Almond Industry News Update 17.09.24

The California almond industry kicked off the 2024 crop year with August shipments totalling 168.3 million pounds, reflecting a 6% drop from the previous month and a 21% decline compared to last year. Domestic shipments remained strong at 62.1 million pounds, a 1% increase over the previous year. In contrast, exports slowed to 106.2 million pounds, a 29% decrease year-over-year. Overall, shipments fell short of expectations due to sluggish exports, driven by tight inventories at the close of the 2023 crop year. However, with new crop inventories now available, shipments are expected to rise in September.

Shipments

India: India started the crop year on a strong footing with shipments reaching 27.9 million pounds, a 24% increase from the previous year. After a slow July, market activity picked up throughout August, driven by shrinking local inventories and extended transit times, which led to firmer prices. Demand is projected to stay strong through October and into November as the market gears up to meet post-Diwali needs.

China/Hong Kong/Vietnam: Shipments to the region totalled 5.5 million pounds, a 35% drop from last year. Chinese buyers are increasingly favouring Vietnam due to its duty advantages, with Vietnam receiving 3.8 million pounds of the total, a 71% increase year-over-year. Buyers have returned to the market, encouraged by the belief that prices are unlikely to drop soon. The Mid-Autumn Festival (September 15-17) will be closely watched for consumer demand insights, as this holiday—preceding Chinese New Year—will significantly shape buying activity in the lead-up to the festival.

Europe: Shipments to Europe reached 38.7 million pounds, marking a 40% year-over-year decrease. European market activity has slowed, with buyers adopting a cautious approach and making only minimal purchases, anticipating potential price softening. This hesitation has limited significant buying beyond immediate needs. However, as prices hold steady, increased buying is expected as the region prepares for holiday demand.

Middle East: Shipments to the Middle East totalled 10.2 million pounds, down 41% from the previous year. This decline was expected as buyers held off purchases, waiting for price softening at the close of the previous crop year. With local supplies dwindling, buyer activity has recently picked up, with requests for prompt shipments. Demand is forecasted to remain strong in the coming weeks, driven by the early arrival of Ramadan in 2025 and the need for buyers to secure supplies well in advance due to longer transit times.

Domestic: In August, domestic shipments totalled 62 million pounds, a modest 1% increase from the previous year. After a volatile year in monthly shipments, the domestic market showed a positive start, despite tight inventories of high-demand products. New sales for the month were 9.1 million pounds, though total commitments were down 26.8% compared to last year. On the bright side, recent weeks have seen an uptick in sales as buyers adjust to post-Objective Estimate pricing. With significant demand still unmet for the current crop year, buyer activity is expected to remain strong.

Commitments

Total commitments for the year begin at 607.6 million pounds, a 2% decrease from the previous year. Uncommitted inventories, however, have dropped significantly to 11.1 million pounds, down 68% year-over-year. New sales have also seen a sharp decline, falling 62% to 159.3 million pounds, as buyers hold off on purchases, expecting lower prices. With the crop forecasted at 2.8 billion pounds, current shipments and commitments represent 24% of the total supply, down from 26% last year. Despite the 2% decline in industry commitments, lighter destination inventories compared to last season, combined with increased demand for prompt shipments, are expected to help the industry close this gap and recover lost momentum.

The most notable surprise in the latest position report was the carry-in figure. July’s carry-out was adjusted based on an actual loss and exemption percentage of 2.1%, setting the carry-in at 503 million pounds—significantly higher than industry expectations. This was largely due to the lower quality of the 2023 crop, which had an average reject rate of 4.2%.

Crop

Crop receipts for the year have started at 290.1 million pounds, a significant 314% increase from the previous year, which saw a harvest delay of 2-3 weeks. However, recent concerns over lower yields in the southern region of the valley have raised doubts within the industry about the likelihood of reaching the projected 3.0-billion-pound crop. Some are even speculating that the final yield may drop below 2.8 billion pounds. As a result, California packers are taking a cautious approach, holding back on offers until there is more certainty about the new crop’s potential.

via Blue Diamond Growers