California Almond Shipments Continue Strong Growth in Global Demand – October 2013 Market Report

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Bill Morecraft
General Manager Blue Diamond Almonds
Global Ingredients Division

 

California almond shipments for the month of October were 228 million pounds and one for the record books. Last October’s shipments were 221 million pounds. Export shipments were 169 million pounds compared to 159 million pounds last year, up 6%. With an additional 200 million lbs of new commitments, the 2013 crop supply is easily over 50% sold. Firm pricing from California reflects this reality.

Year to date shipments may be more telling as the first few months of shipments can change due to the yearly fluctuations in harvest conditions. Year to date shipments, August – October, sit at 553 million pounds, compared to 516 million pounds for the same period last year, an increase of 7%. Domestic shipments year to date are 159 million pounds compared to 146 million pounds last year, up 9% and export shipments are 393 million pounds compared to 369 million pounds, up 6.5%.

Receipts show no surprises, as most in the industry believe the total crop size will be at or slightly higher than the objective estimate of 1.85 billion pounds. Commitments are strong, running ahead of last year nearly 12%. All of these numbers and comparisons simply point to a very strong shipment and demand scenario for the start of the 2013 crop year and this is expected to continue for the foreseeable future.

Another important factor looming is the weather conditions in California for the next few months. Water conditions are critical for California agriculture and we just finished one of the warmest and driest Octobers’ in memory. This dry, warm weather, reminds all in California that we see no relief on the horizon for our water problems. Of course this is only October, but current conditions are a cause for a higher state of anxiety and caution for sellers.

It appears most markets are buying hand to mouth not wanting to take long-term positions with the current price levels. Brisk business has taken place in various markets over the last month with no markets being covered past the end of the calendar year. This means there will be abundant opportunities for California sellers through the winter and into the spring months. We also see California almond industry shipments and demand are widely dispersed throughout many markets worldwide and this illustrates the industry is not reliant on one or two markets for demand.

The India and China markets are expected to have more activity in the coming months as China depletes it’s second hand supply and needs more coverage before the Chinese new year. India clearly recognizes supply in their local market is very thin and requires inventory for the coming months. Supplies for inshell may also play a factor as many packers have shelled out their inshell of various varieties to obtain larger kernels, which are in high demand with price premiums.

Looking forward we continue to see the making of a two tier market where prices for kernels larger than 32/34 are extremely firm and very small sizes show slightly more flexibility. We anticipate November shipment numbers to again show strong demand and many packers have orders in house and running at capacity to meet customer requirements.