Almond Kernels Gain Ground as India Reshapes Global Almond Demand

India’s accelerating shift from in-shell almonds to kernels is emerging as a key demand driver, helping Australian exporters place weather-affected grades and underpinning a mildly constructive medium-term price outlook. The almond market is transitioning from a predominantly in-shell trade into a more diversified kernel-based value chain, with India at the center of this change. Australian suppliers are using stronger kernel demand in India to move lower-grade lots from a wet, quality-challenged season into food manufacturing channels. At the same time, recent tariff reductions under the Australia–India trade agreement are making Australian kernels more competitive against other origins. Combined with rising consumer focus on protein, fiber and “better-for-you” snacks, plus a generally firm but not overheated global price environment, this points to a more balanced market with upside for processing grades in particular.

Prices

Spot almond kernel prices in key export hubs are broadly stable to slightly softer, reflecting good availability yet firm underlying demand. In Washington D.C., U.S.-origin organic almond kernels, natural 27/30 nonpareil SSR, FOB, are quoted at EUR 9.35/kg (down from EUR 9.40/kg on 23 October 2026). Conventional Carmel SSR 18/20 kernels, FAS, stand at EUR 6.70/kg, marginally below prior levels.

Spanish-origin kernels in Madrid, FOB, also show a mild easing across most varieties. Marcona 12/14 trades at EUR 6.66/kg, Valencia 10/12 at EUR 7.15/kg and Guara 12/14 MMS at EUR 5.95/kg, all a few euro cents below quotations from mid-October 2026. The modest downward adjustments indicate a market digesting ample Northern Hemisphere supply, while structural demand growth in Asia, notably India, helps prevent a deeper correction.

Supply & Demand

Australian supply this season has been affected by wet weather, resulting in quality challenges and a larger share of lower-grade kernels. Instead of pressuring prices through discounted bulk sales, exporters are increasingly able to place these grades into India’s fast-developing food manufacturing sector. Indian buyers are purchasing a wider spectrum of specifications tailored for confectionery, bakery, sweets and snack applications, which is widening demand beyond traditional in-shell consumption.

California’s 2026 almond harvest advanced rapidly during September under warm, dry conditions, but early industry reports suggest per‑acre yields are below 2025 levels, limiting the risk of significant oversupply despite still-substantial inventories. In India, macro demand fundamentals remain robust: nuts and nutrient-dense foods are benefiting from rising incomes and heightened awareness of protein and fiber in urban diets, sustaining import appetite even as trade patterns shift more strongly toward kernels.

Fundamentals & Policy

The Australia–India Economic Cooperation and Trade Agreement (ECTA) is a game changer for bilateral almond trade. Tariff reductions on almond kernels and a dedicated tariff rate quota of 34,000 tonnes have materially improved the competitiveness of Australian product in India, particularly versus origins that still face higher duties. This has redirected a portion of Indian purchases away from in-shell imports toward kernels, reinforcing the trend highlighted by Australian industry leaders.

Within Australia, the recent almond industry conference in Adelaide, which drew over 800 participants, signaled solid sector confidence. Discussions underscored a broadly positive medium-term pricing outlook, supported by expectations of steady global demand growth, continued nutritional tailwinds and disciplined supply expansion. The participation of Californian experts also highlighted shared challenges: water availability, pests and disease management, all of which could constrain future output growth and support a firmer floor under prices over time.

Weather & Crop Conditions

In Australia, the official outlook for October–December 2026 points to above-average rainfall across much of Western and central regions and above-average temperatures nationwide. While this pattern could benefit water reserves, it also heightens disease and quality risks if extended wet conditions intersect with sensitive crop stages in some orchards, reinforcing the importance of flexible quality-based marketing strategies.

In California, October conditions are generally forecast to be warmer and drier than normal, with the broader El Niño setup favoring improved precipitation later in the season and a gradual easing of drought in parts of the state. For almonds, this mix means short‑term support for harvest and post-harvest operations, while medium‑term production prospects will hinge on how winter rainfall and snowpack evolve through early 2027.

Market Outlook & Trading Ideas

• Australian exporters: Leverage India’s growing kernel demand and tariff advantages by segmenting offers by grade and functional use (paste, slicing, roasting). Lower-grade kernels can capture value in processing channels instead of deep discounts in bulk markets.
• Indian buyers: Consider extending coverage in kernels, particularly processing grades, while Australian supply remains ample and price spreads to premium grades are attractive. The evolving duty structure and rising domestic demand suggest gradual upward price normalization over the medium term.
• European and U.S. importers: With spot prices slightly softer and California yields below last year, use current levels to secure core positions in key varieties (Nonpareil, Carmel, Marcona, Valencia), but maintain flexibility for potential weather- or policy-driven volatility later in the season.

3‑Day Price Indication

Over the next three trading days, almond kernel prices on key routes (FOB Madrid for Spanish kernels and FOB/FAS U.S. ports for Californian product) are expected to remain narrowly range-bound with a slight downward bias, reflecting ongoing harvest pressure but resilient demand from India and other Asian buyers. No sharp moves are anticipated unless unexpected weather or policy headlines emerge.