December 9, 2015
Bill Morecraft
Senior Vice President
Overview –
Projections for the 2015 California almond crop shifted this week to a crop between 1.8 and 1.85 billion lbs.
November shipments were slightly below initial expectations due in part to requests for delays in shipments and the cloud hanging over Dubai and India due to containers left unclaimed. The current difficulties will be short lived, as both markets are capable of quickly adjusting back to normal demand patterns once existing inventories are cleared. Even with flat monthly shipments vs. last year, the YTD gap dropped to just over 12% behind last year.
Shipments to the U.S. market have decreased moderately, but significant forward demand remains as both buyers and sellers have been reluctant to book long term. Inventory levels in both Dubai and India are relatively low. Inventories in China are low as Chinese New Year approaches. Europe also has light coverage into spring and summer. In all markets, second half consumer demand remains uncovered.
Prevailing price levels are not the primary barrier to future consumption. However, buyer confidence has been impacted by both 2015 crop price fluctuations and the uncertain performance of weaker players in the supply chain, unwilling or unable to keep their commitments. Shipments compared to the prior year will make up significant ground between December and February. Until then, buyers and sellers will proceed cautiously.
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Market Perspective – With prices currently lower than at the same time last year, buyers with short inventories will only return to the market strongly when they see stable to rising pricing. Until we see upcoming winter weather patterns and the February bloom, buyers and sellers will remain relatively cautious. Happy Holidays and best wishes for a Healthy and Prosperous New Year!
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