American shipments April 2023, estimates and market analysis

We have the publication of the last report about the American shipments of the last month of APRIL 2023.

The figure of shipments is 197.26 Mlbs (-19.6%), being the figure of April last year 245.24 Mlbs.

Regarding the sales of the month we have a figure of 114.68 Mlbs, being last year's figure 168.01 Mlbs, which means a -31.74% of sales in the month of April. These sales are among the lowest in recent years (referring to the months of April) compared to even lower harvests.

Export shipments have been 140.44 Mlbs (-23.2%). Domestic shipments have been 56.82 Mlbs (-9.0%).

Regarding the crop, we have an entry of 2,563.54 Mlbs (-11.75%). However, in the total harvest, adding carryin (836.81 Mlbs (+37.60%)), we have 3,349.07 Mlbs (-3.06%).

Regarding the sold and not shipped we have a total of 564.65 Mlbs (-25.21%). The shelled, compared to domestic, would be 263.36 Mlbs (-9.58%) and the exported 301.29 Mlbs (-35.03%).

With this situation, a total of 788.75 Mlbs (+2.24%) would remain unsold (inventory).

With this data we can see that overall 2,560.32 Mlbs have been sold, -4.58% compared to last year when 2,683.35 Mlbs had been made, i.e. we are in a worse sales position than last year with less total crop available (-3.06%). This means that approximately 76.43% of the total crop has been sold. Last year 77.67% was sold. This means that, with equal shipments in the coming months until the end, there would be a carryin of around 650 Mlbs, but judging by the poor sales of the last shipments, it will be difficult to match the shipments of May, June and July of last year. In fact, if the trend of -19% lower shipments continues in the next shipments, we would go to a carryin of around 800 Mlbs, close to that of the current crop. Everything will depend on how the next shipments go.

With regard to the destination of shipments, countries such as China (very strong increase), Japan, South Korea, France, the United Kingdom, Saudi Arabia and Morocco stand out positively. On the negative side are important countries such as Canada, India (sharp fall), Germany, Italy, the Netherlands, Turkey (very sharp fall) and the United Arab Emirates (very, very sharp fall). In Spain, the situation has been very negative, with 12.18 Mlbs this month against 31.41 Mlbs the previous year (-61.22%). In total the crop has been exported this year 148.69 Mlbs and last year 159.96 Mlbs (-7.04%). In Europe overall 50.97 Mlbs this month compared to 71.28 Mlbs last year (-28.49%). The total crop has been exported to Europe -2.19% less than last harvest.

With these data, we can see many more bearish factors than bullish ones. The crop seems to be finally at levels of 2.56/2.57 Blbs, very close to the 2.60 Blbs estimated in the objective estimate. However, with less crop than the previous year (2.90 Blbs), it seems that there will be a very similar surplus, which makes it very clear that we are facing a consumption problem. Far from increasing, even if it is residual, we can see that many important destinations have reduced their imports and there are still 3 difficult months of shipments left for this crop. For example, this is the case of Canada, Japan, South Korea, India (this case has not decreased, but has increased very little, only 2% so far) and above all Europe in general and the American domestic market itself. On the other side of the scale are China, the Middle East and North Africa, where there has been a very positive increase in shipments.

The poor sales of the last 3 months lead us to think that the next shipments will not be very good and will hardly surpass last year's, which were spectacular. Hence, we are thinking of returning to a high carryin. Above all, the feeling that as the price rises, sales plummet (these three months of poor sales coincide with rising prices). One might wonder whether it is really a price problem or a consumption problem. The price in recent months has risen from the average so far for the whole crop, which is at 1.67 $/lb, peaking recently at 2 $/lb (which has been very short-lived) and its lowest point at 1.50 $/lb (which has been quite elapsed). But it is not an extreme variation, we are really talking about small variations in price that have affected sales quite a lot. An important fact is that in the 2019 crop, which was a crop of 2.53 Blbs, very similar to this year, the average price was 2.42 $/lb, well above the average of this crop and the surplus was 450 Mlbs. So, we repeat the reflection: is it a price problem or a consumption problem?

