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Almond Prices Strengthen Across the Complex as Trade Ramps Up

December 9, 2020

Prices firmed in the U.S. FAS market during the week ending December 8, primarily on demand from Europe and India as shipping problems appeared to worsen. The spike in buying interest surprised some market participants expecting quieter sales following the recent bullish monthly shipments.  

“Buyers are realizing they’re a little shorter than they expected,” a packer said. “If you’re willing to sell prompt, there is a ton of business to be had out there.

Prices strengthened for each of the 14 items assessed by Stratamarkets, from 1 cent/lb on the week for NPX 27/30 to 15 cents/lb for NPX 20/22. Sellers and buyers described trade activity as robust, with one packer reporting that he sold 8% of his 2020-2021 handle last week.

“I think I can sell whatever I want to today,” said another packer late last week. “It’s kind of surprising that there is such strong demand.”

India active in inshell market

The inshell market showed particular strength as NPIS and IIS climbed 6 cents/lb on the week, driven by demand from India. A broker there reported multiple transactions and said on Monday that he still had 25 containers left to buy on behalf of a client. Importers in India were also eyeing Monterey Inshell last week due to the lower price for the item relative to other inshell items and the reported dissatisfaction in Independence kernel sizes.

Market observers expect to see continued buying interest from India in the weeks ahead. However, it’s also anticipated that Australia almonds will soon begin to compete with California almonds as the harvest in Australia approaches. Australia’s marketing year begins in March and ends in February. Also, a packer who sells to India said high cashew prices relative to almond prices are driving almond demand in India.    

“Demand for NPIS is robust,” the broker referred to earlier said. “I think demand is going to continue to be strong for another two months.”

On the supply side, a packer in California wondered if a shortage of inshell almonds from the state might develop.

“It’s been massive shipments,” the packer said, referring to inshell shipments. “It hasn’t been a large premium all year, so I think you’ve had people shelling out their nonpareil into kernel and maybe not producing as much as usual. I’m running out of Nonpareil Inshell. If I’m running out, I’m probably not alone.”

Even though inshell shipments have increased in Q1 of the current California crop year relative to the same period in previous crop years, inshell shipments as a percent of total shipments are roughly equal to previous years as shown in the chart. The chart uses data from the Almond Board of California (ABC):

In Europe, a strengthening euro and the approach of the holiday season helped spur demand. While one packer reported that bids from Europe appeared to be between 5 cents/lb and 8 cents/lb below market value, other packers reported selling large quantities to the region in recent days.

“I’ve been surprised by the level of interest I’ve seen from Europe,” a packer said.

Demand from China was quiet last week. Packer said buyers in China have time to purchase now for product arriving ahead of Chinese New Year on February 12, but said that window is nearly closed. In the 2019-2020 crop year, demand from China decreased sharply after November, underscored by shipments from California to China in the chart below:

Some buyers in China asked packers to ship prompt and guarantee the delivery time, which is currently a problematic request for packers given shipping container shortages. Those shortages have posed difficulties for sellers and buyers alike for weeks and appeared to worsen last week.

“Everybody is having problems shipping goods,” a packer said. “We all have this huge headache.”

In the domestic market, some buyers were said to be searching for almonds shipping far beyond the prompt period at prices below current U.S. FAS price levels.

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