November 11, 2016
Senior Vice President
The Almond Board of California October position report issued on Tuesday, November 8, shows record shipments for October of 235.5 million pounds. This is an increase of 45% compared to last year, and surpasses the previous all-time high shipments in October 2013 of 228.6 million pounds. Year to date shipments reached 607.1 million pounds for Aug – Oct compared to 431.7 million pounds last year, an increase of 40%. Global markets have responded to affordable prices from an increase in demand since last January. Inshell shipments of 57.7 million pounds are up 27 million pounds, 90% over last year. India and China have led the way filling the pipeline for Diwali and Chinese New Year. Early shipments of Nonpareil inshell and kernel have been a primary driver of the record early shipments.
Commitments to date are at 587.4 million pounds compared to 445.9 million last year, an increase of 32%. Commitments for October are 183 million pounds compared to 168 million pounds last year, up 9%. With receipts tracking to a crop slightly above the 2.050 billion pound NASS Objective Estimate, the 2016 supply is nearly 50% committed after 90 days of reporting.
Global markets show strong growth across multiple regions. The U.S. market continues to rebound, up 19% in October and 14% YTD. Some switching into almonds from higher priced cashews is occurring for mixed nut producers. Shipments to China & Vietnam are twice what they were last year. India is tracking up 64%. EU shipments are up 20%, aided in some part by the smaller than expected Spanish crop. Finally, the Middle East and Africa regions finished the first quarter up 125%.
Combined shipments and commitments are 36% higher the last year, and 10% higher than the record levels through October on 2013 Crop.
|Market Perspective –
2016 crop pricing has been rising steadily as California almond shipments have roared back from two years of suppressed supply that generated an extended period of historically high prices. Early 2016 crop commitments were made at very attractive prices to buyers after a market correction on the 2015 crop. Almond prices since June have been in a stable but gradually increasing range.
The strong early demand assures that a 2.4-2.5 billion pound supply will be readily absorbed. Prices for delivery in this crop year should continue firming, with the next inflection point hinging on winter weather, water supply, new acreage, and the resulting prospects for the 2017 crop.