Almond prices are rebounding from multi-year lows as dryness shrinks production expectations in California and Spain – while a shortage of bees for pollinating trees has sparked jitters in Australia.
The market has “witnessed broad based stronger year-on-year export pricing indicators”, Australian-based broker Bell Potter said, reporting domestic export values for almond kernels up by 22% in July, while inshell prices were up 21% year on year, as of June.
“US inshell pricing was up 14% year on year in July and kernel pricing up 9% year on year in inshell markets,” the broker said.
Among importer markets, as measured by import parity, EU prices were up 9-14% year on year as of June, with July values up by 6% in China and 17% in India.
The broker forecast that further rises may be in store, given the third successive winter of La Nina, which has a record of bringing drought to southern California – by far the biggest growing state in the US, which is responsible for more than three-quarters of world output.
Bell Potter analyst Jonathan Snape flagged the “potential for a more favourable almond pricing cycle to develop in 2023-24 as Californian bearing acreage expansion slows and the threat of a triple dip La Nina… potentially impacting water availability for the 2023 Californian crop”.
While California’s crop last year escaped drought damage – hitting a record 2.92bn pounds, and prompting a 38% surge to 837m pounds in the state’s carryout stocks, as of the end of 2021-22 – the US Department of Agriculture in July estimated this year’s output at 2.60bn.
Some commentators believe this figure may yet prove too high, given early results from this year’s harvest.
In northern California, “receipts north of Sacramento are down, upwards of 35-50%,” said nut trader Derco Foods, which is based in the state.
“As you move south, receipts are reportedly tracking down 10-20% in the Central San Joaquin Valley and continue to improve as you reach Kern County, with reports of early receipts tracking down 10% to flat compared to a year ago.”
Furthermore, “state-wide, kernel sizing is trending smaller than last season,” although growers and packers in the north of California are “seeing a little more availability of larger sizes”.
‘Volume is significantly down’
Australia-based producer Select Harvests said last week that in Spain, another major growing country, as well as California “early reports… are that volume is significantly down.
“Almond sizing and quality reportedly have been adversely impacted” after conditions which “have been extremely hot”, the group said.
“With uncertainty around the full impact of the drought, market pricing has strengthened in the last few weeks,” the group said, terming the appreciation “pleasing”.
Price growth had been particularly strong “for the nonpareil variety, with inshell and larger sized kernel still attracting premiums”.
For Select Harvests itself, wetness has been more of an issue, given La Nina’s record of bringing persistent rains to eastern Australia. The group has orchards in New South Wales, as well as South Australia and north west Victoria.
The group trimmed to 28,800-29,200 tonnes, from 29,830 tonnes, its estimate for its 2022 crop, although this would still represent an uptick on the 28,250 tonnes produced for 2021.
“The wetter-than-normal harvest conditions have resulted in lower volume, reduced inshell plus additional drying and operational costs,” Select Harvests told investors.
For the 2023 crop, many Australian almond producers have faced the prospect of reduced pollination rates thanks to a shortage of bees blamed on the country’s tough biosecurity regime.
In the state of Victoria, “almond growers were 50,000 hives short,” Select Harvests said.
However, the group forecast its own 2023 output hitting about 30,000 tonnes, saying that it was “able to meet its minimum hive requirement on all orchards”.
Furthermore, it was “able to optimise pollination through the strategic placement of hives and the use of pheromones,” wind-borne chemical attractants, “to encourage bee flight efficiency”.
The group noted too that “unlike the last two seasons we have experienced very few frost events”.