Almonds Market Update 2021
As we move into the month of October, there are plenty of changes to keep a track of. Things have changed quite a bit in terms of the weather and shipment plans as well. Therefore, it’s important to remain up-to-date with what’s happening in the market.
Update on the September Shipments
Even with the global shipping issues, the almond industry has continued to come near previous records. When the Almond of California released the September shipment report, many had expected it to hit 260 million points for the past month. However, it has come down to 227.64 million pounds for this month, 12% decrease from last year but not unexpected for the times we’re in.
Domestically, 64 million pounds were shipped which is a 0.8% increase from last year but the issue with the almond market isn’t just the shipping. Growers know that lowering their prices won’t solve the shipping crisis and so, they’re quite firm about it.
With the drought, no one’s willing to back down and it’s not unreasonable to assume that most growers are actually getting ready for next year 2021/2022 crop.
What Changes has the New Weather brought on?
As we’ve move into October, we have seen some subtle changes in the weather. While there was a chance of rain this week, it only resulted in some high clouds and slightly cooler temperatures.
However, it is expected to be in the mid-70’s this upcoming week. These cooler temperatures will be much appreciated but what we really need is rain. As a result of stagnant air in the valley it has filled back up with smoke again. This smoke is making it difficult for many to breathe and a constant reminder of the forest fires that continue to burn throughout the Sierras.
Forecast for Rekindling Global Demand
Prices fell this week on Tuesday, surprising all sellers. But this definitely helped to stimulate demand. It fell for most items, led by NPX 30/32, which lost 39 cents on the week. Benchmark STDS lost 15 cents on the week while NPIS fell 14 cents.
The most surprising drop came from small kernel items which were the losses seen by larger-kernel items. These are said to be in short supply. NPX 23/25 and NPX 20/22 both fell more than 20 cents on the week.
Prices in the global almond market began to drop in the days leading up to the Almond Board of California’s (ABC) September 2021 position report, released on October 12. Buyers moved quickly to capitalize on what they perceived to be a bearish outlook, with the report showing shipments, commitments, and new monthly sales all lower compared with last September.
Buyers in overseas markets continued to purchase from local spot markets, where prices were often lower compared with offers from California, making it difficult for sellers in California to transact at their desired price levels.
What else has been going on?
Nearby commitments have continued to be strong and are being held back by shipping issues. Some handlers will refuse to sell more at these low prices while they try to get their product that they’ve already sold shipped out.
With a back log of shipments both at the ports and at destinations, pricing may come down to move the local stocks, even if only temporarily. The industry cannot afford to miss too many shipping records before it starts losing out on consumer consumption.
New crop stocks are now on hand and there are limited ways to move it. The costs to hold continue to increase, not to mention the lack of space to store this product.
With the industry undersold, some handlers will be forced to sell soon. The market will not want to completely miss out on high shipments in the near term.
