Almond Market Update – March 2020
The Almond Board of California released the February 2020 position report
Shipments were 201.78 million lbs. vs. 186.95 million lbs. in 2019 – a new record & an increase of 7.9% (+4.96% YTD)
U.S. +10.2% (+1.5% YTD)
Exports +6.9% (+6.5% YTD) The USD reversed against some currencies such as the Euro where it’s at 1.11 vs. 1.09 a month ago. Other currencies have been hurt by oil pricing or other global economic issues.
Western Europe -3% (+11% YTD)
China/HK/Vietnam -46% (-38% YTD) There is chatter they will be back soon, buying Australia or California origin.
India +63% (+11% YTD) The YTD consumption makes great sense but this huge gulp in one month is not going to help an already battered local market. Though we can keep in mind they may still be buying less Australian so need more from California.
Middle East / Africa +17% (+37% YTD) For a region of the world where the Almond Board is doing virtually no marketing or PR, the region is performing tremendously again this season.
Japan +11% (+11% YTD)
South Korea -12% (-5%)
Canada +3% (+7% YTD)
Crop Receipts per reporting to the Almond Board reached 2.530 billion lbs., up 268 million lbs. or 11.9% from a year ago. USDA reported receipts reached 2.539 billion lbs. Expectations are for final receipts of approximately 2.55 billion lbs.
Bloom is essentially over though some flowers are holding on. Overlap among varieties and bee activity were great. Despite superb day time temperatures, it was cool enough at night to give a reasonably lengthy bloom period. Some areas with strong Nonpareil crops, mainly the south and west, show a possibility of lower crop potential as it is difficult to put on two huge yields back to back. State-wide looks like an overall excellent bloom and crop potential. Now growers need to adequately feed and protect the developing crop. Fungicides are going out ahead of this weekend’s storms. The rain is welcomed after a very dry two months. The industry will be able to judge the crop better by our April report.
February sales & shipments exceeded expectations. (BULLISH)
February sales were an impressive record 191 vs. 150 million lbs. last February. During a very weak market, a lot of business took place.
Committed (Unshipped) reached 589 million lbs., up 17.4% from a year ago (BULLISH). Uncommitted Inventory is 736 million lbs., up 9.8% from a year ago. (BEARISH)
Sold Position: If we have a 2.55 billion lb. crop, the industry is approximately 73% sold on total supply, similar to a year ago (NEUTRAL TO BULLISH).
CROP RECEIPTS were on the low end of expectations for the first time in months (BULLISH).
Coronavirus Impact: Getting containers and space on vessels is complicated by the world trade issues associated with coronavirus and many containers stuck in China, however, we are finding ways to get product shipped. Those most vulnerable to the coronavirus are people with cardiovascular disease or diabetes (followed by some other conditions), and eating almonds and some other tree nuts helps with these two diseases. Almonds store well and consumers can buy them on-line in many countries now, including China where online nut purchasing is popular and growing. On the flip side, a weak global economy is not good for tree nut consumption. The stock market falling 10% today isn’t helpful. It’s too early to know the impact of coronavirus on almond consumption.
Contracts: After the recent drop in the nut markets, we heard of two defaults, one in Dubai and one in India, reported by others in the nut industry. Some 3-4 buyers have come to us to ask for “help.” For buyers considering asking, we can let you know ahead of time, we cannot renegotiate contracts up or down, and asking just leaves a worse impression with your supplier(s). Confirmed defaulters are featured in our newsletter in an effort to encourage transparency and integrity in the industry. Prior defaults: Rishi Goenka of Anukal Agrotech Pvt Ltd. of Jaipur India in 2015 and Frutta Secca DiSano Srl from Milan Italy in 2012.
A big thank you to our valued customers that honor all their contracts in good times and bad. Likewise, you can expect the same high quality from RPAC in all market conditions.
OUTLOOK: We believe today’s report is positive. Shipments are ahead by 70 million lbs. YTD and forward sales are ahead by 87 million lbs. YTD. We anticipate a good to great shipping month for March. We may be on track to ship 2.4 billion lbs. and carry out about 400 million lbs. If steady buying interest continues, we may see a slight increase in pricing. Today’s pricing is slightly below what some consider the state average break-even for growers (where half are making money or breaking even, and half are breaking even or losing money). A bump in pricing could bring more grower support and balance to the market. New crop is trading in limited quantities at slightly below current crop levels.
Lastly, the Almond Board is launching new marketing campaigns including Do You Almond? Gotta love the Brit’s sense of humor.
Paul Ewing Dennis Soares
Further info: February 2020 Position Report
March Position Report – Thursday April 9, 2020