Last Thursday, 9th May, saw the release of the April 2019 Californian Position Report. Notable figures from the report are as follows –
Total shipments for April at 177mlbs, an increase of 0.3% over last April.
Year to date shipments up 1.6%.
Uncommitted inventory down 14.65%. The industry is 86% sold on current crop.
China/HK/Vietnam down 33%. The effect of ongoing trade talks between China and USA.
Indian up 8%. Diwali demand will need to come from current crop.
California are well sold on current crop, (86%,) making it difficult to source small Cal varieties and carmel type grades. Most of the inventories that remain are Non Pareils or large Cals. Pricing on small cals and Carmels have remained steady for a number of weeks with Non Pareil prices slipping a couple of cents over the same period. Demand remains robust as indicated in forward commitment and spot stocks in Europe remain reasonably tight and in demand, especially on carmels types and small cals.
Last Friday saw the 2019 Subjective Estimate Report released at 2.50 Blbs, yield was forecast at 2140lbs per acre and bearing acreage at 1.17m acres. This number is probably towards the lower end of expectation as talk before the number was anywhere between 2.50-2.63B lbs.
Before the figure was released last Friday, new crop was trading at a discount to current crop, around 30cents per lb on standards and 15 cents per lb on NPs.
Going forward we expect new crop to continue trading at a discount to current however we do not expect this differential to narrow (current coming down to meet new crop pricing,) for quite some time. Current crop is well sold and with Diwali demand to come out of current crop we see a very difficult transition between crops. Small Cals and Carmel types are already well sold and new crop supply is still a good 4-5 months away.
Our advice going forward is to cover needs up to September/October sooner rather than later.
The Objective Estimate will be released on the 3rd July.