Laura Gerhard
Vice President

OVERVIEW

Following three record-setting months industry shipments softened in April, registering 197 million pounds. This is 20% lower than last year and falls short of industry expectations. Export shipments for the month were 140 million pounds, down 35% to last month (a crop year high) and 23% to the prior year. Exports have been resilient this year and are now 7.6% ahead of last season after nine months. This is a bright spot for the almond industry as it continues to drive the carryout down to more manageable levels. Domestic shipments continue to lag at 56.8 million pounds, down 9% to last year. Overall, total shipments remain in positive territory ahead of last year at 3.5% year-to-date.

SHIPMENTS

India: Shipments to India were 20 million pounds for the month, down 28.7% to last April. The market now sits 2% up for the year. Like many global markets, local inventories are healthy and are being purchased at lowers levels. With prices from California rising over the last six weeks, the market has seen local pricing follow. With a later Diwali next season we expect to see lighter shipments versus a year ago for the duration of the crop year.

China: Shipments to China were 10 million pounds, 47% higher to last April. Year-to-date shipments are now 21% over last crop year, which is impressive considering this market was behind as much as 24% earlier in the crop year and it serves as a reminder of the demand potential going forward. Local inventories are healthy and are being purchased at lower prices compared to today’s market which has limited buying activity from California and Australia in recent weeks. Offers have firmed on news of a shorter crop and quality falling short of Chinese expectations.

Europe: Shipments to the European market were 50.9 million pounds for the month, down 28% versus last April. The market now sits 2% down for the season. With offers from California rising nearly $0.50/lb over the last two months, this market has pulled back on additional coverage. With shipping challenges largely out of the way and higher origin pricing, it is unlikely that the market will repeat last year’s strong shipment levels and return to a more normal shipping pattern as we move in to the 2023 crop. Fall and 2023 holiday demand remains uncovered, and it is likely that Europe will need to purchase additional coverage in the next six to eight weeks.

Middle East: After outperforming the first eight months of the crop year the Middle East saw a slowdown in purchasing with April shipments from California recording 17.9 million pounds, down 47% to last year. Lower and affordable almond prices have fueled demand, putting year-to-date shipments 38% ahead of last year. In this market (unlike Europe and US) the weaker price hits the store shelf quicker, directly benefiting the consumer. This is a positive sign for future demand.

Domestic: Key channels and categories driving almond consumption continue to face headwinds with inflationary pressures affecting consumer spending habits. Retailers are also taking the opportunity with the higher costs to reduce stocks back to pre-pandemic levels compared to the high levels of finished good stocks on-hand during COVID. As a result, the domestic market continues to struggle with shipments down 9% for the month and 6%  year-to-date. Expectations are for current demand patterns to persist for the balance of the crop year.

 

 

COMMITMENTS

Commitments are at 565 million pounds, down 25% to last year. Uncommitted inventory sits at 789 million pounds, 2% higher compared to last year. Market activity was limited in April as evidenced by new sales at 115 million pounds, down 32% to last year and the lowest figure for the month since 2017. Uncertainty surrounding the 2023 California almond crop has firmed offers as packers take a cautious approach. Demand is thin at the moment with buyers mostly covered in the short term.

Shipments are expected to wane in the final three months of the crop year. Current predictions for the carryout are above 700 million pounds with some predicting lower and others slightly higher. This is a big improvement over last year’s record carryout and puts the industry in a more manageable position heading into the next crop year.

CROP

The 2023 Subjective Estimate was released on May 12 with the NASS forecasting a 2.5 billion pound crop against 1.38 million bearing acres. This implies a yield of 1,810 pounds per acre, the lowest since 2005. Many note that the crop is at least two weeks behind last year’s pace, potentially setting the industry up for a later harvest.

Assuming crop production on the high end of estimates at 2.5 billion pounds, the industry should achieve the desired result of further driving down the carryout to more comfortable levels to end the next crop year. At a minimum this lends to price stabilizing at the new levels we are seeing today.

Market Perspective Shipments eased off their recent record-breaking pace but remain ahead of last year’s pace. Prices have firmed on concerns of a smaller 2023 crop. This has limited activity for buyers and sellers alike as the market processes all the new information and forecasts from recent weeks. While lower shipments are expected in the final three months of the crop year the industry is in a good position to improve the carryout to a more comfortable level. Given the lack of new sales in recent months, it’s clear that many markets remain uncovered into new crop. Price discovery will be difficult in the short term as market participants continue to wait for more guidance on the upcoming crop. Current concerns should limit downside price risk until more information is available. There’s a lot of time left before harvest and the industry’s focus will mainly be on crop development. The Blue Diamond team will be attending INC London. We hope to see you there!

