Almond Market Review – April 2018
The Almond Board of California released the March 2018 position report
March shipments were 193.9 million lbs. vs. 178.2 million lbs. in 2017 – up 9%
U.S. shipments: +12.6% (+6.6% YTD)
Exports: +14% (+7.1% YTD).
Another impressive month, with the domestic market showing its best month (vs. last season), since November.
India shipments were down but above industry expectations. This and the much smaller South Korean market are working through inventory.
China/HK sales are up 22% YTD, already surpassing last season’s 12-month total in the first 8 months. China’s additional 15% tariff (from 10 to 25%) brought limited concern to the market for almonds and potentially higher concern for other tree nuts where China represents a larger share of shipments. China represents about 10% of California almond shipments. We do not anticipate a major impact on the market from China tariff movements, with some demand shifting to Australia that should swing other regions’ demand to the U.S.
Europe, up 15% YTD, showed another solid month, up 17%
New sales of 112 million lbs. were identical to February and very slow for a March, as sellers were hesitant early in the month and then buyers backed away since mid-March.
The most common feedback from growers is that the crop looks better than it did a few weeks ago, and it’s highly variable. Industry wide optimism has been increasing continually and considerably since the highly concerning frosts occurred. Due to the high variability and unusual factors this year, many think this will be one of the toughest crops to estimate.
Similar to last year, this mild spring weather is conducive to large kernel size, good production potential next season,higher percentages of doubles, and later harvest timing.
REVIEW & OUTLOOK:
Shipped/Committed reached 2.058 billion lbs. (up 171 million lbs. from a year ago). This is 79% of total supply (using a 2.26 billion lb. crop) or 93% of the saleable 2017 crop.
With limited buying interest for the past month, pricing softened about .20/lb. With increasing optimism regarding the crop size, some expect further softening in the market, but its unclear how likely, long lasting and/or extensive it would be, due to the very tight supply until new crop.
If shipments were flat vs. last year for the remainder of the season, the carry out would be approximately 343 million lbs., if up 6% then 304 million lbs., and shipments continued the 12% growth, the carry out would be 266 million lbs. (we haven’t heard anyone say they think so low is physically possible). We will use the middle number for supply/demand scenarios.
|% Change Supply Vs. Prior||4.5%||-2.1%||1.7%||5.4%|
If shipments were flat for April-July, it only changes the supply growth above by 1.5%. With 16% growth in demand for the 2016 crop year, and 12% growth YTD, the industry should hope the increasingly optimistic expectations hold true for the 2018 crop. With continued large increases in bearing acreage in the near future, the industry would like to continue growing demand in the coming season.
NASS Acreage Report – April 25
NASS Subjective Estimate – May 10
April Position Report – May 11