Bill Morecraft
Senior Vice President
Shipments for August as reported by the Almond Board of California did not disappoint, hitting 193 million pounds. With the first month for the new crop year in the books, shipments increased 30.7% over August last year. A strong shipment number was expected with the combination of early new crop inshell shipments and old crop inventory being shipped out in August. Export shipments reached 127.1 million pounds, up 49.7%. Domestic shipments were 65.9 million pounds, up 5.5%.
Commitments have already crested 1 billion pounds, up 88% over last year. The industry has been busy through the spring and summer as the result of 3 billion lbs. Subjective and Objective estimates. The domestic market reports commitments of 412.9 million pounds, an increase of 89.4% over last year. Exports markets have 642.6 million pounds on the books, an increase of 87.2% over last August.
Receipts for August are above last year by 35.8%, due largely to an earlier start to the harvest. The Objective estimate of 3.0 billion lbs. appears to be a realistic expectation at the onset of harvest. After a spectacular bloom and summer months, California has been hit by fires during the harvest season. While orchards are in no danger from the fires, the impact from the smoke has been significant resulting in lower temperatures and higher dew points. This is slowing the natural drying process for the almonds before they are picked up, causing some issues with hull moisture at the huller/shellers.
Inshell was the primary driver for the strong shipments. Last August 22.2 million pounds of inshell was shipped, this year the industry has already shipped 44.9 million pounds. India has been the benefactor for these shipments with 40.5 million pounds of inshell shipments, an increase of over 105% from last year. Shipments to India for September and October are also anticipated to be very strong. The local market in India has been relatively tight due to logistical/Covid issues during the spring and summer. A combination of pent up demand, attractive prices, natural growth in the market and the fall festive season have contributed to a strong demand in a short period. India continues to show potential to grow year over year. Shipments to China are up 50% with 4.4 million pounds over last year with the inshell and kernel shipments split evenly. Adding in the volume from Vietnam, the market in China is seeing a nice uptick compared to 2019.
Other regions with strong shipments include Western Europe with an increase of 29%, shipping 47.5 million pounds. The increase is primarily due to shipments to France, Germany, Italy, Netherlands, and Spain. Middle East/Africa shipments are up 46% at 9.9 million pounds.
The industry will have more data on crop characteristics once more is harvested and processed. However, at this early stage there are warning signs in regard to kernel sizes. Early processing reveals a significant drop in CPO sizes 23/25 AOL for Nonpareil. It is projected that the same issue will exist for other varieties as well. Price differentials for larger almonds reflect the limited early availability.
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Market Perspective Strong short-term demand has been reflected in firming prices. Expect September shipments to mirror the jump seen in August. The large early commitments leave the almond industry with limited nearby capacity. The downward shift in CPO sizes has further exacerbated the situation. Stable pricing will continue until such time as the pressure on the supply chain relaxes. |
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