Raw Material Report February 2019
Check recommendations for Hazelnuts and dried apricot as market is scarce
The Almond Board of California has released the January position report detailing shipments of 209.61 million pounds up 8.3% on last year:
- This is an incredible figure for the month of January over 40 million pounds more than which was the second biggest January in 2016/17.
- Market expectation was for a flat (at minimum) to 210 million pounds (at maximum) with California reaching this despite global issues they will be very confident.
- Both the US domestic and export markets set records for the month (this is the fourth month in a row for records in the US domestic market)
- YTD we are 1.23% down so very close to flat
- Crop receipts are only 0.39% up and now we are in February we can pretty much agree that this crop will not hit 2.30 billion pounds (The Subjective Estimate)
- Last year the crop hit 2.26 billion pounds and was at 2.24 billion pounds at this point in January
- Committed shipments are down 10.47% but this was to be expected with California not interested in participating for later positions at a discount.
- India had a massive January
This is a bullish position report and with California very confident that buyers are short and hand to mouth so on the nearby we expect prices to increase
The advise is to cover you needs asap because of below mentioned reasons;
The remaning quantity of current crop is around 38 000 mt as you can see in the chart below.
The big players will be in the market to cover their needs
TMO has only 10 000 mt stock from crop 2018 and 60 000 mt from crop 2017, so if they start to sell to the market average quality will be lower!!
Ramadan Holiday Season is 5th of June when the demands of muslim countries will be very high.
|Remaning from crop 2018||38000|
Strong January shipments came as California packers expected. Inshell shipments were more than double last year with heavy amount to Middle East. Shelled shipments were also healthy throughout the world major markets and overall increase from last January. Once prices bounced off the bottom buyers had little reason to wait as the market firmed and signs didn’t point to weakening in near future. Industry becoming well sold and chandler material in tight supply.
This table gives a summary of this year versus last year supply:
|Carry in||65 K tons||56 K tons|
|Crop||672 K tons||628 K tons|
|Total available||737 K tons||684 K tons|
|Shipped||369 K tons||354 K tons|
|Left to ship||368 K tons||330 K tons|
The market is very complex at the moment. On the supply side we have the overhang issue from Tanzania (sale to Kenya are just fake news), plus the expectation is one of bumper crops everywhere, due to favorable weather conditions. Based on these optimistic calculations there appears to be an oversupply situation on the market.
So far only the first fly crops have come in, which account for about 10-15 % of the total supply. The bulk second crops start in mid March and only if this goes well, will you get the numbers everyone is assuming. Already there are stories of wind / rain / infestation, which we are sure are true in some areas, but too early to assess if significant.
On the demand side we have seen major growth in India and a flat line in Europe and US which is good considering the high prices. However, moving forward most buyers are short at the moment expecting lower prices. If there is any crop/logistical issues over the next couple of months we could see another market rebound before the quieter summer months.
- Exports in January were 8,288 tons, compared to 7,836 tons last year. An increase of 6%
- Exports year to date are 57,887 tons compared to 59,363 tons last year. A decrease of 2.4%
- Average export price for whole apricots for February was $2,745/ton FOB compared to $3109 last year.
- Steady export numbers again. We believe that the crop will be exported in its entirety. Prices increased 5 - 8% during early January due to short covering by packers who are faced with dwindling supply.
- We go into the bloom period with very little supply and we believe the majority of packers are still running short positions forced on them by tightened credit lines.
- The winter has been moderately cold, with good snow last week, the trees remain dormant, and an early bloom is not currently expected though weather is forecasted to warm up later this week and through to the end of February.
- The lira has stabilized and has been trading for the past 3 months in a relatively tight range between 5.20 and 5.40 to the US$. Currently it is at 5.29.
- With prices still well below 5 and 10 year averages, down side risks are minimal. On the other hand any adverse weather over the coming 2 months would cause a sharp rise in prices given the tight supply situation. Any buyer not covered through new crop in late August are recommended to cover at this time.
Firm pricing from all worldwide origins.
- Dispite slow market activities in Turkey, prices for Turkish sultanas is stable and no signs of decline.
- There is a lack of Iranian products in market due to the sanctions. Iran has more or less disappeared from market as an important player, due to the political situation.
- The crop in South Africa is expected to be slightly late and less than expected. Prices are above last year’s levels and will be sold close to the Californian prices.
- Crop in California is short and they maintain high price level for their Thompson raisins.
- Chile indicate that all is going well and crop similar to last year’s.