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The Almond Board released the March position report on Thursday, April 9th. Key highlights as below:

Key Highlights

  1. March shipments were a record 208 million lbs., 12.6% ahead of last year and the fourth consecutive month of record shipments.
  2. Domestic demand remains strong with shipments up 31% over last March’s report, largely due to stockpiling by consumers as a result of COVID-19.
  3. Export shipments were also strong with a 3.5% increase year over year, with India and the Middle East being the main growth markets.
  4. New sales of 174 million lbs. are a record for March and greatly exceeded industry expectations. This puts commitments now 20% ahead of last year.
  5. With 2.23 billion lbs. shipped or committed, California’s industry is nearly 80% sold on total supply. This is the best position the industry has ever been in March.
  6. With continued uncertainty regarding the impact of COVID-19 on global demand and ideal growing conditions that could result in the largest ever crop in 2020, sentiments remain bearish. Pricing remains very favorable and is among the lowest levels we have seen in many years. As we near the lowest levels in this decade it is necessary to tread with caution as the change in trajectory could be sudden and unexpected.

Receipts

With just 2.70 million additional lbs. received in March, season total now stands at 2.53 billion lbs. – up 12% from last season. It would be now safe to assume that final crop receipts are not going to hit the 2.60 billion mark as feared a few months back and are likely to settle around 2.54 billion lbs.

Shipments

With 208 million lbs. shipped in March, this was the fourth consecutive month of record shipments. While the industry had anticipated March’s shipments to be stronger than last year’s 185 million and even break the record 193 million lbs. from March 2018, no one had anticipated the growth to be this big.

The domestic market was the primary driver of this growth with 79 million lbs. shipped, up 19 million lbs. (31%) from last March. While the growth of ingredients and innovations has also been talked about as helping grow domestic demand, this month’s shipments cannot be completely attributed to that and we must caution that the growth was primarily driven by consumers stockpiling as a result of COVID-19.

While container availability and port closures in export markets have been a point of concern for some time, the fact remains that export shipments were also a strong 128 million lbs., up 3.5% from last March’s 124 million.

Interestingly, India and the Middle East both posted healthy gains this month.

Year-to-date shipments now stand at a record 1.681 billion lbs., up 5.85% over last season. Year-to-date domestic shipments stand at 512 million lbs., up 5.2% over last season. The advancement of call-offs by customers in March has resulted in the sudden spike in the domestic markets' growth trajectory, however, it is not likely to continue to grow at this pace. With pipelines both at the retail and consumer levels having been well stocked we could see a slowdown in the coming months, but we still estimate the domestic market to grow between 3-5% this season.

Year-to-date export shipments now stand at a record 1.17 billion lbs., up 6.13% over last season.

Sales & Commitments

Since the start of the year we have seen prices drop by nearly 40 cents. Almonds prices now represent a great value to buyers, and this is evident in the fact that new sales in March were 174 million lbs.


Given that domestic demand is driven more by the non-commoditized section of the industry (value-added ingredients/inclusions), buyers have been willing to lock in most of their current crop demand at current levels.

As a result of the strong sales, commitments now stand at 555 million lbs., up 20% over last year.

Basis the strong commitments mentioned above, one can conclude that April will be another month of strong shipments and likely the fifth month in a row of record shipments.

In a Nutshell...

Assuming a 2.54 billion pound crop, the California industry has sold nearly 80% of total supply which is a feat in itself, given that this is the largest ever supply that the industry has dealt with. This only goes to show that almonds are a versatile nut with growing global demand and at the right price, California will move the crop no matter how big it is. In a normal world this report would have shifted the power back to growers, but with continuing uncertainty around COVID-19 and the impact of lockdowns around the globe it is likely that we will continue to operate in a buyer’s market for the near term. However, this too shall pass and as we reach levels that are near the lowest for this decade it is necessary to tread with caution as the change in trajectory could be sudden and unexpected.

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