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Demand from China Increases as Large-Kernel Offers Soar

August 31, 2020

Prices climbed for the third consecutive week in the California almond market during the week ending August 28 as global demand spiked.

“India is pulling, China is coming in, Europe is waking up,” one packer said. “The market is definitely going up.”

Prompt shipment Standards were pegged at $1.79/lb FAS Oakland at the end of last week, up 3 cents/bl from price levels the previous week. Bids at the end of the week were talked at $1.77/lb FAS Oakland with offers at $1.80/lb and higher.

Most of the trade for Standards last week appeared to be for 2021 shipments with Europe seen as well-covered for the prompt and Q4 periods. Standards for 2021 shipments were trading at $1.80/lb FAS Oakland.

The chart below shows prices for prompt shipment Standards for the previous eight weeks:

Large-kernel almonds continued to command strong price premiums to smaller-kernel almonds amid signs that the 2020-2021 crop is producing fewer large-kernel almonds compared with previous crops.

One packer said 27/30 almonds currently make up the largest share of new crop almonds his company has sized, with 23/25 almonds accounting for only about 10% of its sized new crop inventory.

“The sizing coming in – it’s still looking smaller than last year by a good margin,” the packer said. “The 23/25s aren’t exactly pouring out of the sizer.”

Another packer said he is seeing more large-kernel almonds emerge as the harvest progresses.

“Our sizing has improved, but it’s still not great,” he said.

The market for prompt shipment Nonpareil, 23/25, Extra almonds was pegged at $2.20/lb FAS Oakland, up 5 cents/lb from price levels the previous week. That was based largely on a trade for pasteurized Nonpareil, 23/25, Extra almonds at $2.27/lb FOB, which converts to an unpasteurized FAS price of $2.20/lb.

The prompt Nonpareil, 23/25, Extra price premium to prompt Standards was seen at 41 cents/lb last week, its second-highest level since April. The chart below shows price premiums for the previous 21 weeks.

Participants pegged the market for new crop Nonpareil, 23/25, Extra almonds at higher levels after the item was heard to have traded at $2.30/lb FAS Oakland, which caused offers for the item to soar.

Nonpareil, 22/24, Extra almonds traded at $2.35/lb FAS Oakland for October shipment.

Pasteurized Nonpareil, 25/27, Extra almonds traded at $2.07/lb FOB for prompt shipment, which converts to an unpasteurized FAS price of $2.00/lb.

Nonpareil, 27/30, Extra almonds traded at $1.91/lb, $1.95/lb, and $1.98/lb FAS Oakland, most of them for September shipment — with offers for the item heard at $2.00/lb FAS Oakland by the end of the week.

Pasteurized Nonpareil, 30/32, Extra almonds traded at $2.00/lb FOB for prompt shipment, which converts to an unpasteurized FAS price of $1.93/lb.

An almond importer in Latin America who has clients in Mexico said demand for Nonpareil kernels in the country suddenly perked last week.  

“Everyone was pulling almonds from everywhere,” the importer said, referring to his end-use clients in Mexico.

In the inshell market, continued demand from India and emerging interest from China buoyed prices last week.

Nonpareil Inshell almond prices started the week at $1.42/lb FAS Oakland and firmed about 8 cents/lb by the end of the week. Trades for the item were confirmed at $1.44/lb CIF to India; $1.46/lb CIF to India;  $1.45/lb FAS; $1.52/lb CIF to China; and $1.53/lb CIF to India. All trades were reported on a 70% sliding scale.

Independence Inshell almonds traded last week at $1.35/lb FAS and $1.36/lb CIF to India. At the end of the week, the item was seen bid at $1.36/lb and offered at $1.38/lb FAS Oakland.

Strong prices for almonds in India’s domestic market are helping fuel interest there for California almonds, which are still trading at low levels compared with previous years. Those historically low prices are also prompting increased interest among traders in China.   

While packers welcomed the strong demand from India and China, some packers cautioned that interest from the two countries could evaporate as quickly as it began, particularly after China covers its positions ahead of Chinese New Year festivities.

China typically imports a large share of its annual almond intake from California between September and November. The chart below shows average monthly almond shipments from California to China/Hong Kong from 2010 to 2020:

Some packers expressed concern that if sellers in California begin to pull offers in the hope that prices will continue to climb, a wide swath of the market could miss buying opportunities now present.

“When the market is falling, buyers can get scared away, and when the market is rising, sellers can get scared away,” said one of the packers referred to earlier. “I think the concern at this point will be that California maybe pulls back too much.”

In other varieties:

  • Carmel Type, 25/27, Supreme almonds traded early in the week at $1.85/lb FAS Oakland, and were pegged at $1.88/lb FAS Oakland by the end of the week.
  • Carmel Type, 27/30, Supreme almonds traded at $1.90/lb FAS Oakland for Q4 shipment.
  • California, 23/25, SSR almonds traded at $1.88/lb FAS Oakland for October shipment.
  • California, 30/32, SSR almonds traded at $1.80/lb FAS Oakland early in the week.

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