Almonds turn decisively bullish as California acreage shrinks

Almond markets have flipped firmly bullish as the first meaningful reduction in California planted acreage in nearly three decades collides with currency weakness, geopolitical risk, and shifting Asian demand. In-shell prices in India have jumped 4–6% week-on-week, kernels are firmer, and forward offers remain thin, pointing to a tight, nervous market into early summer. California’s 2026 crop outlook has been repriced after Land IQ-based adjustments cut total acreage assumptions to 1.398 million acres, with bearing area at 1.385 million acres. Three major grower estimates cluster around 2.64–2.69 billion pounds, clearly below the bumper-cycle narrative and signalling a structurally tighter supply year. At the same time, India is grappling with an historically weak rupee and hot summer demand headwinds, China has stepped back to reassess ahead of the USDA-ABC subjective estimate on 12 May, and Middle East buying is constrained by regional tensions — leaving prices supported but trade behaviour cautious.

Prices & Market Mood

In India, the first visible reaction to the new California acreage and crop estimates has been a sharp reset in in-shell valuations. Non-Pareil in-shell grades at Delhi wholesale markets have risen to around EUR 5.60–5.75 per kg (USD 247–254 per 40 kg), from roughly EUR 5.50–5.60 per kg (USD 242–247) a week earlier, while Independence in-shells have moved to about EUR 5.25–5.40 per kg (USD 232–238) from EUR 5.10–5.20 per kg (USD 225–229), assuming an exchange rate of roughly 1.08 USD/EUR.

Kernel prices have also tightened, though more moderately, reflecting still-muted downstream demand in India’s peak summer. Nonpareil kernels in Delhi are trading near EUR 8.25–8.45 per kg (USD 8.93–9.14), with Independence kernels around EUR 7.60–7.90 per kg (USD 8.20–8.51). Internationally, standard kernel FOB offers are quoted near EUR 5.90–6.05 per kg (USD 2.90–2.98 per lb), Non-Pareil in-shell at roughly EUR 4.85–5.15 per kg (USD 2.40–2.55 per lb) and Independence in-shell at about EUR 4.45–4.55 per kg (USD 2.20–2.25 per lb), underlining the global firming trend.

Supply & Demand Drivers

The fundamental shift underpinning the rally is on the supply side. California’s total almond acreage for the 2026 crop is now seen at 1.398 million acres, with 1.385 million bearing, after roughly 15,226 acres were removed from previous assumptions through updated Land IQ satellite analysis. This is the first time in nearly 30 years that official-style estimates have incorporated an actual acreage reduction, and it marks an inflection from decades of almost uninterrupted growth.

Subsequent grower and handler forecasts reinforce the tighter tone. Famoso-Wonderful-Agwise put the 2026 crop at 2.57–2.71 billion pounds (midpoint 2.64 bn), while Blue Diamond Growers project 2.65–2.72 billion (midpoint 2.69 bn). This clustering below earlier high-growth expectations suggests less exportable surplus, especially once quality and logistic losses are factored in. Parallel to California, Australia is contending with its own acreage reductions and quality concerns, particularly affecting China-bound flows and adding to the perception of a constrained global supply stack.

On the demand side, India remains the central price-setting market, but near-term consumption is tempered. Pipeline inventories are ample, with April imports expected to surpass 1,000 containers, and traders are actively shifting stock into cold storage as a strategic play rather than aggressively liquidating into the rally. In contrast, Middle East demand from the UAE, Iraq and parts of the wider Gulf is weak, pressured by geopolitical tensions and freight risk in and around the Strait of Hormuz, which have raised costs and weighed on confidence.

Macro, Currency & Regional Dynamics

The currency backdrop is amplifying the fundamental squeeze. The Indian rupee is trading close to an historic low of roughly 95 per USD, inflating the local-currency landed cost of imported almonds. Replacement costs for new shipments are now estimated at about EUR 0.09–0.14 per pound (10–15 US cents) above current market levels, encouraging speculative participation and forward storage plays as participants anticipate further upside.

China’s buying behaviour has pivoted from very active to cautious, as buyers pause ahead of the USDA-ABC subjective estimate on 12 May. With Australia constrained and California facing lower acreage, Chinese buyers are reluctant to chase higher offers but also wary of being structurally short should the USDA number print below expectations. More broadly, elevated energy prices and logistics uncertainty linked to the Strait of Hormuz stand-off are helping to keep food inflation elevated, supporting the narrative of almonds – and tree nuts generally – as a partial hedge within commodity and investor portfolios.

Weather & Short-Term Outlook

Weather in California’s Central Valley is entering the critical nut-fill phase, and while no acute shock is reported at this stage, the reduced acreage makes the crop more vulnerable to any adverse episodes later in the season. In Australia, lingering weather and quality challenges are still feeding into tighter export availability, especially for premium grades favored in China. These regional weather and agronomic factors, layered onto structural acreage cuts, are likely to keep production risk premia elevated through the Northern Hemisphere summer.

The upcoming INC Congress in Macau (12–14 May) is set to concentrate market attention, providing a platform for handlers, traders and large buyers to recalibrate views on crop size, demand elasticity and pricing power across the tree nut complex. Combined with the USDA-ABC subjective estimate on 12 May, the event calendar over the next week will be critical in either validating or correcting the current bullish narrative. For now, the balance of risks clearly tilts toward firmness rather than any sustained price correction.

Trading & Risk Management Outlook

• Importers in India: Consider maintaining at least moderate coverage through early summer, but avoid over-committing ahead of the 12 May USDA estimate. Use any short-term dip following a higher-than-expected number to layer in additional volume.
• European buyers: With US kernel benchmarks around EUR 6.55–6.60 per kg for standard Carmel SSR and premium differentials widening for organic Nonpareil, selective forward buying for Q3–Q4 looks prudent, particularly for specialty specs that could tighten further.
• Middle East traders: Given local demand softness, focus on margin protection rather than volume growth. Hedging via nearby futures or back-to-back contracting with origin could mitigate geopolitical and freight-driven volatility.
• Producers and handlers: The combination of acreage reductions and firm import demand argues for disciplined selling. Gradual scale-up of sales around key report dates may capture further upside while limiting exposure to a sudden post-report correction.

3-Day Price Directional View (EUR)

• US kernels, Carmel SSR FAS (Washington D.C.): ~EUR 6.55–6.60/kg – bias: firm to slightly higher as bullish sentiment persists ahead of USDA-ABC and INC Congress.
• Organic Nonpareil kernels US FOB: ~EUR 9.20–9.30/kg – bias: steady to firm, supported by limited organic supply and resilient niche demand.
• Spanish Marcona and Valencia FOB: ~EUR 5.45–8.75/kg depending on spec – bias: firm, following the global California-led rally and stable Mediterranean demand.