Global Nuts Market & Crop Update

Almonds

Fall has not brought fall like weather to California, as we are experiencing triple digit temperatures throughout the growing region. This has certainly sped up the almond harvest as the heat has dried things down quickly. Evidence by the first position report of the new crop year, over 290 million pounds have already been received, a 313% increase over the same time last year. While the crop is expected to be larger than last year, it may not be as robust as first thought. This increase is more of a timing thing with the new crop being on time, versus last year’s crop being late and slow to come in.

Just two weeks ago the Almond Board released the August position report showing the above crop receipts to date. This time last year the industry had only received 70 million pounds. This may be due to the extreme heat we have been having through August and now through September. By the time the Almonds hit the ground they are being swept up as moisture levels indicate very low moisture. This is quite the contrast to last year when we had delays in harvest and even rain during the harvest slowing everything down. The reality is, this heat may take tonnage out of this year’s as the moisture in the almond overall may be 1-2% below normal.

Shipments for the first month of the new crop year were 168.3 million pounds, down 20.63% to last year’s 212.01 million lbs. It is very apparent, this may be a result of the industry not having much, if anything, of the previous crop left to ship. The carryout is made up mainly of unsaleable inventories as most expected it would be after a tough year of serious damage. Expectations for September should show a notable improvement as the industry starts to ship new crop. Look for a stronger fourth quarter as production of new crop ramps up.

Domestic shipments for August was up a modest +1% with 62.05% shipped. While modest it is
a continuous growth going back to last year, when sales finished up 1.5% over the previous year. Meanwhile, export shipments were down -29.5% with 106.2 million pounds shipped
versus last year’s 159.4 million pounds. Again, the industry showed that there was just not the quality almonds in the carry-out needed to ship during the transition period. The difference is vast between an 800 million pound carryout and a 500 million pound carryout. Look for a vast improvement in the months ahead.

Total new sales for the month were 159 million pounds, down 38% to last year’s sales of 256 million pounds. One only has to look to new crop sales in July of 379 million pounds to last year in July the industry only having sold 205 million pounds. With expectations of a larger crop this year early selling existed, where as last year it was the opposite.

Commitments this year are down 2.3 % standing currently at 607.6 million lbs. vs last year’s 621.9 million pounds. This can be attributed to mostly domestic buyers holding off, not buying into rising almond levels. The industry has not seen such low commitments at this point since 2015. With that said, the stand-off will have to end soon as inventories will soon be depleted. Meanwhile, export commitments are up 14% year over year, with markets assuring themselves of bookings to restock inventories through the holidays.

After two months of harvest, while it is still too soon to estimate where the crop is, it is confusing many as the crop is down in one area and up in another throughout the growing region confounding many and questioning whether it can even reach the objective estimate of 2.80 billion pounds. Thus, growers are holding off and not wanting to push sales past December until a better idea of the crop can be formulated.

The August position report was mixed with shipments well below expectations. This puts the industry in a hole vs last year, that may be hard to climb out of.

Even with a smaller carryout this year, with a crop that will be larger than last year, the total production with carry-in will exceed last year’s almond supply.

With a port strike threatening to hit the east coast in October, a ripple effect may disrupt exports to the rest of the world.

Cashews

In-shells:

• Cashew prices have been stable with a slight downward bias for most of the last month. However, towards the later part, the sentiment amongst shippers has changed as many processors realize they have insufficient coverage of inshells to process through the rest of the year.
• September month will see lower inshell imports into Vietnam which will mean lower need for cash.
• We estimate all distress sales - sales of kernels to raise cash to clear inshells shipments - will pause and processors will start working towards higher sales price levels for kernels.
• If demand continues to remain firm in the next months, we will see price appreciation as demand will then exceed supply.

Hazelnuts

Supply Side:

• The 2024 season has commenced, starting in early September. The overall crop size is expected to be above average. However, we have witnessed the crop quality this season being significantly inferior – predominantly due to the stink bug infestation. The Türkiye crop number is being revised from 800K down to 725K-750K. The vital question would be on how much of this is of good quality. Other crops like Italy, Oregon, Georgia, Azerbaijan look normal.
• The TMO has announced a price of 130 TL/kg – around $ 7,75/kg kernel. This is much higher than the average 6 $/kg for the last 5 years. Ferrero too has announced 130 TL/kg for inshells. However, we have not seen either of them receiving much stocks; especially due to the stricter quality norms for acceptance.
• Ferrero has now announced TL 235/kg for qualities C&D, and TL 245/kg for qualities A&B. The open market is trading slightly below these levels and has been stable for the last 2-3 weeks. ​

Demand side:

• Overall demand looks steady. We have witnessed many tender volumes drop against last season. Turkey exports for the last season crossed 300K, indicating overall demand is steady, but more spread out.
• The trend of buying only for short/medium term continues, as demand concerns continue for longer period. We do expect spot buying to continue for rest of September and October.

