Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Select Harvest bullish on almond prices... but others not so sure

Twitter Linkedin

Shares in the Australian almond grower and food company Select Harvests fell after the company's annual general meeting, amid uncertainty over almond price prospects.

Select Harvests sees almond prices at A$7.50-8.00 a tonne over the July to June period, with 17% of this year's crop hedged at these levels.

The company achieved an average price of A$8.08 a kilogramme over the year to June 30, down from an average of A$11.45 in the previous year.

Trend of rising prices

But Paul Thompson, managing director of the company, was bullish on long term price prospects.

Mr Thompson noted a 60% increase in almond prices, as denominated in Australian dollar.

"We see no reason why this trend will not continue," he said.

Rising harvests

Almond demand is growing worldwide, thanks to perceived health benefits and the increased popularity of almond milk.

But supply is also rising.

The US 2016 harvest crop, which is nearly complete, is expected to be up some 10% year on year.

"Shipments of Californian almonds have been gathering pace since the beginning of January 2016 and continued over the year," Mr Thompson said, with volumes up 15% year on year over the last twelve months.

Strong demand

Booming almond demand has prompted increase planting in Australia, Spain, and the US.

But Select Harvests said that "these plantings will take several years before their volume will impact the market due to their age and associated productivity".

Mr Thompson said he was "confident that demand will absorb this volume".

"Clearly, fundamental demand remains strong globally," he said.

Water availability key

And water shortages, which have dogged the industry in California in particular, could squeeze supply.

"The main threat to supply is the availability of water in all markets," Mr Thompson said.

"In Australia, due to recent rain, we have taken the opportunity to secure water at lower prices for the 2016-17 growing season," he said.

Indian disruption

Broker Baillieu Holst trimmed its view of Select Harvests shares, downgrading the company from buy to hold, due to uncertainty over almond prices.

Baillieu Holst was upbeat on production prospects for the company, noting that "orchard health remains strong".

But the broker was less bullish on almond price prospects.

"Whilst we have observed higher spot prices in US/European markets, Indian markets remain subdued and recent demonetisation of Rs 500 and Rs 1000 notes may have negative flow-on impacts to markets".

"Until greater visibility is provided on these market issues we have chosen a much more conservative almond price point of A$7.85 per kg".

Select Harvests shares in Australia fell 2.9% on Monday, to 6.810 Australian dollar cents.

By William Clarke

Twitter Linkedin
Related Stories

Festive staff shortages 'likely' as British growers cut ties with UK supermarkets

Faced with mounting concerns over labour shortages and fears they may not be able to fulfil retailer contracts, some British growers have sought to cut ties with UK supermarkets in favour of companies elsewhere in Europe.

Hard Brexit to have 'catastrophic' effect on European meat industry; new report

A hard Brexit will have a ‘catastrophic impact’ on the European meat industry, according to a report published by Europe’s meat industry body, UECBV, as the UK and EU continue negotiations.

Manufacturers stockpile agrochemicals in bid to keep post-Brexit prices down for farmers

Manufacturers of crop protection products are stockpiling agrochemicals in warehouses in a bid to keep input costs down for farmers after Brexit, according to the chief executive of the Crop Protection Association, Sarah Mukherjee.

Dairy groups sidestep shockwaves from GDT price slump

Indeed, shares in the likes of A2 and Beston soar. Still, that does not mean there are no losers from the dairy price falls...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069