Almond Market Review – October 2018
The Almond Board of California released the September position report
Shipments were 168.8 million lbs. vs. 190.6 million lbs. in 2017 – down 11.4%
U.S. down 0.7%
Exports down 15.2%
Western Europe +8% (-16% YTD) China/Vietnam/Thailand -38% (-5.7%YTD) India +11% (+10% YTD)
Middle East / Africa -52% (-51% YTD) Japan -16% (-17% YTD) Canada +4% (+4% YTD)
South Korea -8% (+24% YTD) Central/Eastern Europe -22% (-33% YTD)
Harvest is nearly complete. The rains last week slowed the completion.
Insect Damage at 1.8% worsened but is still below the 2.35% from a year ago.
Stick Tights – like those pictured to the right, are more prevalent this year. These cause additional chipping when shelling and left many Carmel type variety nuts still on the tree. The high stick tight count this year also contributes to a reduced ability to make inshell out of as much volume.
Kernel size: Following a very hot summer, kernel sizing seems smaller than NASS estimated. This is most noticeable in the smaller Cal varieties like Butte/Padre/Fritz where 27/30 and 30/32 are tough to come by until more sizing is completed.
Doubles are high again but not too significant on the west side of the valley.
Crop size (volume) expectations declined as we got further through harvest. NASS’ objective forecast gross receipts were 2.45 billion lbs. Due to the light crops reported in most areas except the east sides of Merced, Stanislaus, and San Joaquin Counties, most handlers are expecting a crop in the 2.35 billion lbs. range.
15 year AVG shipment growth rate: 6%
Over the past 15 years, 10 years had pricing at or below current levels resulting in shipments growing by an average of 9%
Projected Total Supply Growth if 2.45 Billion lb. Crop (Objective Estimate): 5.6%
………if 2.35 Billion lbs. (current expectation): 1.8% …….if 2.30 Billion lbs. (Subjective Estimate): 0%
The industry’s demand growth history and the expected supply growth are not matching up with the current low prices. However, what is unique presently is the concern about the impact of the trade wars / tariffs / currency issues. How much of the shipments being down 10% YTD is due to the trade war related issues (including currency devaluations in Iran and Turkey), and how much is due to a weak market sentiment and pricing trends?
The talk of large crop potential for 2019 is also playing into the market but the world cannot consume the 2019 crop until next season. This past summer the industry already took the carry-in and the pipeline to such low levels that we do not anticipate being able to reduce that much further.
September shipment expectations were low but today’s figure came in below expectations.
September sales of 211 million lbs. were at the low end of expectations as well.
Committed/Shipped reached 880 million lbs. This is approximately 37% of the projected marketable crop.
At the current low pricing, sales and shipments should get back on track soon.
Paul Ewing Dennis Soares
Further info: September 2018 Position Report
Upcoming news: October Position Report – November 9