Currency concerns add to demand woes as prices edge lower

July 6, 2022

STD5 prices fell to a crop year low for the second consecutive week in the global container market on Tuesday as demand from Europe remained tepid.

Stratamarkets assessed STD5 at $1.69/lb FAS, a low mark for the crop year and down 24 cents from last year. STD5 is at its lowest level since Stratamarkets began publishing weekly price assessments in April 2020.

The slump is partly due to tighter margins in Europe’s manufactured products market, which is prompting input buyers to cut bids, participants said. Europe is also considered to be oversupplied with STD5 and small SSR-grade kernels, which are used as inputs to make manufactured products.

The Stratamarkets Almond Index fell a penny to $2.08/lb FAS, marking the seventh consecutive week the index has shed value or remained flat on the week.

In other developments:

  • Demand from China has improved for current and new crop NPIS as stocks in the country thin.
  • NPX 20/22 prices continued to fall as packers worked to clear their remaining inventory of the item.
  • A labor contract between U.S. West Coast dockworkers and their employers expired as negotiations continued and the two sides said exports would continue to flow from the ports.

Europe, Middle East

The apparent oversupply in Europe that is pressuring STD5 and small SSR-grade items showed no signs of diminishing. Market participants in both the U.S. and Europe said warehouses in Europe are full and packers are offering to sell product that is either currently in transit to Europe or already arrived.

“We keep hearing offers of spot merchandise from everywhere,” said one Germany-based trader. “Buyers here 

[in Europe] are full with inventory. We’ve been asked by one client to find warehouse space and store at their expense.”

Narrowing margins faced by companies in Europe’s manufactured products market are also pressuring input prices. A U.K.-based trader said the manufactured products market in Europe is increasingly competitive, which means some companies are struggling to turn a profit.

A weakening euro is exacerbating the problem. On Tuesday, the euro fell to a 20-year low against the greenback, Bloomberg reported.

“With these tight margins, it’s not easy, especially with rising production line costs including energy, labor, and inputs,” said the U.K.-based trader. “Even though the STD5 price is easing, in euro terms it’s becoming more expensive.”

The trader said that in a recent large tender for blanched whole and broken almonds, smaller processors reduced their offers by about 15 euro cents/kg to compete with larger rivals.

Opening offers in the tender were at about 4.80-Eur 4.85/kg DDP Europe. Companies eventually awarded a portion of the business had to drop offers to Eur4.70/kg.

The Middle East remained one of the more active markets for large Carmel Type and Nonpareil kernel, but not active enough to prevent NPX 20/22 prices from losing ground. 

Stratamarkets assessed NPX 20/22 on Tuesday at $2.53/lb FAS, its lowest level since September 1, 2020, when the item was assessed at $2.30/lb FAS. The item has fallen 38% from its crop year high of $4.05/lb FAS.


Demand from China in recent weeks has increased, participants said, a potential bright spot for sellers.

Buyers in China have purchased substantial volumes of current crop NPIS for July and August shipment from $1.75-$1.77/lb FAS, a trader said on Tuesday.

In the final weeks of June, buyers in China also purchased substantial  volumes of new crop NPIS at $1.64/lb FAS, a trader at a separate firm said on Friday. That’s more than 10 cents lower from where most new crop NPIS sellers have offered and lower than previously-reported new crop trades for the item.

Importers in China appear to be eager to replenish depleted inventories. Two festivals that usher in heavier almond consumption in China are approaching, which could be spurring new crop demand. Those festivals are Singles’ Day and Chinese New Year on November 11 and January 22, 2023, respectively.

Sellers have expressed optimism that demand from China could help lift new crop prices for California, even if the lift is short-lived.

Demand for California almonds from China could be more robust this year if China purchased less from Australia. Though some market participants have said China was unable to purchase its usual volumes from Australia due to weather-related damage to Australia’s crop, others have said the impact was negligible.

Active demand from China at this time of the year is not unusual: The bulk of exports from California to China and Vietnam, a reseller to China, are shipped from September to November.

Almond exports from California to China are down this crop year. That’s partly due to Covid-19-related lockdown measures in China, which have dented demand. 

In India, buyers remained focused on purchasing current crop inshell ahead of the Diwali festival with less interest in new crop inshell.

“New crop will be of no use for Diwali,” an importer in India said.

Market participants questioned how much inshell is left in California with the end of the crop year approaching, and how much demand remains in India for current crop inshell.

Current crop NPIS trades were reported from $1.64-$1.80/lb FAS on a normalized basis. The disparity is perhaps reflective of the range of qualities sold as inshell and the range of sold positions among sellers: Some packers sold their inshell supplies months ago, while others are still selling.

A buyer in India also reported purchasing NPIS at the low end of that range from a seller with containers on the water and set to arrive in July.

The rupee fell to a record low against the dollar on Tuesday, Reuters reported, increasing purchasing costs for importers.

“With the strong U.S. dollar, the market isn’t falling locally, but cost is going up,” a trader based in India said.


Buyers in the U.S. appeared to remain largely disconnected from sellers, with buyers willing to confirm business for calendar year 2023 but sellers reluctant to commit beyond  Q4 2022.

Almonds and other exports will continue to move from ports in California even though a labor contract representing about 20,000 U.S. West Coast dockworkers expired on Friday, according to a joint statement from the dockworkers’ union and the association representing their employers.

“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association and the International Longshore and Warehouse Union,” the statement said.

Exporters and importers have been monitoring the negotiations, with some expressing concern that failure to reach a new agreement could slow shipments from the ports, intensifying already difficult supply chain challenges. About 85% of California’s almond exports leave from the Port of Oakland, with the remainder exiting from the joint ports of Long Beach and Los Angeles.

Looking Ahead

New crop trade activity is likely to receive a boost with the scheduled release on Friday of the 2022 California Almond Objective Measurement Report from the USDA’s National Agricultural Statistics Service (NASS). Market participants typically wait for the forecast, the second of two forecasts NASS releases each year, to help guide their new crop selling and buying strategies.

Last year, the objective forecast fell short of the initial subjective estimate by 400 million lbs, sending prompt prices soaring. Some sellers are hoping for a repeat this year, although other participants expressed concern that a replay could freeze liquidity.

On July 12, the Almond Board of California will release its June 2022 position report. Market participants expect to see record June shipments.

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