 

To view Blue Diamond’s Market Updates and Bloom Reports Online Click Here

To view the entire detailed Position Report from the Almond Board of California Click Here

 

Laura Gerhard
Vice President

OVERVIEW

Shipments for the month of March exceeded industry expectations while setting a record for the third consecutive month as the industry topped with 281 million pounds.  This is 14.4% higher to last month and 14.7% higher to last year.  Export shipments continue to gain momentum having now improved month over month for four consecutive months.  This is the strongest export performance of the year at 215 million pounds which is up 14.0% to last month and 24.0% to last year.  The Domestic market also saw month-over-month growth with 66.4 million pounds of shipments, up 15.6% to last month, but down 7.5% to last year. This now puts total shipments at 1.8 billion pounds, ahead of last year by 6.8%.

SHIPMENTS

India: Shipments to India were 27.5 million pounds for the month, down 19.6% to last month and up 15.0% to last year.  India has shipped a consistent 32 to 35 million lbs for the prior 6 months.  With pricing for inshell firming over the course of the last 6 weeks, we have seen the market pull back on purchases resulting in a lower shipment number for the month.  The market still has demand to cover for the May/June shipment period and is expected to come back in the coming weeks to cover their future demand.

China: Shipments were strong for a second consecutive month at 24.7 million pounds. This is up 13% to last month and 275% to last year. YTD shipments to China now outpace last year by 19% after having trailed for the first half of the crop year. Buying activity has gone quiet after 3 months of active purchasing to restock supplies following the removal of COVID restrictions. This has resulted in local market prices being lower than California offers further muting demand. Australia is now offering to China although limited business has been done given weak nearby demand. The market is expected to remain calm as it enters the quiet period of the late spring and summer months.

Europe: Shipments to the European market were down 8% for the month compared to last year. Processors and traders throughout the region took longer positions in January at the lower levels. Overall, European demand is subdued given continuing macroeconomic challenges throughout the region.  Purchasing in Europe has backed off over the last month as pricing firmed.  Europe will likely continue to be challenged to reach last year’s robust shipment numbers for the upcoming months.

Middle East: Shipments to the Middle East continue at an exceptional pace with the market now up 59% year to date and March up 90% to last year.  The Middle East has continued to be a strong driver of global consumption this season as low market prices have driven exceptional volume year-to-date.

Domestic: Domestic shipments were recorded at 66.4 million pounds, a 7.5% decline versus last year.  Key channels and categories driving almond consumption continue to face headwinds with inflationary pressures affecting consumer spending habits. Expectations are for current demand patterns to persist for the balance of the crop year.

 

COMMITMENTS

March commitments now sit at 647 million pounds which is down 22% to last year. New sales for the month were disappointing at 143 million pounds, down 35% to last year. This can be attributed to reduced activity from buyers and sellers alike given the uncertainty of new crop production resulting from the unfavorable bloom weather in February and into March.  Uncommitted inventory is now 881 million pounds, down 5.9% to last year. Sold and shipped as a percent of the total supply (assuming a 2.55 billion pound crop) is 73.3% compared to 72.5% last year.

CROP

Many in the market are anxious to understand the effects of the unfavorable bloom weather on the 2023 almond crop. We are still weeks away from understanding the impact on production and ultimately its effect on price. The industry will continue to monitor the progress of the crop while various estimates will be released in the coming weeks offering some additional forecast and perspective, inclusive of the NASS Subjective estimate on May 12.

Market Perspective Shipments continued their strong pace in March turning in another season high and third consecutive month of record shipments over the prior year. Strong sales activity in December and January pushed shipments in both February and March, allowing the industry to maintain momentum to date. Export shipments continue to lead the way and are now ahead of last year’s pace. Domestic shipments continue to lag. Leading up to the almond bloom, prices had been relatively stable. Price has firmed in recent weeks given the poor bloom weather received in February and March. This has dampened buying and selling activity in the short term as evidenced by the low new sales figure reported for the month. Favorable uncommitted inventories and strong shipments to date have set the industry up well to draw down the carryout to more manageable levels. The industry focus is on closing out the balance of this crop year as the market awaits news on the 2023 crop. As California turns to warmer and drier weather, the market continues to monitor the progression of the 2023 crop. It will take weeks to understand the impact of the unfavorable bloom weather and what it means to almond production. The industry’s first official estimate (NASS Subjective Estimate) will release on May 12 and attempt to offer a glimpse of what to expect for the upcoming new crop.

