WALNUT MARKET/CROP REPORT

R.L. “Pete” Turner May 25, 2009

WALNUT MARKET/CROP REPORT

CROP:

In my February walnut market/crop report I mention that the official California 2008 crop received by the Handlers was established at a record 434,000 tons; 79,000 tons more than the previous largest crop (2005). I believe I also stated that due to world financial mess and the by far largest crop in history, we would have plenty of walnuts available for a long time. Well….I’m 0 for 3!! I not only missed with my 2008 crop estimated by 80,000 tons, the world financial situation was short lived (at least for walnuts), and now, it looks like we will basically be out of walnuts by the new 2009 crop harvest.

It’s amazing what five months of record shipments will do for an industry. Especially, when we have a shipping month like the one we had in April. Most of this record shipping activity can be attributed to low pricing and a short China crop.

The California Walnut Board announced the April shipments at 40,585 inshell equivalent tons; 20,145 tons more than last year. Inshell shipments were 19.7 million pounds, compared to 1.7 million pounds last April. Shelled shipments were 26.7 million pounds, 9.8 million pounds more than last year. Total inshell equivalent year to date shipments are 290,288 tons: compared to 271,591 last year (up 7%).

Everyone in the industry was surprised by the April shipments which was the largest shipping month since October 2008 and the second largest shipping month since November 2007. And these numbers do not include the first flight (10.5 million pounds shelled walnuts) for the USDA School Lunch Program which is scheduled to start shipping in July and ending in October. Thus, we can expect the heavy monthly shipments to continue right up to new crop.

It is still too early to predict the 2009 crop, but industry leaders believe it will be significantly less than the 2008 crop. The Handlers will have their “subjective” estimate in late July, but right now, many believe it will be 350,000 to 375,000 tons.

Market:

The past several months record shipments have greatly reduced inventories, especially Chandlers and Hartley’s; which have basically sold off. The prices for Chandler LHP were $1.85 in early April with recent trades taken place at $2.25. Now that the Chandlers are gone, regular Light material is also fading fast. Regular LHP have jumped from $1.65 last month to $2.00 this week and Combo material is following the same path.

Jumbo Hartley’s that were selling at $0.85 in late March and are now demanding somewhere around $1.25. Again, that is if you can get them. This being said, I am sure there may be some packers offering lower pricing, however, I am just not aware of them.

The out look on the forward market is a lot different than a few months ago. It appears that the heavy demand for walnuts will continue and will most likely see continued strengthening of the market. However, I do not believe we will see prices reach the levels we experienced last year.

The walnut health message continues to expand as new studies show even more health benefits from eating walnuts. The most recent is from a study showing that walnuts have reduced the occurrence of breast cancer in mice. More on this later.

Please let me know if you have any questions or comment.

Regards,

Pete

MCX launches futures trading in Almond for the 1st time

Published on Tue, May 12, 2009 at 20:34 , Updated at Tue, May 12, 2009 at 20:36 Source : press release

MCX (Multi Commodity Exchange of India Ltd.), India’s leading commodity futures exchange has launched trading in “Almond”. This is the first time in the world when Almond is available for trading on futures trading platform. MCX received the approval from the regulator – FMC and launched “Almond (Non Pariel)” September contract today. The first trade was executed at Rs. 318 per kg and made a high of Rs 330.75. The participation was seen from more than 100 participants across India. At the end of first trading session, the contract witnessed total volume of 5,13,500 kgs valuing at Rs. 16.89 crores with open interest as 64,000 kgs.
The trading unit for the contract is 500 kgs with price quote as ex- Delhi (exclusive of VAT, other taxes and levies). It will be a compulsory delivery contract with deliveries at the exchange designated cold storages in Delhi and Navi Mumbai. The delivery unit will be 1 MT. The initial margin required to trade will be 5% of the contract value.
The MCX Almonds futures will provide a viable platform to hedge against price and supply risk faced by entire gamut of almond value chain participants like, importers, agents, brokers, traders, wholesalers, retailers, processors, confectioners and other consumers. The participants would be able to manage their sales and purchase of inventory, six to nine weeks in advance thus eliminating the uncertainties related to price and delivery. The Almond future contract will also help in establishment of a transparent national pricing mechanism, integration of spot markets and reduction in price volatility thus maintaining the balance in the demand - supply situation throughout the year.
Almond is one of the largest traded dry fruits in India and world. India is world’s largest importer of in-shell almonds and largest consumer of fresh almonds in kernel form. In India, Non Pariel - Almond is the largest traded variety, it’s preferred for its bigger size, competitive price and taste. Delhi, Mumbai, Amritsar, Ahmedabad are leading consumption centers. September to February i.e .during festival season, Non Pariel is the largest traded and preferred variety, because of its bigger size, competitive price and taste.

