Senior Vice President
The ABC Position Report released yesterday bumped receipts up to 2.530 billion lbs. YTD, with February monthly receipts of 21 million lbs. The top end of the 2019 crop continues to look close to 2.550 billion lbs. as referenced last month.
February shipments were up nearly 8% over the prior year, coming in at a record 201.7 million lbs. Both the U.S, shipments of 64.3 million lbs. and the Export shipments of 137.4 million lbs. were records for the month of February. New commitments of 191.4 million lbs. exhibited continued strong demand. The strong showing in both shipments and new commitments project to an ending inventory that could fall below 450 million lbs.
The ABC report demonstrates robust shipments in most markets. India is enjoying increased consumption, and this is anticipated to continue. This market will continue to grow as the almond trade expands out of the Delhi market to other regions in the country taking advantage of the GST tax that creates an even playing field for all India. Shipments to China / Hong Kong continue to be impacted by tariff issues and now the coronavirus. It is anticipated in the fall, however, that we will see a repeat of last year’s demand to supply this market for Chinese New Year.
The Middle East markets show healthy gains with Turkey and the UAE leading the pack. Again, political and economic uncertainty impacts various countries in this region. Markets generally react quickly to accommodate and adjust shipping lanes and opportunities. The EU market also is continuing to show good growth and above average increases for this region. Japan is exhibiting new growth as well.
The industry has witnessed weakening prices since mid-December. Recently prices have stabilized, driving increased buying interest and short-term demand. At the same time, new challenges have arisen with the coronavirus, poorly performing stock markets and currency fluctuations. The 2020 crop bloom was excellent with good overlap, with new crop expectations approaching 2.8 billion pounds. The coronavirus has resulted in a significant challenge to shipping logistics as ports have closed, and available containers and space on vessels been interrupted. Larger agricultural shippers out of California appear to be experiencing less disruption as they leverage strong partnerships with shipping lines.
February’s strong results demonstrate that the downdraft of the corona virus and the early impact on shipping lanes were more than offset by increased retail demand. As consumers sought staple goods in preparation for uncertainty, retail almond demand has jumped in some markets.
Ending 2019 crop inventory outlook is declining as demand grows. Coupled with softening prices from mid-December through mid-February, a smoother transition into new crop pricing is developing.