To view Blue Diamond’s Market Updates and Bloom Reports Online Click Here

To view the entire detailed Position Report from the Almond Board of California Click Here

 

Laura Gerhard
Vice President

OVERVIEW

February marked a second consecutive month of record shipments at 246 million pounds as the industry improves its pace in comparison to last year. This is 7% higher to last month and 23% higher to last year. Shipments were mainly in line with industry expectations. Export shipments improved for a third consecutive month bringing the best performance of the crop year at 188 million pounds which is 15% higher than last month and 29% higher compared to the prior year. Domestic shipments came in at 57 million pounds which is 14% lower to last month but 8% higher than last year.  

SHIPMENTS

India: Shipments were 34.2 million pounds for the month of February, up 69% from same month last year. The Indian market has been remarkably consistent this season, shipping between 32 and 35 million pounds for six of the seven months of this crop season. Year-to-date shipments to India are up 5%. As we head into the tail end of the California crop season, demand remains healthy for the balance of the crop as pricing firmed coming out of bloom. 

 China: Shipments were 21.9 million pounds, a season-high and a 274% increase over the prior month. After trailing as much as 24%, China is now on par with last years shipment pace. Buyers remain active as market demand normalizes and adjusts following COVID. Attention is turning to the Australian crop with first shipments of new crop expected to arrive end of March when buyers will get their first look at quality.  

 Europe: Shipments to the European market were down 17.6% for the month compared to last year. Processors and traders throughout the region took longer positions in January at lower levels. These positions will ship over the coming months but overall demand in the European market remains subdued with expectations of holiday retail supplies lasting through Easter. Although the market is selling through its longer position, in-market inventories remain plentiful with many in the market being well covered after strong January purchasing.  Much of the European market has backed off as prices have firmed. 

  Middle East: Shipments to the Middle East remain strong with the market up 54% year-to-date and up 112% for the month compared to last year. Strong traditional consumption throughout the Middle East and Central Asia has been buoyed by low market pricing to consumers throughout the region, which in turn has driven exceptional volume year-to-date. With Ramadan around the corner, strong consumption should persist into the coming months. 

 Domestic: The domestic market posted 57.4 million pounds in new shipments in February. This performance is 8% higher versus last year closing a portion of the gap. The year-to-date total is now 5.5% behind last year. As the region and food manufacturers continue to battle the effects of inflation, overall consumption remains challenged with attractive market levels not passed through to the end consumer as seen in other global markets. 

 

COMMITMENTS

February commitments took a step back at 785 million pounds which is down 8.5% to last year and new sales for the month were 190 million pounds, down 11.5% to last year. Uncommitted inventory incrementally improved to 1.0 billion pounds, down 12.2% to last year. Sold and shipped as a percent of the total supply (assuming a 2.55 billion pound crop) is 69% compared to 66% last year.

CROP

2022 crop receipts total 2.52 billion pounds after February receipts which is down 12.8% to last year. The crop appears to be settling near 2.55 billion pounds.  

Attention is currently on the weather and its potential effect on the 2023 almond crop. California is receiving some much-needed rainfall, but unfortunately, it coincided with the almond bloom. Wet weather along with cold temperatures have limited bee flight hours for much of the bloom. California is expected to receive additional precipitation over the next 7 days. The first clue of the effects to the crop will be the end of April but in reality, will take many more weeks to understand the full impact to production

Market Perspective Shipments continue their strong pace with February recording the best performance of the crop year. Momentum continues to build in the export market with shipments building on last year’s performance to date. The Middle East continues to impress coupled with a China market positioning itself for post-COVID demand. Global buyers have taken advantage of affordable pricing as evidenced by recent months’ shipments. As a result, the price has stabilized and even firmed across the almond complex. New sales for the month were lighter versus last season as the industry reacted to unfavorable weather during peak bloom which discouraged activity in the back half of the month. Market prices have firmed in light of the uncertain impact to crop production. With the 2022 crop closing in on 2.55 billion pounds, the industry turns its attention to the final stages of the almond bloom. Cold temperatures and rain are forecasted to endure for the remainder of the bloom period. It will take weeks to understand the true impact of this event and what it means to 2023 almond production.

To view Blue Diamond’s Market Updates and Bloom Reports Online Click Here 

To view the entire detailed Position Report from the Almond Board of California Click Here