Blue Diamond Almonds Market Update – April 13, 2016

April 13th, 2016

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Warren Cohen
Director of International Sales
Blue Diamond Almonds

Overview –

Almond Board shipment numbers for March were 161 million pounds.   This compares favorably with historic shipments for March and reflects steady demand for the industry. Existing contracts are being shipped and include prices from last fall, as well as lower prices for more recent purchases.  It is also important to note shipments in March last year reflected a significant amount of backlogged cargo due to the port strike.  Year-to-date industry shipments of 1,153 billion pounds trail prior year by 7.65%.

It is evident many markets purchased hand-to-mouth over the winter months and still require additional tonnage before the new crop.  Over the last 6 weeks market volatility has subsided significantly.  This is beneficial for an industry that is looking for stability and confidence.

Contract issues still exist in a few markets but problems are being solved as we move forward.  Specific markets are showing continued good demand.  China is only 7% behind in year-to-date shipments versus prior year.  The EU market, which is up 6%, has also enjoyed healthy shipments, riding on the shoulders of Spain, which is up 23%.  India is 12% behind last year.  The UAE is down a significant 49% while a number of other Middle East markets have seen an increase in shipments.  The North American market is down 8.9% year-to-date. This is a reflection of higher prices contracted last summer and fall, and consumer resistance to prices on store shelves today.

As almond prices adjust to the existing market and align with expected supply, pricing is reigniting significant demand in all markets.  China, India and the Middle East will react more quickly due to the nature of the way almonds are traded and can quickly be introduced into the market place.  North America, Japan and EU customers may not able to move as quickly due to more established long-term commitments and marketing/labeling factors.  The combination of the current price levels that are attractive to customers worldwide, combined with the excellent health and nutritional value of almonds, will continue to propel strong consumer preference for almonds.

Market Perspective –

Looking forward, the Subjective Estimate will be out May 10. This number will dictate market direction until the Objective Estimate in June. The 2016 crop has enjoyed an excellent bloom and good post pollination weather. El Nino has brought relief to the Central and North parts of the state.  The Southern half of the valley is still in a significant water deficit situation.  As buyers gain confidence, and packers can better gauge what type of crop they have on the trees, we expect to see more stability and predictability, which benefits all involved in our industry.

Follow the ongoing progress of the 2016 California almond crop at https://www.bdingredients.com/news.

Click here to view the entire detailed Position Report from the Almond Board of California site: