Now, we are going to recall the most important points of last week's release of US shipments for the month of August 2023 and we are going to review the market situation and evolution of the last few days.
The shipments figure is 212.01 Mlbs (-7.1%), with last year's August figure of 228.30 Mlbs. This is the second highest figure ever after last year's record
Regarding sales for the month we have a figure of 256.09 Mlbs, being last year 195.78 Mlbs, which means a +30.80% of sales in the month of August.
Export shipments have been 150.60 Mlbs (-7.5%). Domestic shipments were 61.42 Mlbs (-6.2%).
Regarding the crop, we have an entry of 70.13 Mlbs (-73.46%). However, in the total harvest, adding carryin (800.29 Mlbs (-4.36%)), we have 869.02 Mlbs (-20.69%). We clearly notice the influence of the delay in the harvesting of the crop generated by the heavy rains at the beginning of the second half of August (when harvesting begins).
Regarding the sold and not shipped we have a total of 621.89 Mlbs (+1.26%). Shelled would be, with respect to domestic, 251.65 Mlbs (-17.06%) and export 370.25 Mlbs (+19.14%).
With this situation, a total of 35.11 Mlbs (-86.14%) would remain unsold (inventory). This figure is not very representative due to the aforementioned delay in the entry of the crop.
With this data we can see that we have sold in general 833.91 Mlbs, -1.02% compared to last year when we had sold 842.46 Mlbs, that is to say that we are in a position of total sales somewhat worse than last year. We will see if this is normal or not when we know the harvest better. As we can see in the data, there is still about 3/4 of the carryin (surplus) not shipped, which means that at least until December/January, crop 22 will continue to be shipped. We also see from the data that at least 1/4 of this surplus is still unsold.
Regarding the destination of shipments, countries such as Canada, Japan, South Korea, India (very similar), France, Germany, Italy, the Netherlands (very strong increase) and the United Kingdom (very strong increase) stand out positively. On the negative side, there are important countries such as China (very strong decline), Saudi Arabia (strong decline), Turkey (very strong decline), the United Arab Emirates and Morocco (strong decline). In Spain, the situation has been negative, with 17.90 Mlbs this month compared to 23.40 Mlbs the previous year (-23.50%). In Europe in general, 64.60 Mlbs this month compared to 63.08 Mlbs the previous year (+2.41%).
Despite the negative data compared to last year, which was a record, the shipment data are not bad. With the delay in the harvesting of the crop, we cannot count too much on the fact that there is a new crop, another difference with last year, so, with these ingredients, the figures are not bad. In addition, sales for the month have been very good. Therefore, it cannot be said that the result of the published data is bearish.
On the other hand, we can see in the crop entry the delay in the harvesting of the crop, something that will be regularized in the coming months. From California we have been warned about the problems this year. Due to the heavy rains in August, the fields were flooded and as a consequence they were not able to harvest.
A lot of almonds fell to the ground and were soaked in water for a long time. As a result, we are told of a greater loss than expected, a smaller harvest and above all a very serious problem with the SD (serious defects). It seems that the average size is somewhat larger than last year, but with so many serious defects it creates a major problem in terms of quality and may affect the qualities, especially Supreme and Extra No. 1, as opposed to benefiting the amount of Std 5%, a star product in the European market, mainly industrial.
As the days go by, we receive some news from California that seem a little more hopeful. With the passing of the kilograms and the increased collection, the opinions on this issue are softening and are not as extreme as it was said by the first collections, by the first scandals. Many say that there is more damage, but not as extreme as it was said at the beginning. Others continue to say that the damage is high. We suppose that it also depends on the area and on each particular case.
