Almond Market Update – September 2022
The Almond Board of California released the August 2022 position report
Shipments were 228.3 million lbs. vs. 207.4 m. in 2021 – UP 10% for the first month of the crop year
Western Europe +5%
Middle East / Africa +250%
China / Hong Kong/ Vietnam +17%
South Korea -47%
Central / Eastern Europe +120%
Latin America / Caribbean +21%
The Objective Estimate of 2.6 billion lbs. seems more widely accepted. As usual, we saw improvements in Nonpareil yields as we get further through harvest, but pollinators are not off to a great start. We believe the frost hit more of the central valley than was thought prior to harvest. Sizing generally is small once again and insect damage so far is up slightly.
August Shipments – Surpassed expectations and set a record. Rollovers from July were significant. India being down is a positive signal for that market as upcoming shipments and activity could pick-up for the region. We estimate the growth in the China region will continue.
August Sales were 196 million lbs. vs. 138 million lbs. in August 2021.
Committed (Unshipped) stood at 614 million lbs. – down 14% from a year ago.
Sold / Shipped Combined was 842 million lbs. – down 8.8% from a year ago.
The Industry Sold Position was 24.9% of total supply – down slightly from 26.6% a year ago.
Buying interest was solid during August. Strong selling interest seemed to allow a large volume of business to take place without the market firming.
POSSIBLE SUPPLY DECLINE – The Objective Estimate of 2.6 billion lbs. would give a total supply this season of 3.385 billion lbs., down about 87 million lbs. or 2.5%. In other words, despite a historically large carry-in, the total supply may still be down for this season due to the forecasted lower crop.
EXPECTED DEMAND GROWTH: 2021 Crop Year Shipments were particular slow due to several factors; the high opening prices beginning last July (we are starting low this season), buyers were very full of almonds at the start of that season (we believe the supply chain is filled up in some areas but not as full as a year ago), and the major logistics issues (which are not ironed out but have improved). Our major issues from last season have improved, though we are now facing a stronger USD and worse inflation / economic conditions than a year ago.
Overall, we still expect shipments to grow, particularly with such low starting prices. If we can get back to shipment levels seen with the 2020 crop year, we would be looking at a much smaller carryout into the 2023 crop, and an improved market situation. But first it seems the industry needs to show some continued strong shipments. Storage constraints likely kept sellers motivated during August and should continue to for several more months. At the same time, buyers should continue to participate at these heavily discounted almond prices.
Paul Ewing Dennis Soares
September Position Report – Tuesday October 11, 2022