November 12, 2012
The Almond Board of California reported October California almond shipments of 221 million lbs, achieving a new record for a single month. At the end of October, YTD shipments to two of the industry’s largest markets are up significantly, 9% in North America and 18% in China. Early in October, California almond prices peaked. More recently they have traded at $.10 below those levels. With the news of October shipments, and an available 2012 supply of ~2.1 billion lbs (including carry-in), we anticipate firm prices as the size of the 2012 crop cannot support the pace of early growth. The limited un-booked processing capacity in California for November will add strength to the firming trend.
YTD commitments are lower than the prior year, further reinforcing the uncovered forward demand. Many sellers and buyers have been reluctant to commit as far forward in 2012 as they have historically. In September, the higher early prices resulted in low buyer confidence and the subsequent steadily increasing prices caused sellers to pause and wait for a peak.
As noted, North American demand continues to grow. China’s consumption will again expand by at least 15%. Europe is even with last year, leaving only the Middle East and Africa showing a slight early decline. The significant reduction in the Nonpareil crop of 15-18%, and the lack of larger CPOs in California and Butte/Padre varieties will result in many item specific shortages in addition to the tightness in overall supply.