ao link


Linked In

Almond market sees contract defaults, after 'aggressive selling' hits prices


Select Harvests curbed hopes for its almond sales prices, citing a “significant softening” in the market spurred by “aggressive selling” - although seeing a US crop estimate overnight as fostering some recovery in values.


The Australian-based almond producer and processor nudged higher by 400 tonnes to 23,000 tonnes its forecast for its latest harvest, which is now 60% processed, taking it above the 22,690 tonnes produced in 2019.


However, the group, which had in May said it expected to report an average price of Aus$8.20 per kilogramme for its crop, revealed that, with more than 80% of volumes sold, it had achieved just Aus$7.25-7.75 per kilogramme.


That implies a marked market fall-off, with Select Harvests in May saying its 2020 crop was more than 70% committed at prices of Aus$8.00-8.50 per kilogramme.


‘Aggressive selling… contract defaults’

The group said that a forecast of a record US harvest this year, besides “challenges relating to market access” stirred by the coronavirus pandemic, “has resulted in aggressive selling by some marketers”.


This in turn had prompted “a significant softening in pricing, and as a consequence the market has seen contract defaults”.


Australia’s Almond Board in April reported a 29% slide in the country’s shipments of the nut, led by a 72% slump in exports to India.


“Many markets have delayed shipments as a result of lower demand caused by Covid-19 impacts,” the group said.


‘Prices should firm’

However, Select Harvests added that its export customers “have now commenced taking shipments and near-normal levels”.


“Underlying global demand remains strong, and we are confident consumption will continue to grow as distribution channels return to normal.”


The group also flagged a potential boost to prices from a forecast on Tuesday by the US Department of Agriculture of a 3.00bn-pound harvest in the key growing state of California – unchanged from an estimate made in May.


Many commentators had expected an upgrade, thanks to good growing conditions.


“We anticipate as a result of this forecast market prices should firm,” Select Harvests said.


Share price reaction

The group added that the overall quality of its latest crop was “good”, although some had been damaged by the latest harvest rains and wet storage conditions as rains picked up in Australia, breaking drought in many areas.


Indeed, the wetter conditions had “negatively impacted the demand for almond hull from the stockfeed industry”, with pasture condition improved, although Select Harvests was seeing a benefit from “pleasing” cuts in water prices.


Select Harvests shares initially tumbled by 8.6% in Sydney on the update, before recovering some ground to close at Aus$5.91, down 2.3% on the day.

Related Stories

Evening markets: Grains suffer touch of late-week profit taking

The likes of corn and wheat trade lower in closing deals of a positive week. But the vegetable oil complex, and canola, stay strong

Failed hold-outs may foster dairy price gains at next week's GDT auction

Futures prices suggest modest gains in the offing at Tuesday’s GlobalDairyTrade auction - for whole milk powder, at least

Microsoft mogul makes a mint out of betting the farm

Prices of US farmland, of which Bill Gates is the biggest owner, are rising at their quickest since 2012

Weekly grain and oilseeds market view from Europe, April 16

UK wheat import needs to extend into early 2021-22... Cold European temperatures... "Rapeseed prices may be firm for a while"...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2021 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069