Heavy rains could impact Australian inshell sales to China

March 9, 2022

With Australia about a week into its 2022-2023 crop year almond harvest, unusually heavy rains are causing hull rot in some orchards that could present challenges for marketing inshell to China, according to packers and market observers in Australia.

The rain is causing the most damage to orchards in the Riverina in the southwestern region of New South Wales (NSW). The rains hit the region soon after the hulls split, causing hull rot and stains, a market observer said.

The damage will be largely aesthetic. However, it could hamper Australia’s ability to sell new crop inshell to China, its main export market. Inshell almonds are cracked out in China but are also sold unshelled to consumers there, which means the appearance of the shell matters.

“There are issues with stain, issues with hull rot, and other potential issues if the almonds were already on the ground,” said the market observer. “You won’t be selling any inshell from the Riverina into China.”

Downpours attributed to a La Nina weather pattern have led to flash floods in the eastern regions of Queensland and NSW since late February, killing more than a dozen people and forcing thousands of others to evacuate their homes. Recent rain from sporadic thunderstorms has been lighter in the country’s almond-growing areas, which are further west and south.

Much of the inshell Australia produces comes from outside Riverina, a packer in Australia said. This means Australian packers could still sell normal volumes of inshell to China from other growing areas.

Australia also sells inshell to India, where it’s cracked out and re-sold as kernel. For that reason, the shell’s appearance matters less in India compared with China.

In recent days, buyers in China have shown increasing interest for inshell almonds from California, a California packer said on Tuesday.

“Some of the guys I haven’t talked to in months are all coming back looking for inshell offers,” the California packer said.

Some growers in Australia had product on the ground when rain fell. Though damage from the rain is unlikely to negatively impact yields, the overall quality of the new crop could be uneven, the packer said.

“We’re seeing a lot of hull rot at the moment,” he said. “We’re trying to assess it and it will take some time.”

Early signs show Nonpareil kernel sizing from Australia’s new crop will average a 23/25 count per ounce, equal to last year, with a high crack-out percentage, the packer said.

The Riverina region makes up about 40% of Australia’s planted almond acreage and between 25% and 30% of bearing acreage due to the young age of many of the region’s orchards. Most of Australia’s almond are grown in Victoria, followed by South Australia and NSW. A small amount is grown in Western Australia. 

Australia is forecast to produce 320 million lbs from its 2022-2023 crop, up 17% from last year. In the last 10 years, almond production in Australia has grown at an annual compound rate of 7%.