In recent weeks we have had the publication of different estimates for the 2023 crop, some with more repercussions than others, which we are going to show in the following table:

The following table shows the most important estimates and their variation with respect to reality in recent years:

On the way to all these estimates, the official acreage estimate has also been published giving a figure of 1,380,000 acres, which would be +2.2% over the previous year.

After the publication of the Terra Nova estimate, the first estimate with the most impact, prices went up to levels of 1.95/2 $/lb, always talking about Std 5%. However, the buyer at this level was very little active and, with the passing of the days and the lack of activity, there was a fall in the price until it reached levels of 1.85 $/lb with the publication of shipments. The following day, the subjective estimate was published, showing a figure of 2.50 Blbs, higher than expected, causing the market to drop again in price and a clear downward trend, which is the situation we have today. The supply is now at levels of 1.80 $/lb, not a very high supply either, and the demand is more downward, looking for cheaper prices already seen during this harvest. It now remains to be seen how much resistance the American seller will put up to this downward trend and buying pressure. But it would not be strange to see prices between 1.70/1.80 $/lb in the near future. How far this trend will go, time will tell. But we will probably be in this situation until the objective estimate in early July.

It is also important to note that there is a difference of about +0.20 $/lb between current and new crop prices. It seems that the seller is diffused about what will really happen in the next harvest and places this differential not very well accepted by the buyer.

As for Spanish almonds, all the talk from now on will be in a framework of very low activity, the price, following the Terra Nova estimate and the rise in the price of American almonds, went upwards to levels of 4.30/4.40 €/kg depending on the quality and size, always talking about the Comuna unselected. And it has remained there until today, despite the downward trend in the price of American almonds.

It is true that these are not historically active months, but the very low activity, especially at export level, is striking. As we have seen with the American almond, Europe is not very keen on buying and this obviously affects the Spanish almond, especially as it is its main market. Then its competitor, the American origin, has been correcting the price downwards and the two have become increasingly separated.

In fact, currently, with all that we have mentioned, American almonds, at the exchange rate, are around 4 €/kg and Spanish almonds are still holding their own at the levels mentioned above. This difference in price is difficult for the buyer, who, we repeat, is not very active in buying almonds in itself. Therefore, in view of the downward trend, it is logical that the price of the Spanish variety will also fall in the next few days.

As a result of the American subjective estimate and seeing that, at least until the objective estimate in July, the market is unlikely to rise, supply has appeared in greater volume. Until now, it was very stable at the aforementioned prices, with not too much intensity or apparent need and more active in medium and small sizes. Now it is more apparent, with the awareness that it will probably lose a few cents and we will probably return to levels of 4.10/4.20 €/kg that existed before the rise.

Demand, on the other hand, remains generally inactive, with interest focused on large sizes and organic almonds, which is where the supply is most lacking. For this reason, we have been able to observe differentials of +0.30/0.40 €/kg between owners and medium sizes with respect to large sizes, which are in very short supply.

The organic market, on the other hand, has been very active in recent weeks, with clear buying interest and very little supply. There is already talk of levels around 6.70 €/kg and it would not be surprising to see higher levels in the coming days. It seems to have found its floor at 6.50 €/kg and to have turned the situation around.

The rest of the more specific varieties (belona, constanti, marcona, largueta...) are so inactive that it is difficult to even find a transaction that allows us to have an idea of the price.

It is important to point out that a few days ago, the subjective estimate of Spanish almonds offered by AEOFRUSE (Spanish Association of Nut and Carob Producers' Organisations) was published, giving a figure of 128,419 tonnes (19,986 tonnes of this figure are organically grown). If last year's estimate was 75,051 Tn, this represents an increase of +71.11%.

This estimate is based on a planted area of 638,890 ha, of which 525,840 ha are productive, 436,675 ha are rainfed and 89,165 ha are irrigated. Of the total planted area, 25% is devoted to organic almond cultivation and 130,145 Ha are productive.

The increase in the crop can be explained by the rest of the tree, especially in the northern area, due to the severe frosts of last year, but it is clear that this figure could be lower if the current severe drought, high temperatures and no further rainfall continue. Let's say this is this year's potential crop and it remains to be seen whether the tree is able to produce it or not.

It is important to add that this estimate has been taken without taking into account Portugal, which is estimated to have a production of between 28,000/30,000 tons.

We hope this helps.

Thank you very much.