Overall:

• We foresee a stable market for the next few weeks – prompt demand, and that Ferrero is buying will support the market. Downside seems limited.
• However, upside seems limited as well – the overall supply is good, and long-term demand stays a concern.

Peanuts

The 2024 crop harvest is well underway in Florida, and just beginning across the rest of the U.S. growing region. USDA Federal State Inspection Service reports 28,400 farmer stock tons (FST) graded as of September 23rd, with 24,759 of those tons being from Florida. Overall, the crop condition is reported as being in good to fair condition. A portion of the growing region is experiencing moderate to severe drought, so we could see some aflatoxin and yield issues, maybe similar to last year’s crop, but it is too early to understand to what extent. We are currently monitoring Tropical Storm Helene, which is expected to make landfall later this week in Northern Florida as a major hurricane and travel north over Georgia, bringing several inches of rain to much of the SE U.S., as well as potentially damaging winds to North FL and South to Central GA. All eyes are on this storm.

Demand for U.S. peanuts continues to hold stable in the 3M ton range. USDA’s most recent report increased estimate for harvested acres from 1.745M acres to 1.7495M acres. However, they reduced yield to 3836 lbs./acre, bringing potential production down from 3.4M to 3.355M FST. They also further reduced the carry-in of 2023 crop from 846k FST to 740.8k FST and the 2024 carry-out from 912k FST to 862k FST. While it is too soon to know whether the 2024 crop carry-out will be that low, we are certainly feeling the effects of the short 2023 crop carry-in as we transition to 2024 crop.

Activity in the U.S. kernel market has been somewhat active but mostly for nearby product, which is difficult to find. Prices for 2023 crop kernels have been in the mid to upper $0.60’s, but we are beginning to see prices trend down toward 2024 crop kernel prices, which are holding firm for now in the mid to upper $0.50’s.

Macadamias

The macadamia market has been calm last month, as buyers in Europe and the U.S. have secured enough stock to meet their short-term needs. With kernel demand being strong this year and a crop shortfall in key production areas (particularly South Africa & Australia), a potential shortage may emerge in late 2024-early 2025 given the next big crop season is months away. The carry forward inventory for next year is poised to be low as a result.

After a year of strong growth, kernel prices have stabilized in last few weeks, likely because most processors are completing their commitments and kernels are available in most destination markets.

• South Africa: South Africa has faced a slight decline in macadamia production this year, with the forecast at 76,753 MT, a 3.7% decrease from last year & 12% reduction from projected levels in the start of season. This reduction is primarily due to heavy rains earlier in the season and subsequent cooler summer conditions, which have negatively affected nut size and yield quality in several regions.
• Australia: Australia is completing their harvest with an expected 5.0% increase in production form last year, forecasted at 50,830 MT which is still lower than initial projections. Despite challenges such as prolonged heat and wet weather in key growing regions, conditions improved towards the end of the season which has supported most growers.​
• Kenya: Kenya’s production also was lower than projection in the big crop @ 44,000 MT, a 3.5% increase from last year. Since the lift of export ban on NIS late last year, China has been actively buying NIS in the region which has led to NIS prices soaring leading to processors reducing their capacity. Kernel exports have been lower this year as a result. Recent news suggest that government has extended the lift on NIS ban for another 6 months which is likely to impact kernel exports from Kenya in the next big crop season if prices don’t support.

Pistachios

Overall crop receipts for 2023-2024 is 1.49 billion lbs. After correcting for Inshell Shrinkage and other adjustments of 291 million lbs, adjusted inventory was 1.36 billion lbs. Total shipments [domestic + exports] reached 1.18 billion lbs, resulting in end of season carry out of 184 million lbs.

Flat trend of shipments, continued in August, with domestic shipments of 18.5 million lbs, and exports of 48.7 million lbs. While domestic shipments for the full year is 250 million lbs, a mere +0.4% increase YoY; export shipments, chalked up to 931 million lbs, at +42.7% growth YoY basis. China remained largest international market with 307 million lbs, shipments or +33% of total exports.

Early reports from ongoing harvest, indicates lighter crop, with good size and quality. Accordingly, new crop estimates are further moderated to 1.0-1.1 billion lbs from previous levels. These changes point towards, tightening Pistachios supply which will influence price and availability.