The cashew markets moved up by 20-25 cents during the first half of April and have been relatively stable over the last couple of weeks. Demand has been robust in the US and EU along with interest coming from China and Asia-Oceania. Spot availability in markets remains tight and shipment challenges from Vietnam continue. The COVID-19 situation in India is worsening fast and this could potentially have a significant impact on their domestic demand. The current market sentiment looks to be driven by revised short crop projections in West Africa. There is also a short crop projected in Vietnam which could possibly get balanced out by a better crop from Cambodia. The next move in the prices could happen once the northern hemisphere crop concludes.

The California weather remains dry for the most part, while we did receive a small snow storm in the Sierra’s and trace amount of rain this past weekend, it was too little to impact what is sure to be a significant drought year.

On the heels of the April 9th shipping report, coupled with some industry news of projections of the August harvest, the market is working hard to find itself. The industry has now shipped over 1.978 billion pounds of almonds and is +17.7 % ahead of last year at this time. With four months left to report, the stretch goal will be to maximize shipments with the outlook to ship approximately 860 million more pounds, or 2.838 billion pounds for the season. This would mean a carry-out of 650 million pounds. This would also mean averaging about 215 million pounds per month over the remaining four months. With 811 million pounds already in commitments, it seems very much within our grasp.

The USDA Almond Acreage report was released on Thursday April 22nd. Last year the industry harvested 1.26 million acres per the USDA Acreage report. It is also important to note that Land IQ pegged the bearing acreage at 1.242 million acres. This year’s report 1.6 million acres planted up 5.3% over last year’s 1.520 million acres. Primary bearing acres for this year are estimated at 1.33 million acres.

2020 was a on-year for all three major pistachio producing countries. US exports year-to-date are up +14% YOY and are on track to move the higher supply for this crop year. Shipments have been limited due to lack of container availability and are expected to pick up in the coming months. Exceptional export figures for Iran continue and carry forward inventory is at all time low. This increase is due to imports into China, approximately 62,000MT of Middle East crop. This is 3 times the amount compared to the same period last year. Traditionally, prices are expected to increase after Nowruz, Iran’s new year on March 20th. Turkey had a bumper crop year, but consumption is yet to pick up for the current crop year.

US handlers, except Paramount, speculated prices may fall due to surplus inventory expected from Iran crop. However, the pistachio crop from Kerman province was severely affected by frost. With the supply crunch from Iran and low inventory levels, prices are expected to increase going forward. Inventory with Paramount will also influence the price levels. Given the buying spree, mainland China now has surplus inventory. Traders reported sluggish sales for the Chinese New Year. Therefore, prices from traders in Hong Kong are expected to be more attractive than offers from origins. With a growing Turkish crop and stagnant domestic demand, export of Antep kernels and ingredients is expected to remain attractive and pick up in the second half of the year. With record exports, Iran is now left with only 31% of the inventory compared to the same period last year. Given this, prices are expected to firm up by 10-20 cents per pound. Despite this, given the currency depreciation, it is expected to remain competitive compared to the US crop with a differential of nearly 50 cents per pound for the main in-shell grades.

California’s March shipments were up +76,946 MT compared to 62,063 MT in 2020, an increase of +24%. Year-to-date shipments for the 2020 crop year have increased by 14% to +540,617 MT, up from 474,152 MT in 2020. Crop receipts of +783,754 tons reported as of March 31st. For the 2020 harvest, this will be the final crop sum. The estimate for the crop was 780,000 tons. Domestic shipments for March 2021 on an inshell equivalent were down -18% FTM and -4% YOY. March 2021 export shipments were up 23% over March 2020. Strong FTM increased shipments for EU +34%, ME +172%, Asia 49%. Declines only occurred in US and India. 2020 US shipments were high due to start of pantry filling during this time. India year-to-date is +137%, and Indian market is finding California kernel color darker than its own.

Pipeline stocks got depleted during 2020. Replenishment at a lower cost base is powering the shipments. California commitments are on the higher end, and carryover stock is not expected to exceed 90k tons. 2021 crop volume is expected to be lower. Chile is having strong inshell demand from Turkey, Middle East and India, leading to price increase of about 10c/kg in last couple of weeks. Kernel demand is picking up. Chile is reporting 150k MT crop as compared to 135k MT, and quality is expected to be better than last year. Inshell trade has started, and Chandler harvest was expected to start by the first week of April.

