OVERVIEW
Shipments of Blue Diamond Almonds for the month of June were 187 million pounds, which is at the low end of industry expectations. This was down 33% to last year’s record month and marks the smallest month of shipments for the crop year. This was expected as buyers and sellers alike have limited their activities in anticipation of the Objective Estimate. Export shipments accounted for the shortfall at 126 million pounds, down 41% to last year. Domestic shipments rebounded from recent months reporting 61 million pounds for the month, up 11% to last month and down 5% to last year. This marks the third consecutive month of declining shipments which are now down 3.5% year-to-date after outpacing last season in recent months.
SHIPMENTS
India: Shipments to the Indian market were 15.5 million pounds for the month, down 61% to last June. Overall, this market is down 10% for the crop year. This is the fourth consecutive month shipments into the market were less than 1,000 containers indicating tight local supply heading into the new crop season. Harvest timing is anticipated to be two weeks later than last year which will spur additional purchases from the current crop to meet Diwali demand which will support pricing.
China: June shipments to the region were 11.5 million pounds, up 5% to last year. Year-to-date shipments were 13% ahead of last year’s pace. With inventories sufficient to cover demand through the Mid-Autumn festival in September, China may be slow to come to market following the Objective Estimate.
Europe: Shipments to Europe continued to lag last season coming in at 48 million pounds, down 41% versus last June’s record month. This market is down 10% for the crop season. The lighter shipments in the last quarter were expected as Europe experiences a shift back to more normal shipping patterns. Currency and finance costs continue to bring additional risk to the market in the short term. This is encouraging a draw down in local inventories and limited new sales. As a result, the market will need to replenish and is expected to increase their purchase intent for new crop in the coming weeks.
Middle East: Shipments to the region were 12.8 million pounds, down 62% to last year. This is not entirely surprising given the heavier shipments earlier in the crop year. Year-to-date shipments are now up 11% compared to last season. With the region working through high inventories, shipments continue to ease into the end of the crop year.
Domestic: The US market remains down 7% year-to-date. Consumption continues to be challenged across most channels and categories as continued inflationary pressures and high food prices affect consumer spending habits.
COMMITMENTS
Total commitments are currently 451 million pounds, down approximately 1% compared to last year. Uncommitted inventory is now down 4% to last year at 525 million pounds. Market activity for the current crop picked up in June with new sales of 155 million pounds, which is 30% higher than last year. The increased demand largely came from export markets. California is now 84% sold and shipped against total supply, equal to last year through June.
As previously noted, market activity has been rather limited in recent weeks as can be seen in the new crop sales figure of 65 million pounds for the month. This is down 39.5% compared to last year. Year-to-date new crop commitments now sit at 122 million pounds, which is down 48% compared to last year. Given the reduced coverage, new crop activity is expected to pick up in the coming weeks with the release of the Objective Estimate. The increased market activity should provide some much-needed price clarity and stability to the market.
CROP
The much-anticipated USDA Objective Estimate was released on July 12, forecasting 2.6 billion pounds for the 2023 crop. The forecast is based on 1.38 million bearing acres. This is up from the May Subjective Estimate of 2.5 billion pounds. This comes as a surprise to many in the industry who were expecting the Objective Estimate to fall in the 2.4 to 2.5 billion pound range.
With one shipping month remaining in the 2022 crop year, it is likely the carryout comes in under 800 million pounds. This is down from last year’s 837 million pound record carryout. With the updated forecast of 2.6 billion pounds, this puts the projected total supply for the 2023 crop year around 3.4 billion pounds. This would be on par compared to the current crop year.
Market PerspectiveShipments continue to ease to close out the 2022-23 crop year. While the industry will finish the year with a lower carryout, it falls short of the expectations many were forecasting a couple months ago. Buyers were opportunistic to add coverage for the current crop period. In the weeks leading up to the Objective Estimate both buyers and sellers had been reserved covering their new crop needs in anticipation of the updated forecast for the 2023 crop to provide more price clarity. Many export markets are not covered into the first quarter of the new crop season. With the release of the Objective Estimate now behind us, price discovery will come into focus as market activity picks up in the coming weeks. A sufficient supply of current crop pollinizers will pressure price while inshell availability remains tight for the balance of the season. As we move forward, the industry will continue to evaluate the 2023 crop in the weeks leading up to harvest. |
Laura Gerhard
Vice President
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