The summary of the situation is simple. Still talking about the Std 5%, we have at $1.40/lb crop 22 and $1.50/lb crop 23 one extreme where there is an abundance of buyers and a shortage, if none, of buyers. At the other extreme, $1.50/lb crop 22 and $1.60/lb crop 23, we have an abundance of sellers and a shortage of buyers to say the least. At its middle end, $1.45/lb crop 22 and $1.55/lb crop 23, is where the few trades that are being made are being made. As we are already seeing, this year there will be an abnormal difference between the Std 5% and the rest of the grades and calibers. The reason is the one mentioned above, at least for now, until this issue is clarified. We observe differences of +0.20/0.25 $/lb between the Std and a Carmel 23/25 SSR, even more if we talk about SUP, for example, where we already find differentials of +0.30/0.35 $/lb. For example, the highest priced product, a Non Pareil Sup 23/25, we have seen at levels of $2/2.10/lb.
As we are already seeing, this year there will be an abnormal difference between the Std 5% and the rest of the grades and calibers. The reason is the one mentioned above, at least for now, until this issue is clarified. We observe differences of +0.20/0.25 $/lb between the Std and a Carmel 23/25 SSR, even more if we talk about SUP, for example, where we already find differentials of +0.30/0.35 $/lb. For example, the highest priced product, a Non Pareil Sup 23/25, we have seen at levels of $2/2.10/lb.
We will see who wins the battle, but this situation of lack of activity should not continue for long at this point in time, where we already see the end of September and we are beginning to see October on the horizon.
As for Spanish almonds, the situation is somewhat similar to that of American almonds. In this buyer/seller battle, the former does not accept the increase proposed by the latter, at least for the moment.
The campaign started with a lot of activity. Upon returning from vacation, the buyer was quite active and attracted by the prices, which were very competitive with respect to the American origin. This calmed down the summer mood of total lack of activity and uneasiness for not knowing what to do with a crop that looked good and with many doubts about what would be its destiny, especially in the low calibers, already aware of the problem of this year's crop, which is smaller than expected and smaller. But in the early stages of the season, the market functioned smoothly.
However, in recent weeks, several factors have come together. First of all, the change of trend in the American almond, a trend that becomes bullish. Then, the shell decides not to sell, to hold on and not to liquidate in the face of low prices and the new trend. As a result, the Spanish seller has to stop selling because he cannot buy, but he is a bit calmer because the most and the least already has September occupied. In short, the market is paralyzed by lack of supply looking for an upward push, as it happens in California.
The buyer seems to accept a few cents of increase, but a priori not much more, at least not what the seller is looking for. Of course the large sizes, as we know, are scarce this harvest, go their own way and are priced with abnormally high differentials. But the mid and low calibers are sought after, they are paid a little more, but not much more. For example, in 12/14 Lauranne, we see that it goes from 3.35 €/kg to 3.45 €/kg, but not more, for the moment. Then we have owners without size guarantee (which we already know this year what that means, very little s/14 and more b/12 than usual) that do have some more supply that we are trying to place, but it is difficult to place at levels of 3.30/3.35 €/kg. Rare market.
That is to say, the market rises, but it does it for lack of supply, for lack of operations, not for a normal functioning of the market. At present, the lack of operations is so great that we do not know exactly where we are, hence it is rarefied, we do not have enough data to know it nor enough business to reach a conclusion. Moreover, we are not sure if this rise is real or not. It may be the case that when the supply appears in greater volume, this will not be sustained. This is the battle we have discussed before, to see who gives in first or who has the need first. At this time, with the lack of data, we cannot know.
What does seem clear is that this year almonds are valued at a higher or lower price not by variety but by size. We see that the price premium that the Constantí or Belona, for example, has always had has been lost. We can find the case of a Guara or a Lauranne that is worth more than a Belona because of its larger size.
For the rest of the products, such as Marcona or Largueta, we do not have enough information. In the next reports we will provide the information that we begin to have about them
On the other hand, the organic product is in a somewhat different situation than the conventional one. At around 6 €/kg, there is a normal supply for the dates in which we are and perhaps a small lack of demand. It is not alarming, but it seems that demand is having a hard time starting. This year, apart from the aforementioned size, it is also very important to know the phosphonic acid value of the product in order to be able to market it. Without this value, it is almost impossible to do so.
We hope our comments will be helpful.
Thank you very much.
Muy currado