Thursday, February 25, 2016

This Is Nuts: "Almond demand 'reviving' as prices retreat from record high"

Following up on January's "Almonds: This Is Nuts, Here's The Crash".
(apologies to Mr. Keohane & Co. @FT Alphaville for purloining the formulation)

From Agrimoney:
A retreat in almond prices from record highs is starting to do their work in reviving demand for the nut, producer Select Harvests said – although the outlook failed to stop a fresh tumble in its shares.
Last year's surge in almond prices, driven by prolonged drought in the key US producing state of California, had "had an impact" in encouraging supplies, while stemming demand, which had also taken a knock from tighter credit conditions in many buying countries, Select Harvests said.
"End users are reluctant to commit to inventory in such an uncertain market and are conducting their buying activities on a hand-to-mouth basis," the Australian-based group added.
Meanwhile, shipments from California began the year with a 12% gain - backed by 2015-16 production which, at 1.9bn pounds according to market estimates, had turned out better than initially expected.
The US Department of Agriculture in December quoted a figure for the harvest of 1.8bn pounds.
'Demand is re-emerging'
However, almond demand "is re-emerging in some markets as credit/stock begins to move through the system," Select Harvests said.
"The current market prices will stimulate demand in the most price sensitive markets - India, China and the Middle East."
The group flagged a mixed outlook for the Californian harvest this year, with – on the plus side for output – snowpack, an important water source, at near-normal levels and the blossoming period enjoying "some of the best conditions in recent years"....