Bearish fundamentals pull inshell prices lower

August 10, 2022

Inshell prices declined in the global almond market the week ending Tuesday as demand from India and China failed to match selling interest with California’s new crop harvest underway.

NPIS lost 12 cents on the week, its sharpest drop since November 2021. INIS shed 11 cents while MIS firmed by a nickel. The NPIS and INIS price decline came as the bulk of inshell trade activity shifted from 2021 to 2022 crop.

“Everybody is just trying to move it,” a packer in Stanislaus County said on Tuesday. “China was a little active in inshell but then left the market, and India is not picking up the slack.”

Though California’s new crop year started August 1, trade for most items continued to straddle both 2021 and 2022 crop during the August 2 and August 8 assessment period, creating a two-tiered pricing structure and a confusing market at times.

Trade activity for inshell, Carmel Type Supreme, and Independence Extra centered on 2022 crop, while activity for STD5 and SSR remained focused on 2021 crop. Trade for Nonpareil Extra also leaned toward 2021 crop.

The active market for 2021 crop is not a surprise: packers are managing what is thought to be California’s largest carry-in on record. “We have a lot of old crop to get rid of,” said a second packer in Stanislaus County.

Prices for STD5 and all assessed SSR and NPX items fell. CTS 27/30 and CTS 23/25 prices spiked as trade on these items shifted from 2021 crop to higher-value 2022 crop.

The Stratamarkets Almond Index finished the week at $2.05/lb FAS, down 2 cents from last week and its lowest level since February. The index is down 76 cents from its year-ago level.

STD5 and SSR

STD5 traded from $1.59/lb FAS to $1.62/lb FAS during the week. Stratamarkets assessed the item at $1.60/lb FAS, marking a new low for the item and its fourth consecutive week in decline.

Following a short-lived rally in July, STD5 prices have fallen 8.6% since then. Prices for Butte Padre SSR items, which are thought to be tighter supplied compared with STD5, declined 4% in the same period.

New crop STD5 prices continue to hold a premium to 2021 crop prices. New crop STD5 traded from $1.72/lb FAS to $1.77/lb FAS, with the higher prices reported for later shipment periods.

Still, trade for 2021 and 2022 crop STD5 was thin.

“Normally you see a lot of STD5 prices floating around, but I haven’t seen much,” the second Stanislaus County packer said.

Many European buyers report little need to buy immediately due to sufficient short-term coverage from earlier current crop purchases.

A Germany-based buyer said shipping delays forced him to utilize his storage capacity to the maximum to ensure he could meet his existing sales contracts.

“If we make new sales, we have to buy,” the buyer said. “Everybody’s living hand to mouth.”

A slow draw-down of stocks was causing congestion issues out of northern European ports, where shipments continue to arrive from California, the Germany-based buyer said. He added that high stocks of several tree nut and dried fruit food items were exacerbating the problem.

“I have been contacted to take merchandise from the port against existing contracts, but I can’t because the warehouse is full,” he said.

A U.K.-based trader said rising inflation and energy prices in Europe remained a drag on market activity.

“From the European buying perspective, there are obvious question marks over consumption and how the consumer’s going to fare in these difficult times,” the trader said.

Frail demand continues to collide with an oversupply of STD5 and SSR stock, which is believed to make up most of California’s carry-in. With the harvest in California underway, packers undersold on 2021 crop are facing pressure to create space as almonds arrive from hullers and shellers.

Many growers in call pools remain on the sidelines hoping for a turnaround in pricing. The lack of grower selling interest for both 2021 and 2022 crop has limited the industry’s ability to shed supply and has trimmed liquidity in the market, observers said.


New crop NPIS traded in the $1.75/lb FAS range at the start of the assessment period but fell quickly at the close, with multiple trades reported from $1.65/lb FAS to $1.68/lb FAS. Ample selling interest remained at that level.

As the NPIS price declined, the NPISEM premium to NPX 27/30 also fell 9 cents on the week to 18 cents, a level that could still attract selling interest.

INIS traded at $1.42/lb FAS at the close of the assessment period. Trade on the item was thin throughout the week.

China showed some interest in inshell at the start of the assessment period but demand from there withered by the end of the period. Multiple trades were reported with buyers in India but primarily for small quantities.

“Demand is subdued in India,” a broker in the country said. “The desired price for buyers in India is between $1.65 and $1.70 CIF.”

Participants also reported trade for 2021 crop NPIS, much of it for unsold containers in transit to India, which likely contributed to the softening 2022 crop prices. Inshell prices for 2021 crop stuck close to 2022 crop. However, the bulk of NPIS trade was for 2022 crop.

Although inshell trade activity picked up during the week, sources said the market was unusually quiet for this time of year with few inquiries from major buyers in India and China.

“At this time of the harvest/production cycle, that’s when you need India and China, but they’re not here to the levels they usually are and that’s why the prices are so weak,” a European trader said.

The falling California inshell prices come even with inshell shipments from Australia down. From March to June, Australia exported 21 million lbs of inshell, down from 32 million lbs in the same period last year, according to new data from the Australian Bureau of Statistics.

Australian inshell shipments to India from March to June fell 45% from the year-ago period while shipments to China dropped 28%.  Rain and humid weather in Australia before and during its harvest damaged some of its inshell supply. Australia’s crop year starts in March.

Extra No. 1 and Supreme

Demand from Japan, Korea, China, and other NPX buying regions remained disappointing for sellers.

Buyers in Japan filled warehouses earlier in the year to protect themselves from shipping delays and have yet to work through those stocks, multiple sources said. Consumers in Japan are also traveling less and therefore consuming fewer almonds, and the yen has fallen against the dollar.

However, demand from Japan could improve soon as manufacturers there prepare for the year-end holiday season.

Nonpareil Extra trade activity remained focused on 2021 crop, with some activity reported for 2022 crop. The market for Nonpareil Extra was thin with 2021 crop inventory disappearing and growers still reluctant to sell 2022 crop Nonpareil Extra given concerns about the quality of California’s next crop and the Nonpareil supply, market sources said.

Prices for all assessed Nonpareil Extra fell with smaller kernels leading the decline. NPX 20/22 was down a penny on the week to $2.49/lb FAS while NPX 30/32 lost 8 cents.

Crop Year Pricing

Buyers said existing new crop premiums for several items look precarious given the downward pressure on market prices, and some said they expect new crop premiums to fall as harvest progresses.

The U.K.-based trader said the current crop carry-in normally commands a premium to new crop, so packers naturally focus on clearing out their current crop.

“But this year it’s inverted because we have a very big carry-over and a lot of people still wanting to sell,” he said. “Now the new crop has to compete with the current crop to get the sales done.”

He added that as a result, his expectation is that new crop premiums will at some point blend into current crop prices.

Looking Ahead

The Almond Board of California (ABC) is scheduled to release its July 2021 position report on Friday. Some market observers are bracing for the report to show lower-than-expected July shipments due to recent problems shipping almonds from the Port of Oakland, which shut down for several days last month. 

Friday’s position report is the last for California’s 2021-2022 crop year.