This first fortnight of May has been marked by hot and summery weather in the first week and somewhat cooler with precipitation in most of the territory in the second week. The truth is that we are having a 2020 that, in terms of rainfall and weather conditions in general, is being unbeatable. The dry land is strong, which is good for the size, with water left over and also the cool temperatures mean that the fruit is not advancing. This is good not only for quantity but also for quality. We will see what kind of summer we have ahead of us, if it is a hot summer the harvest will be confirmed, if it is cool on the other hand, there will be a delay and everything will remain normal, subtracting the advance that already occurred in the first months of the year with high temperatures.
If we talk in general, and after the areas that we have been able to visit ourselves, as well as our conversations with the people in the different areas, it is like in California. We are going to have a pretty good crop. Perhaps for the first time, irrigated production is going to beat rain-fed production, which gives us an idea of how it is going to develop over the next few years. The new plantations are becoming more and more important until they reach the point where they will be the most important ones. This, apart from reducing the problem of the meteorological impact of flowering, means that the quality of our harvest will be higher, with more single-variety varieties and reducing the traditional problem of bitterness. This will be very good in terms of improving our export image, making it possible for us to enter unknown countries such as China.
As we have already commented in our previous reports, the harvest in California is going to be historic. Both Newfoundland's estimate and farmers' subjective estimates confirm a potential crop of around 3 BLB. The weather conditions have been on the upside and already this year we were seeing that the crop had exploded.
As far as prices are concerned, we have had quite a busy fortnight. The first week was very active for American almonds due to the drop in prices resulting from the estimate of the Newfoundland crop. It was an intense week, just like the last week of April, with many transactions at attractive prices. The lowest point we could see was around 1.90 $/lb, but there was a small rebound effect that pushed prices up to around 2 $/lb, if we talk about Std 5%, both in current and new crop. We could see that the other varieties, sizes and qualities remained in a price range very close to the Std 5% and the buyer, for little more, was getting better quality almonds. We saw that the supply started to become quieter and the demand was still quite active, demand, we suspect, coming mainly from Europe.
However, in the second week of May, last week, the subjective estimate is published, which does nothing more than settle the estimated Newfoundland figure, which, as we all know, is around 3 Blb. But as the market expected that the figure to appear could strengthen the market and it did not, the market took it very much to the downside and demand jumped to prices of 1.80 $/lb. At first the seller held firm, but quickly gave way to prices of $1.90/lb current crop and $1.80/lb new crop, if we are talking about Std 5%. Even in the current crop it came to slightly less. Again we see that demand is encouraged at these prices, not with as much activity as previous weeks, but there is movement. The supply, as the days go by, is stabilizing at these levels and by the end of the week we see a floor, at least momentary, and the supply begins to not listen to levels below 1.80 $ / lb, even begins to cost him to bid at this level. We do not know what will happen in the future, but today the American is establishing a possible floor in these values.
As far as Spanish almonds are concerned, we are experiencing a situation of absolute tranquillity. When in the first week it seemed that prices were more or less settled and some demand began to come in at levels of 4.60 €/kg for the current crop and 4.40 €/kg for the new crop, in terms of owner community, it is true that with a situation of little supply and little demand, it was difficult for the supply to enter at these prices and some operations were made at these levels but not too many, the news of the second week of the American subjective estimate arrived and the market took another turn. Once again, the Spanish one has to be updated, showing levels of 4.40 €/kg for the current crop and the new one is still in the process of being updated. In this situation, supply is even scarcer, although not impossible, let's say difficult to find. Demand, on the other hand, has disappeared. As a result, the situation is one of little activity, with no operations and a lot of husks, which are unattractive at these prices.
With regard to organic produce, demand has dropped considerably for the current crop, and there is a lot of interest in the new crop, but it is difficult for them to give in to the prices offered, which are practically double the conventional price. They are hoping that, with the good harvest to come, prices will be able to correct further.
To sum up, we are living in times that, apart from all that has been mentioned and what has been affected by COVID-19, the market is undergoing quite a few changes. The American almond is experiencing a situation of uncertainty due to all the open fronts they have, problems in India, large crop, possible lack of consumption... and this is noticeable in the instability we are experiencing. As far as the Spanish market is concerned, it seems that the American market is gaining the upper hand in terms of positioning and we are experiencing a hiatus that goes back a long way, perhaps all the way to 2020. Hopefully the situation will change and the Spanish almond will move a little more in the market, at whatever price, but there will be movement.
We hope this information will help.
