Almonds Turn Bullish as USDA Crop Estimate Tightens Global Supply
USDA’s 2026 California almond estimate and tight Indian imports have flipped sentiment bullish. See key price moves, demand risks and short‑term outlook.
Prices & Immediate Market Reaction
The USDA/NASS 2026 California Almond Subjective Estimate, released on 12 May, pegged the crop at 2.7 billion lbs, roughly 1% below the 2025 harvest on an average yield of 1,940 lbs/acre. That small downgrade was enough to trigger an outsized price response in India, where in-shell values jumped 6–8% and kernel prices around 5% almost overnight. Non-Pareil in-shell (NPIS) is now quoted in New Delhi at the equivalent of about EUR 5.95–6.02 per kg, while Independence in-shell trades near EUR 5.66–5.71 per kg, using current FX assumptions from the given USD ranges.
Kernel prices in India have likewise firmed, with Nonpareil around EUR 8.42–8.62 per kg and Independence approximately EUR 8.08–8.13 per kg. Against this, US and EU kernel offers appear relatively stable in recent weeks. Converted into EUR, standard US Carmels (18/20, FAS US) work around EUR 6.10–6.15 per kg, while organic Nonpareil 27/30 FOB US is broadly in the EUR 8.50–8.60 per kg band, leaving Indian domestic prices roughly aligned to, but still below, full replacement costs when freight and finance are included. This pricing gap is attracting speculative buying but still restraining longer-dated coverage.
Supply & Demand Dynamics
On the supply side, California’s 2.7 billion lbs estimate does not imply a shortage in absolute terms, but marks a shift away from the multi-year surplus narrative. With average yields assumed at 1,940 lbs/acre, there is limited scope for a large positive surprise without exceptionally favorable weather and operational efficiency. Market participants read the estimate as confirmation that acreage rationalisation and agronomic constraints are capping upside to future production.
Shipments, however, tell a more nuanced story. California handlers’ April 2026 Position Report showed total monthly shipments at 219.9 million lbs, down 8.8% year-on-year. Exports fell over 10% to 167.3 million lbs, while domestic US shipments were flat at 52.6 million lbs. Year-to-date, total shipments of 1.996 billion lbs are 2.69% lower than last year, with exports only 1.28% softer but domestic use down a much steeper 14.4%. This pattern underlines that the tightening story is more about export-dependent markets and pipeline positions than about strong US consumption.
India stands at the center of this adjustment. April imports dropped to 31.6 million lbs from 45.9 million lbs a year earlier, a year-on-year fall of more than 31%. Only 995 in-shell containers arrived versus 1,407 the previous April, implying a substantial drawdown in the local pipeline. These lower arrivals are now colliding with seasonally firm demand and fresh bullish sentiment, giving sellers greater pricing leverage. At the same time, India’s macro backdrop — austerity measures and extreme summer heat pressuring retail spending — keeps underlying consumption at risk.
Fundamentals: Competing Origins, Currencies & Flows
Australia’s latest pre-harvest estimate, released on 13 May at 166,892 metric tons, adds another layer of complexity. While the headline tonnage is not dramatically disruptive, widespread shell staining after recent rainfall is raising quality concerns, particularly among Chinese buyers. This is already redirecting a portion of Chinese in-shell demand away from Australia and toward California, tightening the competition for US-origin in-shell supplies that also serve India and the Middle East.
Currency is amplifying these shifts. The Indian rupee’s slide to around 96.29 per US dollar leaves Indian wholesale almond prices trading roughly USD 0.10–0.15 per lb below full replacement parity. For importers, this means that buying replacement cargoes at current international values embeds an immediate FX loss unless further domestic price rises materialize. Speculators see this as a bullish arbitrage opportunity, increasing spot market participation, but end-users and large roasters are mostly restricting coverage to nearby needs. This divergence is keeping forward liquidity thin and volatility elevated.
Across Europe and the Mediterranean, local Spanish varieties such as Valencia and Marcona are holding broadly steady in EUR terms, with Valencia types around EUR 5.45–5.80/kg and Marcona generally EUR 6.00–8.10/kg FOB. These origins provide some regional diversification but are not large enough to offset any sustained tightening from California. Their relative price stability in recent weeks contrasts with the sharper moves seen in India, reinforcing the view that the current turbulence is primarily driven by import pipeline dynamics and currency, not a generalized global shortage.
Weather & Short-Term Outlook
Weather into early summer will be closely watched but, at this stage, the key drivers are structural rather than purely meteorological. With bloom and early development largely behind us in California, no acute weather shock is currently undermining the 2.7 billion lbs outlook. The main supply risk now lies in potential revisions if field checks later in the season reveal that the assumed average yield of 1,940 lbs/acre is too optimistic, particularly in older or marginal orchards.
On the demand side, India and China remain the critical swing factors for the next two to four weeks. In India, any moderation in heat or easing of fiscal pressure could quickly translate into stronger festival and gifting demand, validating current price levels or pushing them higher. Conversely, a prolongation of consumer stress would restrain offtake and could force some destocking later in the summer. In China, follow-through on the shift away from Australian in-shell due to quality worries will determine how tight Californian in-shell balances become.
Trading Outlook & 3-Day Price Direction
Over the coming 2–4 weeks, prices are unlikely to retreat sharply given the firm USDA supply signal, low Indian pipeline stocks and improving Chinese interest for Californian in-shell. Upside price risk is concentrated in any further deterioration in Australian quality perceptions, unexpected strength in Indian festival-related buying, or a downward revision to the California crop. Downside risk centers on a demand slowdown triggered by India’s macro headwinds or a stronger rupee that reduces imported cost pressure.
- Importers in India: Prioritize spot and near-position coverage rather than long-dated contracts. Consider layering small additional volumes on any temporary dips, but avoid overextending if rupee weakness deepens.
- European buyers: With local Spanish prices relatively stable and US offers firming, maintain moderate coverage through summer. Use current sideways EUR pricing in Valencia/Marcona as a hedge against potential US-origin spikes.
- Producers & handlers in California: The market now rewards patience. Limit distress selling, especially for high-demand in-shell and Nonpareil grades, and monitor Australian quality developments closely before committing additional volumes.
- Speculators: The structure favors a cautiously long bias in the near term, but position sizing should respect the possibility of a demand-led correction if India’s consumer environment deteriorates further.
Short-term, we expect the following 3-day directional outlook in EUR terms:
- US almond kernels (Carmel, Nonpareil): Stable to slightly firmer, with a mild upward bias as the USDA estimate is digested.
- Indian in-shell and kernels: Firm with potential for further small gains, driven by tight pipeline inventories and speculative interest.
- Spanish kernels (Valencia, Marcona): Largely sideways, tracking broader sentiment but buffered by local supply and demand balances.