with around 11.5% for Brazil (World Export Data). EU imports follow a similar pattern, with Bolivia dominating supply and Brazil acting as a secondary source.
Brazil’s annual Brazil nut harvest averages around 38,000 tonnes in-shell, but output is highly volatile. The report notes that Amazon droughts have previously caused harvest collapses and price spikes of up to 60%, notably in 2017 (Independent). More than 95% of EU import value comes from shelled Brazil nuts, increasing sensitivity to processing and logistics disruptions.
Recent years have seen Brazilian exports rise in value rather than volume, driven by tighter supply and higher prices. However, EU sustainability and deforestation regulations are becoming a growing constraint, potentially limiting Mercosur-origin Brazil nuts unless traceability improves.
Macadamias: Marginal and Regionally Oriented
Macadamias remain a minor category for Mercosur.
Brazil produces approximately 6,200 tonnes of macadamias in-shell, equivalent to around 3% of global output (FoodNavigator). By contrast, Australia, South Africa, and Kenya dominate EU macadamia supply. Brazilian exports are small and largely consumed within the region, limiting Mercosur’s relevance in this segment.
Tariffs and the EU–Mercosur Agreement: Where the Leverage Lies
Under current EU Most Favoured Nation (MFN) rules, raw nuts enter the EU duty-free in almost all cases, including:
- 0% on cashew kernels (HS 080132)
- 0% on in-shell and shelled groundnuts (HS 1202)
- 0% on Brazil nuts and macadamias
(European Commission)
The real trade leverage lies in processed nut products. Prepared or roasted peanuts and peanut butter currently face EU tariffs of around 12% (The Rio Times). If the EU–Mercosur Free Trade Agreement is ratified, these tariffs would be eliminated, granting Mercosur exporters a significant margin advantage in value-added peanut products.
It is important to note that, as of 2025, the agreement is not in force, and any tariff changes remain conditional on ratification and phased implementation.
Climate Shocks and Substitution Effects
Recent climate events have reinforced Mercosur’s strategic importance, and its risks.
The report notes that Argentina’s 2023 peanut crop declined by approximately 40% due to severe drought, prompting EU buyers to temporarily source from higher-cost or lower-quality origins such as the US and Africa. Similar supply shocks in Amazon Brazil nut harvests during 2020–21 led to sharp price increases and substitution toward alternative nuts.
Substitution effects are already visible in EU food manufacturing. When tree nut prices rise, demand for peanuts, often referred to as the “value nut”, increases, supported by historical price correlations cited in the report. Mercosur’s cost-competitive peanut supply amplifies this dynamic, particularly if processed products become tariff-free under an FTA.
Why It Matters for EU-Focused Traders
For EU traders and processors, Mercosur represents both opportunity and concentration risk.
On the upside, tariff-free access to processed peanut products could reduce landed costs by 10–12%, materially improving margins or pricing flexibility (APC). Mercosur also offers logistical advantages, with shipping times to Europe of approximately 2–3 weeks, compared with 4–6 weeks from Asia, improving inventory responsiveness.
On the downside, EU peanut imports are already over 70% dependent on a single country, exposing buyers to climate and policy shocks. The report highlights how traders are increasingly hedging this risk by developing secondary origins while maintaining Mercosur as the core supplier.
Conclusion: Concentration Creates Leverage, and Vulnerability
Mercosur is not reshaping the EU nut market uniformly. Its influence is decisive in peanuts, secondary but climate-sensitive in Brazil nuts, marginal in cashews, and negligible in macadamias.
The data shows that Mercosur’s real power lies not in expanding raw nut volumes, but in controlling key supply chains and potentially capturing more value through processing, particularly if the EU–Mercosur agreement is implemented. At the same time, heavy reliance on a narrow set of origins increases exposure to climate volatility and regulatory risk.
For traders, the takeaway is clear: Mercosur is not a universal solution, but it is a strategic pillar in specific nut categories, one that demands active risk management rather than passive dependence.
To stay ahead of structural shifts across nut trade, from Mercosur-driven peanut dominance and climate-linked supply volatility to conditional tariff changes and substitution effects, visit our Market Insights page and subscribe to Rotterdam Commodity Trading’s Weekly Market Reports. Our analysis combines verified market sources with practical, trade-focused interpretation to help industry professionals navigate an increasingly complex global nut market.
We use cookies to ensure you get the best experience on our website. For more information, please read our Privacy Policy.