Shares in Select Harvests plunged to their lowest in more
than a year after the almonds group ditched ideas of a rise in output this year, saying
that weather setbacks had hurt yields more than had been thought.
Shares in the Sydney-listed group tumbled more than 15% to
Aus$4.09 at one stage, to their lowest since April last year, before closing at
Aus$4.34, down 10.1% on the day.
The slump followed the group's announcement that, with virtually
all crop received at its key Carina West processing plant in South Australia, its
almond production estimate had "been reduced" to 13,500-14,500 tonnes.
That represented a second downgrade, after Select Harvests
last month cautioned that its production was likely to fall some 5-10% below
initial expectations of about 16,000 tonnes.
The revised figure also put the harvest behind last year's 14,200-tonne
Select Harvests left unchanged, at Aus$7.50-8.00 per
kilogramme, its forecast for prices received.
'Worst in 10 years'
The "disappointing" downgrade reflected nationwide results,
Select Harvests said, stating that "the 2017 Australian almond crop has been
lower than the industry expectations.
While the group said its investigations into the shortfall
were "ongoing", it added that "initial expectations are that the 2017 crop has
been more impacted by seasonal conditions than previously forecast".
The group cited behind its initial downgrade, last month, an
unusually high level of empty or "blank" nuts discovered during processing,
with one theory that temperatures were behind the setback.
Melbourne-based broker Baillieu Holst flagged earlier this month
that "the initial hypothesis for the high level of blanks is the cold October
where trees may have not developed fruit fully, followed by a mild December and
January which prevented the blank nuts from dropping off trees.
"Our industry feedback has suggested this is widespread - across
states - and was the worst event of this kind over the past 10 years," although
it is expected to be "a one-off".
The crop disappointment contrasts with improvement in output
from California, which is responsible for some 80% of global supplies –
compared with Australia's 8%, in line with European Union output – and where prospects
have been boosted by the end of a long-running drought.
The US Department of Agriculture forecasts California almond
output at 2.20bn pounds this year, on a shelled basis, up 60m pounds from last
year's record high, which was in turn up 13% year on year.
"The 2017 bloom period was extended due to cold temperatures,"
the USDA said.
"Significant rainfall before and during bloom made the
application of sprays difficult but was beneficial to the crop overall. Growers
reported set to be good and that nuts were developing well."