Prices softened in the California almond market during the week ending May 29 as buyers and sellers struggled to agree on price.
Current crop Standards for prompt shipment traded from $1.86 to $1.89/lb FAS Oakland, with $1.86/lb the more repeatable transaction level, market participants said. Prices for current crop Standards fell about 4 cents/lb last week compared with price levels the previous week.
One broker said buyers and sellers remained largely dug into their positions, making it challenging to conclude deals last week.
Current crop price premium to new crop is tight
Prices for new crop Standards appeared to hold their ground last week, with trades heard at $1.85/lb FAS Oakland – roughly the same level they traded at last week. This puts the current crop Standards price premium to new crop Standards at about 1 cent/lb.
Market participants said the current crop price premium to new crop prices is equally narrow for other almond varieties.
In other varieties, a large packer and trader said he was offering current crop Nonpareil, 23/25, U.S. extra number one almonds at $2.20/lb FAS Oakland but was not finding buying interest at that level. Current crop Nonpareil, 23/25, U.S. extra number one almonds entered last week bid at 2.15/lb and offered at $2.17/lb FAS Oakland.
Prices appeared to be slightly lower last week for new crop Nonpareil, 23/25, U.S. extra number one almonds, which were bid at $2.10/lb and offered at $2.15/lb FAS Oakland. One packer said he heard a trade for the same new crop variety, size, and grade at $2.19/lb FAS Oakland, but that trade could not be confirmed.
In the domestic market, the packer and trader referred to earlier said a large retailer was seeking to buy new crop Nonpareil, 23/25, supreme almonds at $2.05/lb last week.
New crop California, 30/32, U.S. select sheller run almonds traded last week at $1.90/lb. However, it was not clear if the trade was FOB or FAS.
Contract defaults cloud Nonpareil in-shell market
Meanwhile, one packer said another large almond producer and packer sold Nonpareil in-shell almonds last week to an importer in China for $1.50/lb. A bid for Nonpareil in-shell almonds was also heard at $1.45/lb.
Participants said the market for Nonpareil in-shell almonds has been unusually murky in recent weeks due to contract defaults said to be occurring in India – a big buyer of that variety.
Market participants said the defaults are affecting hundreds of shipping containers either in India or on their way to India. Participants said sellers are now attempting to re-sell volumes impacted by the defaults.
A letter circulating in the market last week, carrying the name of a well-known almond distributor and dated May 2020, urged companies to refrain from renegotiating contracts with importers seeking resets.
Market participants described trading activity last week as unusually quiet for this time of year, partly because almond demand remains blunted in key global markets still emerging from covid-19-induced shutdowns.
Almond prices have fallen sharply this year, the result of softer demand due to the global pandemic and expectations of a supply glut. The U.S. Department of Agriculture is forecasting a record 3-billion-pound almond harvest in California this year.
The next look at how the pandemic is impacting global almond demand will come on June 11 when the Almond Board of California is scheduled to release its May 2020 position report.