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Current crop inshell price premiums to new crop narrow as prices fall

June 8, 2022

NPIS prices dropped 9 cents in the global container market the week ending Tuesday as the current crop premium to new crop prices tightened.

Prices declined across the complex, the result of tepid demand from India, Europe and the Middle East, a slowdown in draws from U.S. buyers, and a push from sellers in California to clear inventory as harvest approaches. 

NPX 30/32 showed the steepest loss, falling 21 cents. The Stratamarkets Almond Index declined 5 cents to $2.15/lb FAS, down 2.2% on the week and down 0.6% compared with the year-ago week.

The drop in inshell prices was partly attributed to buyers in India pushing for current crop prices to match new crop prices. Current crop inshell prices have been trading at significant premiums to new crop for weeks.

A wave of recent deliveries to India, concern about the shipping window to reach India in time for Diwali, and inshell supply in California still left to sell also contributed to the weaker inshell prices, market participants said.

“If you still have inshell, your item that was in hot demand because of a squeeze on time instead of supply has now turned into oversupply,” a California-based trader said. 

“Now you’re not getting a premium, and will have to sell at a discount to new crop. It’s the only way to get a buyer.”

Current crop NPIS trades for prompt shipment ranged from $1.78-$1.86/lb FAS or FAS-equivalent prices. New crop NPIS traded between $1.74-$1.78/lb FAS. The current crop NPIS premium to new crop fell to 5 cents from 18 cents last week.

“Importers are not interested now,” said an Indian trader.

European market

Buyers in Europe expressed a reluctance to purchase despite increasing selling interest, participants said.

Companies that bought containers are either waiting for them to arrive or have replenished stocks with recently-arrived material that should have been delivered months ago, said one U.K.-based trader.

“There is a lot of unsold product that’s been put afloat by California and they’re looking for homes for that and not finding any,” said the trader, adding that he’s seeing regular offers for small-sized Carmel Type Supreme.

A Netherlands-based trader said the recent influx of containers has boosted stockpiles at warehouses holding spot inventories for the bigger traders.

“Most buyers have high positions on stocks and it’s not rotating quick enough, it’s kind of sitting still which isn’t good for a warehouse as they make money on the rotation, not the storing,” the trader said.

California supply

Several market participants said trading activity is likely to be muted this week in advance of the Almond Board of California’s May position report, scheduled to be released on Friday.

It will be the first report of the year showing new crop commitments. Sellers expect to see low new sales in the report but anticipate decent monthly shipments, which they believe could bolster prices.

Prices for SSR-grade items are compressing, with the CALSSR 27/30 premium to STD5 down to 7 cents this week compared with 12 cents a month ago. The industry’s carry-out is expected to consist primarily of STD5 and SSR-grade material.

The CALSSR 30/32 premium to STD5 has averaged 10 cents this crop year.

Pollenizer prices continue to decline. Stratamarkets assessed CALSSR 30/32 this week at $1.82/lb FAS, which matches its lowest price this crop year, while CALSSR 27/30 was assessed this week at $1.84/lb FAS, also matching a crop year-to-date low.

Some growers are reluctant to sell into the low prices even with the end of the crop year approaching.

“Prices are low, so it’s hard to get call pool growers to sell,” said a Kern County packer. “They can’t sell [pollenizers] because it’s a loss back to the ranch, so they sell Nonpareil and wait for other stuff to come up.”

Items that showed gains are NPX 25/27, which increased a cent from last week, and INX 23/25, up 3 cents on the week. The NPX 25/27 premium to NPX 27/30 was 7 cents this week and has averaged 20 cents this crop year.

New crop

New crop trade continues to pick up, with 30 trades reported this week compared with 17 the prior week. New crop NPIS and INIS continue to trade at discounts to current crop, while new crop STD5 was seen at a 5-cent premium to current crop.

New crop demand is “sporadic,” a Madera County packer said.

China is starting to play in that, but it doesn’t seem like the domestic guys are covered, so it seems like there is decent business yet to be done,” said the packer.

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