Treehouse Almond Market Update June 9th, 2023

California shippers reported 195.67 million lbs of shipments for the month of May and historically is the 3^rd largest number reported for the period although down 24% from last year’s record May shipments of 257.5 million lbs. The decrease in shipments does not gather much surprise and in some groups may be on the higher end of expectations as sales over the past 3 months lacked necessary volumes to suggest California could keep pace with last year’s numbers. This brings YTD shipments (+0.25%), essentially flat compared to this time last year. With new crop receipts only adding another 2.27 million lbs, this puts California at 79.9% sold and shipped in terms of total supply compared to 80.7% this time last year and ~7% less than historical sold/shipped for End May.

Export shipments totaled 140.7 million lbs, down 27% from previous May. YTD export shipments are up 3.2%. Domestic shipments continued to disappoint with 54.94 million lbs or -14.3% for the month of May. YTD Domestic shipments are now 6.9% down compared to last year.

New sales for May totaled 114 million lbs (-2.4% vs Last May). Export sales of 77.7 million lbs are down 26% compared to last year. Domestic sales totaled 36.3 million lbs, up 203% compared to May of last year.

Some Callouts:

• Western Europe continued its pull back shipping only 52.53 million lbs vs 70.89 million lbs a year ago. Spain (down 31%), Germany (down 32.5%) & Netherlands (down 31.5%) account for the vast majority of slowdown. While buying interest has picked up in the region over the past few weeks, the weakening of the Euro (down 4-5%) from end April combined with inflation and high interest rates kept buying activity at a modest pace. YTD shipments for the region are down 7%.
• Middle East, as anticipated, is down significantly (-58%) as buyers report ample stocks necessary to cover the summer months. YTD shipments for the region are up 23%
• India shipped 19.78 million lbs for the month. This is 14.2 million lbs less (-41.8%) than a year before. Continued market volatility has kept buyers sidelined. Below average temperatures have slowed crop development and further drawing concerns about new crop harvest timing. With a likely delayed harvest, further pressure will be put on filling Diwali (Nov 12^th) demand from current crop. This raises questions whereas if remaining inshell inventory in California will be adequate to meet India demand as well as provide a much-needed boost to June/July shipments from California.
• Domestic YTD shipments are down 6.9% for the year and down 14.3% for the month. As the world’s largest consumer of almonds, this downturn continues to draw major concern. New sales of 36.3 million lbs do offer a slight bit of encouragement considering this is a 203% increase compared to previous May but likely year end shipments will likely fall short from highs seen just a few years ago.

May marks the month when we get our first glimpse of new crop commitments. California reported 57.45 million lbs of New Crop Sales. This is 55% down compared to 128.6 million a year before and the lowest start since 2017 when New Crop Sales first begun being published. With a small flurry of buying activity ahead of the Subjective Crop Estimate, the 2.5 billion lb Subjective Estimate paired with a weak April position report quieted the market, allowing buyers to remain patient as they evaluate new crop needs. Inflationary pressures and rising interest rates have undoubtedly impacted buying behavior as buyers must carefully monitor purchasing decisions, being careful to avoid excess inventories when possible.

With market prices now back down to pre-bloom levels, expectations are for increased buying activity over the next several weeks ahead of the July Position Report. With pricing at historically attractive levels, the industry hopes to regenerate much needed new demand if it is going to get back to a more balanced supply/demand scenario.

Position Report – May 2023