May shipments set record; new crop sales fall

June 15, 2022

Record May shipments of 258 million lbs encouraged sellers as the market received its first look at new crop sales.

The May 2022 position report released Friday by the Almond Board of California (ABC) showed shipments up 17.4% from the year-ago month, smashing the previous May record of 219 million lbs.

“Everyone is really excited about it,” said a San Joaquin County packer. “It’s really a great number.”

New crop sales reached 129 million lbs, the second-lowest since the ABC began reporting new crop commitments. 

Prices drifted lower after the report, with most items assessed items falling and the Stratamarkets Almond Index losing 3 cents on the week.

May was the third straight month California’s almond shipments exceeded 240 million lbs following a three-month stretch from December to February when shipments never topped 200 million lbs.

It was also the highest shipment figure this crop year, beating the 245 million lbs shipped in April.

Declining U.S. imports have resulted in better shipping container availability as steamship lines return fewer empties to China. Buyers and sellers are also learning how to crack logistics logjams through methods such as paying demurrage fees for chassis to ensure containers reach the port on time.

“More buyers and sellers are coming to terms with things you can do to improve your shipments,” said a Stanislaus County packer.

Exporting product from California on time has been a problem for shippers, so any sign that shipping problems are easing will be welcomed by buyers and sellers alike, a U.K.-based trader said.

“If [packers] get to September and October and they’re shipping 30-40% more in a month, then they’ll probably be a lot happier,” the trader said.

Higher shipments will help reduce the carry-out. Like last year, mid-season concerns about a large carry-out have eased, though the industry is still bracing for another record carry-out likely to exceed last year’s record 608 million lbs.

Earlier in the year, some market participants estimated the carry-out would approach 1 billion lbs. Following the May position report, a San Joaquin County packer said this year’s carry-out could dip below 700 million lbs.

“I may be more optimistic, but I think a lot more (current crop) business is coming,” said the packer. “We sold more in the month of May than last year, so it’s trending in the right direction.”

New monthly sales in May reached 117 million lbs, a five-year high and up 13.5% from the year-ago month. Computed inventory stands at 1.27 billion lbs, up 22.4% from the same time last year. Of that amount, 660 million lbs are uncommitted, up more than 52% from last year.

Monthly shipments this crop year have averaged 219 million lbs. If that average holds through the end of the year, the carry-out will reach about 840 million lbs.

If monthly shipments total 250 million lbs for the final two months of the crop year, the carry-out could drop below 800 million lbs. The June shipment record is 221 million lbs, and the July record is 229 million lbs, both set last year.

May shipments to India reached 34 million lbs, up 141% from the year-ago month. India is California’s largest export market. Diwali demand and rolled containers in previous months drove shipments in May, a trader based in India said. 

“People realized that new crop can’t be counted on for Diwali so a lot of current crop purchases were done and also the backlog seems to be easing,” the trader said.

Shipments to Western Europe hit 71 million lbs, up 35% compared to a year ago, with exports to Germany up 55% and exports to Spain up 31% for the month.

Traders and buyers in Europe said the increase in exports to the region doesn’t alter the market’s supply-demand imbalance.

“It doesn’t really change the picture for me,” a German buyer said. “California still has a lot of almonds to sell and needs to find markets to sell them to. If anything, that large shipment number is going to translate into larger volumes arriving at destination markets and so probably lower demand.”

New crop commitments of 129 million lbs were down from  232 million lbs last year and 287 million lbs in May 2020. Though reported for May, the new crop commitments include sales booked in previous months, too.

New crop sales reported in May totaled 4.6% of the USDA’s  2.8 billion subjective forecast, down from 7.2% last May. The chart below shows new crop sales reported in May as a percent of the USDA’s subjective forecasts for the previous six years:

Several packers said the new crop sales were disappointing but not surprising.

“We don’t know what the crop will be, and with decreasing sizes out of the orchards the last two years, your big concern is selling too early, before you know what you have,” said the San Joaquin County packer.

Inshell has made up a significant portion of new crop sales in previous years. But an earlier Diwali festival this year compared with last year in India means less demand for new crop inshell, because importers need to satisify that demand with current crop supply if they want product to arrive in time for the festival.

Packers are also focused on current crop sales to free up bins for the coming harvest, which could explain the lower-than-usual new crop commitment figure. In addition, buyers may not be in a hurry to book new crop given the carry-out, said a Kern County packer.

“There’s some cannibalization of new crop sales because lots of buyers are figuring they’ll just buy out of old crop,” the packer said.

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