There has been a substantial increase in the price for Californian almonds since the December shipment position report was released on the 9th January. This movement has surprised many buyers, who had hoped for a softer market having seen shipments decrease by 6% in December and a little over 13% for the overall crop year. However the key figure revealed in this report was the crop receipts indicating 1.805b lbs. With the majority of the crop now in, it is widely believed that the 2014 crop will be circa 1.85-88b lbs, far less than the 2.1b lbs predicted in June 2014.
In light of this information buyers have begun to accept that there is little chance of the market weakening over the next 2 months, especially with bloom around the corner, and have started to cover their short term requirements.
Over the past few months buyers have been buying hand to mouth due to the high prices, the expectation of a large crop and uncertainty in the European Economy. This has left the spot market in Europe rather tight and it will become even tighter over the next few weeks as the pipeline runs dry due to port issues in Oakland.
We have seen December shipments rolled 2-3 weeks into January. We have also had information that Hamburg Sud will no longer be stopping at Oakland until an agreement has been reached with the port workers in Oakland.
Long-term it is still very difficult to predict where this market will go. Prices are extremely high and the Euro only appears to be going one way, when will price elasticity snap back? However in the short term we cannot see any weakness in this market. Crop receipts are down, there is little cover taken forward, material is short on the spot in Europe and will get tighter, the water issues won’t go away and the bloom is around the corner. With so many uncertainties going forward we expect hand to mouth buying to continue as buyers only address their short term requirements.