The demand for U.S. peanuts continues to be very good. The latest reports released by the USDA and FAS indicate that peanut usage by U.S. manufacturers is up 3.4% versus last year, on a crop year-to-date basis (August ’20 – Feb ’21). All of the major segments (candy, snacks, and peanut butter) are showing increases in usage versus the prior year. U.S. exports are also strong, despite challenges in recent months related to the EU tariff on U.S. peanuts. Total U.S. exports are up about 12% crop year-to-date, with China continuing to play a major role in export volumes. Shipments to China are up 70% year-to-date versus the same period last year. The 25% tariff that the EU had imposed has also been temporarily suspended until July 1st, so this could possibly have a nearby favorable impact on U.S. shipments as well.

While there are a number of unknowns at this time concerning the upcoming crop, one factor we do know for certain is that the competition for acres is very real this year.

Australia: Given the favorable weather conditions after receiving good rain in December and early January, combined with new plantings coming into bearing, the 2021 crop is predicted to reach 50,770 MT NIS at 3.5% moisture compared to 46,900 MT last year.
South Africa: The 2021 crop is expected to be 49,000 MT, the same as 2020.
Kenya: 2020 crop is likely to close at 39,750 MT, at 10% NIS moisture content/37,000 MT at 3.5% NIS moisture content (7% above 2019 closing of 37,200 MT/34,700 MT). For the 2021 crop, the precipitation and sunshine has been good, and the nut quality is expected to be better than last year. Based on the recent year’s plantings and with new trees coming to fruition every year, the 2021 crop is projected to reach 45,300 MT/42,250 MT.

Chinese demand for macadamias picked up briefly due to Lunar New Year celebrations but the market has subsequently become more subdued again as prices are felt to be on the high side. Prices for S0 and S1 are firming up but at the same time prices for pieces (S4 and below) are adjusting downwards with a differential much higher than last year.

Sesame: Currently the US Sesame market has been feeling the effects of the global logistics issues which have been occurring for some time. There are delays on shipments and arrivals creating a high spot demand for immediate coverage. One of the largest exporters of Sesame is India, and they are facing higher maritime freight and potentially more lockdowns as Covid numbers are continuing to rise. Any lockdowns in India will ultimately lead to more tightness in the overall Sesame supply in the coming months and rising pricing on African & Central American stocks.

The India summer crop is expected to be a bumper crop. The harvest is just around the corner in June and would usually be a basis for a market correction. However, it looks unlikely that the Indian crop will be a factor for at least a few months.

Quinoa & Chia: 2021’s first quarter activities in Quinoa origins remained slow due to the off season. Amidst COVID-19 concerns and first phase of elections in Peru, exports were impacted wherein first quarter exports from Peru fell by 3-4% when compared to last year. Harvest season is about to start in May for Quinoa. Some minor crop loss in some of the growing region is expected because of extreme weather occurring just before the harvest begins.

Demand has been stable for Quinoa, but high spot demand is still the trend to cover for immediate need from buyers. A surge in demand for Chia was seen in both the mainstream markets of the USA and EU, which is a result of low stocks at both destination and origins. Harvest for Chia starts after July in the major chia growing origins, hence with harvest still few months away there could be some price increase for a short period of time and spot availability may look tight.

The overall hazelnut supply for the season seems adequate. The Turkish crop has been as expected, as well as other origin crops. Though arrival in the Turkish market was lower in earlier months, supply has slowly caught up. Turkish exports were lower than average until December, indicating that enough supply is available for the rest of the season.

The overall demand seems similar to previous years despite COVID-19 concerns. While retail chocolate and spreads are witnessing no reduction in demand, the gifting / duty free chocolate segment and HORECA segments have been adversely hit.

The local market in Turkey continues to be rangebound in a narrow range – the TMO price rendering the support, but most buyers unwilling to source at higher levels.

The last few weeks are also marked with a sharp currency appreciation – The TL has appreciated from lows of 8.50 during November to 7.35 by end of week 2. The TL prices have not reacted in tandem and have held levels higher than the TMO benchmark.

COVID-19 lockdowns remain a concern. Though we have not seen major impact on retail, HORECA and food service sectors remain under pressure with lockdowns in most of Europe.

The next trigger the market will look forward now is the new crop development – flower count in January/February. The unusually hot December was slightly adversative, with a possibility of early blooming and heightened frost risk. However, January temperatures have been normal, and we believe for now there is no reason to believe that the crop size for next season will deviate much from the average.