Almonds: watering down expectations

Shipments still down

Monthly shipments only reached 214.9 million pounds in February. This is 3% less than the 1.6 million pounds shipped in February last year. Monthly exports declined by 2% to 158.8 million pounds as compared with last year’s 162.3 million pounds and domestic shipments by 4% to 56.2 million pounds as opposed to 58.8 million pounds. Year-to-date shipments are, however, a bit better. Grand total shipments are relatively flat on last year at 1.6 billion pounds. Domestic shipments range nearly 2% lower and exports less than 1% lower.

Shifts in global demand

India is the leading export destination for US almonds, yet shipments are still lagging 16% behind last year and February failed to bring the hopeful turnaround. Monthly shipments, in fact, ranged 6% lower than last year at 25.6 million pounds. With Australia’s new crop arriving there is also little chance that this will change in the next few months.

Shipments to the United Arab Emirates may be 2% down, but traders attribute this to the country’s role as broker for the Middle East with some neighbours such as Iraq or Jordan switching to direct imports. US exports to Turkey have also surged by stunning 55% this year, which highlights the keen interest of the region in California almonds, despite prices being high.

Spain is the largest importer in the EU, but shipments range 15% lower than last year. Contrary to this, US exports to the Netherlands have picked up by 27%. Despite the strong fluctuations in different countries, the total shipments to Western Europe as a region only range 3% lower than last year at 352.5 million pounds.

Traders not too worried by tariffs

Although shipments to China have slumped by 47%, Californian traders highlight that US exports to Southeast Asia have surged by 24% to 56.5 million pounds in comparison to last year this season so far, indicating that China has partly offset direct shipments from the US with imports from other countries in the region. As China has responded with an additional 10% tariff for almonds and many other agricultural products to Donald Trump’s 20% tariff on all imports from China, there is no hope that trading will revive. Traders, however, do not appear to be too worried about the impact any further potential retaliatory tariffs may have at present.

Tariffs are also an issue for US exports to Canada and Mexico. Although the two neighbouring countries do not presently feature in the top ten export destinations for almonds this season, Canada and Mexico ranked in eleventh and fourteenth position in the past four marketing years according to official US statistics. Trump slashed a 25% tariff on all imports from these two countries as of 4 March but has since exempted some products listed in US-Mexico-Canada agreement (USMCA). Although negotiations are underway, expectation is that the situation will escalate for Canada. The country has already outlined a next round of retaliatory tariffs of 25% on USD 125 billion in imports from the US with a list including all nuts, which will become effective should the US tariffs prevail for 21 days. Mexico has currently adopted a more diplomatic approach towards the US but will announce counter measures if tensions get worse.

Difficult transition ahead

As crop receipts have slowed and have only reached 2.68 billion pounds this season so far there is no chance that the crop size will meet the objective estimate of 2.8 billion pounds. Olam has rather issued an estimate over 2.7 billion pounds. Although crop receipts range 11% higher than the 2.4 billion pounds registered in February 2024, computed inventories stand 1% lower than last year at 1.54 billion pounds. Industry stakeholders anticipate a tight transition period.

Watering down expectations for 2025/2026

With the blooming period complete speculations abound about the supply scenario in 2025/2026. Blooming has produced mixed results with mainly cool and damp weather conditions prevailing. Yet, there were enough dry and warm spells for bee flight and pollination was adequate. Growers, however, state that nonpareil bloom was lighter and are concerned about the effect the rain has had on the soil and in how far this may cause stress for the trees. Another aspect to consider is that budgets have been stretched in the past few years, with farmers having to restrict nutrient and fertiliser applications. The growing season has started and speculations over the new crop will prevail until the subjective estimate will be issued in May.

Water is also important. Good news is that snowpack is good in the north and that reservoirs are well filled in most parts of California. In more southern regions, water supplies are, however, more restricted. Hope is that cold and wet weather conditions will change this situation at the end of the week as Select Harvest U.S.A. reports. Yet, moderate drought conditions prevail in the southern parts of the state and water supplies will remain tight in summer. Although it is way too early for exact estimates, a bumper crop is out of the question as conditions would have to be much better. Industry representatives rather expect the crop to be similar in size to the past two years.

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