Almond Market Rallies as India Leads Bullish Turn on Tight Global Supply
Almond prices in India and globally are rallying on reduced California and Australian crops, weak container arrivals and strong demand. Outlook firm.
Prices & Market Mood
India’s almond kernel market has turned clearly bullish. Domestic prices have climbed from about EUR 8.55–8.60/kg to roughly EUR 9.05–9.10/kg over the past month (converted from USD), and are now trading near EUR 9.40–9.45/kg, a gain of roughly EUR 0.55/kg in a few weeks. Traders in India are already pricing in an additional upside of around EUR 1.10–1.15/kg in the coming weeks as tight supply from California and Australia feeds through to landed costs.
Bulk buyers of California-origin almonds in India’s wholesale markets report price increases from approximately EUR 645 to EUR 657 per 40 kg unit within three to four sessions, underscoring how quickly sentiment has flipped to the upside. At the same time, European prices for premium origins remain firm: recent indicative offers show US Nonpareil organic kernels around EUR 9.25/kg FOB and Spanish Marcona 14/16 types around EUR 8.15/kg FOB Madrid, confirming a broadly supportive global price environment.
Supply & Demand Drivers
The core driver of the rally is supply. Container arrivals into India from California in May are now expected to fall below 1,000 containers, a steep drop from earlier projections, after Californian grower and shipper prices jumped from about USD 2.05/lb to USD 2.55/lb in a short span. Higher origin prices have rendered many Indian import bookings uneconomic at prior domestic price levels, constraining near‑term availability just as demand is strengthening.
On the production side, California’s latest industry estimates put the current-season crop at around 2.65 billion pounds, versus roughly 3.05 billion pounds in the previous year – a decline of about 13%. Adverse growing conditions linked to a strong El Niño pattern are cited as the primary cause, reinforcing market narratives of structurally tighter supply for the 2025/26 cycle. Australia, whose crop will arrive into global channels around August, is also expected to post a smaller harvest due to similar climatic pressures, even as parts of the industry still highlight high underlying value for exports.
Demand is proving resilient. In India, wedding‑season buying and stockist restocking are providing strong pull, while in Europe, confectionery and snack manufacturers – heavy users of Californian almonds – are already signalling concerns about securing sufficient volumes for the second half of 2026. With combined California‑Australia supply projections now running visibly below expected global consumption, analysts see a supply‑demand imbalance that could persist at least through the third quarter.
Weather & Crop Outlook
Weather remains a key uncertainty. In California’s Central Valley, recent conditions have featured generally mild to warm temperatures with intermittent precipitation and leaf‑wetness episodes, but the dominant narrative is one of continued vulnerability to disease pressure and moisture variability during critical nut‑set and early development stages. Any additional weather shocks during the growing season would compound the already reduced crop expectations around 2.65 billion pounds.
In Australia, climate agencies and analysts are increasingly focused on a strong to possibly “super” El Niño signal developing into 2026, raising the odds of a hotter, drier pattern over key agricultural zones later this year. While this does not guarantee severe drought, the risk profile for water‑sensitive tree crops such as almonds is clearly tilted to the downside, supporting a cautious view on yield and quality for the upcoming Australian harvest.
Fundamentals & Risk Balance
Fundamentally, the market is tightening from several angles at once:
- Lower Californian output: A crop near 2.65 billion pounds vs. 3.05 billion pounds last year reduces exportable surplus and leaves less room for shipment surprises later in the season.
- Australian uncertainty: Expected output reductions linked to El Niño‑type conditions may constrain non‑US supply options just as many buyers seek diversification away from California.
- Logistics & currency: Reduced container flows into India and recent US dollar strength versus local currencies have lifted landed costs, reinforcing domestic price firmness.
- Demand stickiness: Food manufacturers in Europe and Asia are reluctant to materially cut almond usage in core products, treating current price rises as a cost‑of‑doing‑business rather than a trigger for reformulation – at least for now.
Key downside risks include the possibility of a higher‑than‑expected US subjective crop forecast in mid‑May or evidence of better‑than‑feared yields in California and Australia, which could ease supply fears and trigger some profit‑taking. Conversely, any negative weather surprise in either origin, or a further weakening of importing countries’ currencies versus the dollar, would likely accelerate the price rally.
Trading Outlook & Recommendations
- Indian importers & stockists: With local prices already firm and additional upside of about EUR 1.10–1.15/kg still being priced in by traders, staggered coverage for the next 3–4 weeks appears prudent. Avoid being completely uncovered for Q3 needs while container arrivals remain below normal.
- European industrial buyers: Consider advancing a portion of Q4 2026 and early 2027 coverage, particularly for Californian Nonpareil and premium Spanish types, to hedge against further tightening if Australian volumes disappoint or El Niño conditions intensify.
- Producers and origin sellers: Current levels justify patient, scale‑up selling rather than aggressive forward commitments. Maintain flexibility around the upcoming US subjective forecast, which could trigger short‑term volatility in either direction.
- Speculative participants: The near‑term skew remains to the upside, but a positive supply surprise from California or Australia could prompt a sharp correction; position sizes should reflect this two‑way risk.
3‑Day Directional Price View (EUR)
- India, kernel wholesale (California origin): Bias slightly higher over the next 3 days, with potential incremental gains of EUR 0.05–0.10/kg if container arrivals stay light.
- US export offers, standard kernels (FOB/FAS): Mostly steady to firm, with upside risk if additional bullish crop signals emerge from California in the near term.
- EU ports (Spanish & US origins): Stable to modestly firmer, as buyers begin cautiously adding Q3–Q4 coverage amid growing concern over combined California‑Australia supply.