Laura Gerhard
Vice President
OVERVIEW
Industry shipments for the second month of the crop year totaled 213.6 million pounds, reflecting a 27% increase from last month, though 2% lower than the same period last year. Exports rebounded significantly to 157.6 million pounds, marking a 48% increase from last month and a 2% rise compared to last year. In contrast, domestic shipments were lighter, totaling 55.9 million pounds, down 11% year-over-year. For the second consecutive month, total shipments fell short of expectations. However, exports are gaining momentum following a slow start due to limited supplies. With many regions holding minimal inventories and requiring coverage for upcoming holidays and festivals, exports are anticipated to rise in the coming weeks.
SHIPMENTS
India: Shipments for the month totaled 44.6 million pounds, a decrease of 13% compared to last year. Year-to-date shipments are down 1%, totaling 72.8 million pounds. Buying activity has slowed in recent weeks, with a noticeable shift towards selling. However, sales are reportedly performing well and, more importantly, have been profitable. New crop shipments are now arriving based on contracts secured earlier in the summer at favorable prices compared to current California and local market prices. As traders capitalize on these advantageous cost positions, ongoing profit-taking is expected to keep products moving to market. Accordingly, buyers are anticipated to return in the coming weeks and resume their purchasing activity.
China/Hong Kong/Vietnam: Shipments to the region increased to 14.7 million pounds, marking an 11% rise from last month. Year-to-date shipments total 20.2 million pounds, trailing last season by 7.1%. Overall buying activity has remained subdued, with most buyers adopting a cautious approach. However, consumer demand during the Mid-Autumn Festival performed well, generating positive expectations for the upcoming Chinese New Year holiday. An increase in demand is anticipated as China seeks to secure additional coverage ahead of the festivities.
Europe: Shipments to the region reached 30.9 million pounds, reflecting a 25% decrease from last year. Year-to-date shipments total 69.6 million pounds, down 34% compared to the previous year. Activity remained steady throughout the month, with buyers primarily focused on meeting their immediate needs. However, they continue to approach the higher prices offered by California with caution and skepticism. Some buyers attempted to source Spanish almonds, but availability was limited. As inventories remain low, demand is expected to persist, especially as the need for additional coverage increases ahead of the upcoming holiday season.
Middle East: After a slow start in the first month, shipments to the region rebounded sharply in September, reaching 38.1 million pounds—an impressive increase of 110% compared to last season. Year-to-date shipments now total 48.3 million pounds, reflecting a 36% rise. Despite firmer prices in recent weeks, market activity has increased as buyers work to meet their Ramadan needs. Demand is expected to remain strong, with some participants still seeking holiday coverage and planning to secure shipments for the November-December period. Stable prices should further bolster demand in the coming months. However, in the Levant region, business is proceeding cautiously as the ongoing conflict continues to impact buyers’ purchasing behavior.
Domestic: September shipments totaled 56 million pounds, which is 11% lower than last year, resulting in a year-over-year decrease of 5%. After an increase in August, it seems we may return to the monthly fluctuations we experienced last year. New sales for the month rose by 8%, reaching 83.2 million pounds, although total commitments are down 18.8% year-over-year. Buyers are still adjusting to the firming price levels and are taking their time to decide when to make purchases. The domestic market remains uncovered in anticipation of future demand and expect total commitments to continue increasing in the coming months.
COMMITMENTS
Total commitments currently stand at 667.4 million pounds, representing a 1% decrease from last year. However, export commitments have increased by 10.2%, indicating low inventories at destinations and a greater need to move product through the pipeline. Uncommitted inventory has risen by 51% to 467.7 million pounds, attributed to an earlier harvest compared to last year. New sales reached 273.4 million pounds, reflecting a 1% increase from last year, with export sales comprising the majority at 190.1 million pounds. Assuming a 2.8-billion-pound crop, current shipments and commitments account for 32% of total supply, compared to 34% last year.
CROP
After two months, crop receipts have reached 1.04 billion pounds, with the harvest estimated to be over 50% complete. Yields in the southern regions are falling below expectations, while reports from the central and northern growing areas are more favorable. Many in the industry are skeptical that the 2024 crop will exceed 2.8 billion pounds, with some predicting it could be even smaller. While it is still too early to make a definitive assessment, the industry should have a clearer picture by January.
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Market Perspective The crop year continues to yield mixed results. While shipments have fallen short of expectations, prices have remained stable. California packers are limiting their offers as they await clearer insights on the crop, and buyers are hesitant to accept current prices, opting for a hand-to-mouth approach. Despite lower shipments and limited demand, prices have held firm, indicating that supply is more in line with demand compared to recent years. With all major regions reporting a need for additional coverage ahead of the holiday and festival season, prices are expected to remain supported through November and into December. |
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