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Larger kernels continue to attract buyers, while STD5 and NPIS markets trade flat

December 15, 2021

Trade in the global almond market leading into the release of the November position report was relatively quiet the week ending Tuesday, but pricing for larger kernel items continued to show strength while STD5 and NPIS markets were unchanged.

Stratamarkets reported 44 trades during the week, compared with 56 last week and 63 the week ended November 30.

Larger kernel items mostly moved higher last week as buyers continue to place a premium on bigger almonds. Middle East buyers in particular have shown more interest in large-kernel Independence and Nonpareil-variety almonds ahead of Ramadan, which starts early April.

Prices for NPX 25/27, NPX 23/25 and NPS 23/25 moved up during the week, while prices for NPX 27/30 and NPX 30/32 dipped. INX 23/25 and CTS 23/25 prices also rose.

Larger-sized kernels continue to command a premium in the inshell market, with trades for sized NPIS reported at a roughly 2 to 5 cent premium to unsized NPIS.

Sized NPIS trades for 27/30 AOL kernels were reported at $1.82/lb FAS and $1.85/lb FAS, while prices for unsized NPIS was reported between $1.78/lb FAS and $1.80/lb FAS.

Most Indian buyers are demanding sized inshell. Crack-outs of early inshell shipments to India this crop year have yielded kernel sizes smaller than usual, according to buyers in India. Prices in the country’s domestic market remained stable. 

A broker in India said Australia is expected to offer new crop into the market soon, which could pressure California inshell sellers to lower offers. Inshell from Australia typically containers large-size kernels. 

India is the largest export market for California almonds, and the November position report showed exports to India totaled 26 million lbs, down 21.5% from the year-ago month.

Logistics remain a significant frustration for the market, which is leading to storage issues for some packers. As a result, more packers may be inclined to crack-out their inshell product to free up bins, but to also take advantage of higher prices for large kernels.

Logistics issues have also impacted exports from Australia with fewer ships available now to move almonds from the country to India. Total exports from Australia fell to 16 million pounds in October – the most recent reported month – down 33% from the year-ago month, according to data released last week from the Australian Bureau of Statistics (ABS). However, YTD exports from Australia remain higher compared with the previous marketing year, which begins in March and ends in February.

Stratamarkets assessed NPIS this week at $1.80/lb FAS, which yields an edible meat price of $2.57/lb. For comparison, NPX 25/27 – which was assessed this week at $2.79/lb FAS – shows a 22-cent premium to the NPIS edible meat price.

NPX 27/30, however, which was assessed this week at $2.47/lb FAS, fell to a 10-cent discount to NPIS on an edible meat basis.

In other markets, prices for STD5 last week were unchanged. Trades were reported between $1.99/lb FAS and $2.01/lb FAS for prompt shipment, while trades further out were reported at $2.04/lb FAS for March and $2.05/lb for March and April shipment.

A UK-broker said before the release of the November position report he thought that forward curve for STD5 had flattened.

“I think that forward premium has gone away,” said the U.K. broker, adding that “no one is worried” about a lack of supply.

Bids were heard Tuesday at $2.00/lb FAS prior to the release of the report, and at $1.98/lb FAS afterward.

Rain and snow hit California this week but the state remains in drought, which some sellers believe could continue to support prices. A lack of selling interest from growers has helped bolster prices despite lower shipment numbers.

But as shipment numbers continue to trail last year, the more pressure grows on sellers to move product in order to avoid another record carry-out.