OVERVIEW
The December Position Report revealed robust shipments for the current crop year, totaling 229 million pounds – the second-highest December on record for the almond market. While down 4% from the previous month, this represents an 11% increase from last year. Export shipments continue to drive the momentum at 173 million pounds, a 12% rise from the previous year, while domestic shipments increased by 8% to 57 million pounds. Despite some recent loss of momentum, domestic shipments have regained ground, surpassing last year’s pace by 0.5%. Year-to-date total shipments maintain a healthy lead, extending to 9.9% over the previous season.
SHIPMENTS
India: Shipments for the month were 38.6 million pounds and represent a 16% increase to last year. Year-to-date shipments to India remain strong and now outpace last season by 28%. Local demand continues to be strong, and the industry is well-balanced due to supply constraints caused by delayed arrivals. All arriving products are moving directly through the system, with no cargo being stored. Importers have consistently profited since the beginning of the season. This is positive for the industry and should sustain activity through the month of January and on.
China/Hong Kong/Vietnam: Shipments to the region were 13 million pounds for the month. Year-to-date shipments gained momentum and are currently 21% ahead of last season’s pace, surpassing last year by 8%. Vietnam maintained a robust pace, now exceeding last year by an impressive 120%. Initially, California shipments to China were slow at the beginning of the crop year, as importers opted for cheaper options from Vietnam. However, activity revived in December, with the market processing and working through inventories in preparation for the Chinese New Year. Consumer demand during the holiday will serve as a barometer for shipment expectations going forward.
Europe: December shipments reached 62.3 million pounds, up 4% from last year, contributing to a 9% year-to-date increase compared to the previous season. The region continues to perform well, positioning itself for the upcoming holiday season.
Middle East: December shipments to the Middle East were 23.6 million pounds, down 11% to last year but up 7% for the season. Ramadan purchases have concluded, and challenges in the Red Sea are complicating product transit. The product needs to arrive by mid-February to be processed and available for Ramadan. Local prices have firmed in recent weeks as inventories have become tighter with growing transit times delaying product arrival. The demand outlook is positive for this region with buyers motivated to get more products moving quicker to rebuild their inventories to protect against potential further delays if the Red Sea situation persists.
Domestic: December shipments came in strong for the month at 56 million pounds, up 8% for the month. This market gained some ground which put year-to-date shipments in a positive position, up 5%. Demand continues to be a concern for the largest market as commitments continue to lag month after month, now down 16% to last year. Buyers continue to evaluate their evolving demand and continue booking short-term positions.
COMMITMENTS
Total commitments stand at 637 million pounds, an 11% decrease compared to last year. New sales for the month registered 219 million pounds, down 7% on last year. Overall, new sales exceed last year’s pace by 8%, all driven by export volume. Assuming a 2.45 billion pounds crop, shipments and commitments currently represent 57% of total supply versus 53% last year. Given the sustained shipment and new sales growth coupled with expectations of a smaller crop, many in the industry are eyeing a carryout below 600 million pounds.
CROP
Crop receipts for the year total 2.228 billion pounds, trailing last season by 6%. With most of the 2023 crop delivered, many in the industry forecast the crop size to be around 2.45 billion pounds. Rejects are forecasted to be higher at 3-4% compared to 2% historically. That would put a potential total supply for the 2023 crop year at 3.15 billion pounds, down 7% to last year.
Market Perspective
The December position report upheld a strong start to the crop year. This report was highly anticipated due to crop receipts and shipments. With most of the crop delivered, crop receipts are aligning with market expectations for a crop closer to 2.45 billion pounds. Year-to-date shipments sustained their strong pace compared to last season, driven by export demand. The industry must sustain this trajectory to reduce the carryout to more manageable levels. Prices continue to firm as demand remains active, setting the stage for continued strong shipments for the coming months.
The next major milestone is the almond bloom in February when the industry will begin to evaluate the 2024 crop’s prospects.
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