US: Pistachio growers could gain key self-regulation

US: Pistachio growers could gain key self-regulation California's pistachio producers could potentially boost research and promotion efforts and do more to combat disease, under Agriculture Department recommendations made public Tuesday.The proposed changes would expand how the San Joaquin Valley-based pistachio industry regulates itself. Growers from Arizona and New Mexico would be folded into an existing marketing order, a grower-run organization that would gain new powers under the proposal."We're going to reduce the risk of a food safety crisis," said Bob Klein, manager of the Fresno-based Administrative Committee for Pistachios. The Agriculture Department proposals largely track a wish list posted by leaders of California's $500 million-a-year pistachio industry. A two-day hearing conducted in Fresno last July laid the foundation for the new rules.The proposed changes now face a month-long public comment period and subsequent industry vote. The changes would revise rules for the Administrative Committee for Pistachios. The organization is one of many marketing orders governing specific crops throughout California.Agricultural marketing orders, and the related promotion orders, enable growers and handlers to assess fees, fund advertising and research and, in some cases, set crop standards.The federal pistachio marketing order began in 2004, though it currently has limited authority. The revisions would authorize a research program, potentially focusing on nutrition and other areas. Research projects would need separate approval."It gives us additional flexibility, if some huge problem erupts," Klein said.The pistachio marketing order also would be authorized to impose minimum quality standards and to combat aflatoxin, toxic fungus whose presence throws a scare into farmers and consumers alike. The new rules give the industry more flexibility to set tougher standards.Such contamination can wreak havoc on producers. Aflatoxin found in Iranian pistachios in the 1990s helped prompt European buyers to shift more to American pistachios. But earlier this year, traces of salmonella found in a Terra Bella pistachio processing plant sparked a nationwide recall of the nut.Agriculture Department officials said that expanding the marketing order to include New Mexico and Arizona would protect California producers as well by ensuring uniformly high safety standards."An aflatoxin incident in any one commercial producing area could adversely affect other commercial producing areas," the Agriculture Department stated.The Agriculture Department added that the revised rules would allow the pistachio marketing board to impose specific new quality standards "if circumstances warrant." The industry currently assesses fees and maintains a separate California Pistachio Research Board under state law.Though pistachios are grown in 32 California counties, the southern San Joaquin Valley dominates the field. Half of all the state's pistachios are grown in Kern County, while Madera, Kings, Tulare and Fresno counties account for most of the rest.All told, pistachio orchards span some 177,000 acres in California. Arizona is second in the nation, with 2,281 acres while New Mexico has only about 400 acres. Klein said he didn't expect any immediate assessment increases.Source: fresnobee.com

India: Cashew export dips 22% in March

MarchThe cashew kernel exports in March declined by 22 per cent to 8,783 tonnes due to slackening demand from the US amid the global slowdown. Exports during March 2008 stood at 11,201 tonnes, according to Cashew Export Promotion Council (CEPC) data.Cashew exports are affected mainly on account of global economic crisis, as it does not fall under essential commodity, CEPC Secretary, Mr K Sasi Varma said.The demand has come down considerably from the US, which is battling recession since December 2007, he added.India exports about 45 per cent of the nut to the US. In terms of value also exports dipped by about 10 per cent to Rs 230.46 crore from Rs 255.72 crore in the same month last year.In terms of volume, exports for 2008-09 dipped by 5.43 per cent to 1.08 lakh tonnes compared with 1.14 lakh tonnes in the previous fiscal. In value terms it was up by 29 per cent at Rs 2,950.24 crore against Rs 2,288.90 crore a year ago.To promote the interests of cashew producers and boost consumption of the nut across the world, CEPC is sending a five-member delegation to the US to discuss the modalities for setting up a Global Cashew Alliance, Mr Varma said.The delegation will also attend the Annual Convention of Association of Food Industries (AFI) at Naples, Florida, from April 30 to May 2.