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The Almond Board released the April position report on Tuesday, May 12th. Key highlights as below:

Receipts

With just 550,000 lbs. received this month, year-to-date receipts stand at 2.533 billion lbs.

Given that USDA receipts stand at 2.543 billion lbs., we would estimate the final crop number to settle down around 2.545 billion lbs.

Shipments

With California handlers shipping 181 million lbs. in April, this was the 5th consecutive month of record shipments. Year-to-date shipments now stand at a record 1.863 billion lbs., which is 5.5% higher than last season.

The growth in shipments were primarily in the domestic market, which recorded a 15% growth over last April. With 77 million lbs. shipped in April, year-to-date domestic shipments stand at a record 590 million lbs. which represents a growth of 6.39% YoY. In the month of March, the 31% growth in domestic shipments was attributed to pantry stocking but the fact that we continue to see double digit growth in April is an indicator of the strength of the domestic market. While retailers are finding it difficult to project future demand due to uncertainty surrounding consumer behavior in a post COVID-19 world, we are still likely to see the domestic industry continue to grow between 5 - 6%

With lockdowns and port closures across the globe, exports in April were 103 million lbs. – down 5.35% from the 109 million lbs. last April. The bulk of the decline in exports was on account of the severe lockdown in India, which resulted in shipments declining 52%, from 13.69 million last April to 6.5 million lbs. this April. This could be a blessing in disguise as it means pipelines in India will need to be quickly replenished once the market reopens and sellers would not necessarily be at the mercy of Indian buyers.

Shipments into Western Europe were 53 million lbs. (up 7%) with Germany, Netherlands, UK and France all contributing to the increase. Over the last few weeks we have seen increased buying activity from European buyers who were incentivized by lower price levels, and expect to see continued growth from this region.

See below for growth across key export regions:

Sales & Commitments

Sales in April were 124 million lbs., down 14% from last April.

Lack of sales can be attributed to the following:
a) With the COVID-19 situation, end consumption has slowed down. As a result, existing coverage that buyers have is likely to extend longer than they had predicted.
b) With prices having corrected after a prominent trader released their crop estimate of 2.96 billion lbs., buyers are willing to delay purchase decisions in hopes of covering lower.
It is worth mentioning that even though sales in April were relatively lower, the industry remains in a well committed position as a result of business that was put on the books earlier in the season.

It is important to note that more than 50% of future commitments belong to the domestic market and it is safe to assume they will translate into actual shipments.

Assuming a 2.538 billion crop the California industry has sold 84% of total supply, which is in line with historical position for April.

Subjective Estimate

In addition to the April shipment report, the Subjective Estimate was also released on Tuesday and forecasts the 2020 crop at an estimated 3.00 billion lbs. This represents an increase of nearly 18% over the 2.55 billion lb. 2019 crop. This estimate assumes a bearing acreage of 1.26 million acres with a yield of 2,380 lbs./acre., which is 10.2% higher than the 2019 yield of 2,160 lbs. per acre.

The Subjective Estimate is in line with a previously released 2020 crop estimate of 2.96 billion lbs. Since the release of this 2.96 billion lb estimate the market had already corrected by about 30 cents per lb, and it appears that the market may have already been trading basis a 3 billion lb. crop estimate. It is also important to note that the Wonderful Company also released their 2020 crop estimate on Tuesday at 2.85 billion lbs.

Only time will tell how the 2020 crop actually materializes, but it is encouraging to see all three major estimates released thus far are within a 5% range.

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