After months of low or very low activity, the Spanish almond market now seems to be picking up a little. I’m not talking about huge activity, or even significant activity. That would be unusual in mid-August. I’m referring to a certain level of activity that at least allows us to see the market trend. We may not know the exact prices of things, but we do have a rough idea.
Supply remains fairly subdued. Nothing is coming onto the market in any noticeable way, apart from responses to the odd interesting enquiry. What has changed is demand. For the past few days, demand has been somewhat more active – not primarily domestic, but mainly international. Perhaps there isn’t a great deal of activity; it’s very much on a day-to-day basis, but we’re already seeing a bit more than a few days ago, when there was none at all.
Could this be the start of the boost that Spanish almonds needed to rise in price? Will it be enough to cope with a foreseeable surge in supply ahead, based on a very good harvest? Or is this simply a one-off surge in demand from a buyer who lacks confidence in the market and will only buy what is strictly necessary?
Speaking of the harvest, we’re already starting to see signs of it, given that it’s come early, and the reports we’re receiving aren’t just from Andalusia, but also from Murcia, Castile-La Mancha and Alicante, amongst others. As expected, it looks as though this year’s harvest will be a small one. Lots of fruit on the tree = small fruit. There is talk of many consignments arriving directly without size 14, and comparisons are being drawn with the harvest from two years ago. It is still too early to draw any conclusions; one of the most important regions – the north (particularly Aragon), amongst others – is still missing from the picture. There are still some very significant regions yet to be accounted for. But for now, particularly with regard to ‘Lauranne’, the talk is of small fruit size.
It is also reported that the rain-fed areas are producing larger crops than the irrigated ones (particularly in Andalusia, where there was a clear shortage of almonds last year, whilst the trees are now well-rested and well-watered…), that yields are lower than expected (could this mean a smaller harvest than estimated?) and that the quality of the fruit is very good.
Therefore, at present, demand is outstripping supply, which has pushed the price up by around 15–20 cents from July’s levels, based on a relatively small number of transactions but with low supply that is expected to increase, judging by the US price (today, a standard 5% grade is selling for €6.30–6.35/kg). In September, supply should be higher… but will it be higher or lower than demand? That is the key question.
Another important point is what has already been sold. It seems that the south is heavily oversold, whilst the north is not so much. This is being discussed because, if supply is as high as it appears, any potential jitters (we’ll see about demand) seem likely to be lessened, as a large proportion of the supply has already been brought forward and a significant amount has been sold. Ultimately, there is an industrial limit for each producer which, however much one might wish to, cannot be exceeded. We’ll see what happens!
For the time being, California is in a strong position and is expected to remain so as long as the shell market continues to be this buoyant, with no competition for Diwali. This looks set to continue for much of September. Then, when they have to focus more closely on Christmas and Ramadan, we will see whether or not they can maintain price levels; this will also depend on demand.
We hope this helps.
Thanks
