It’s been an eventful week with some significant changes.
Most important thing to note right from the onset is the high dollar which is
becoming a factor, not huge yet but if the dollar continues to further strengthen
against the Euro, Canadian $ and other currencies it could start to really
effect oversees trade. In terms of where the dollar can go, it all depend on if
the fed will raise interest rates (which they don’t seem to want to do) but
till then we are seeing a slight slowdown in exports to Europe and other parts
of the world.
Almonds
In light of that, I would like to address the Almond market
first. The December shipment is most telling. Had the export numbers been down
by -20% plus then it would have been something, but the drop of -11% means that
prices will stay at these high level for quite a while with a possible further
upward trend. We are already paying the price for next year drought and based
on little to no rainfall so far in Jan and the wet month of December being
negated by the warm weather which meant no snow packs were formed. In terms of
the Dec shipment report most glaring is the drop in exports to Europe (again
due to a weak Euro) but the slack has been picked up by massive buying by India
and China (ultimately Europe is going to need to cover its contracts and will
move quicker now seeing the $ vs EURO movement).
This has not effected exports to China who’s currency
shadows the US dollar and India which has really stabilized the rupee. While
India massive consumption remains a mystery, in terms for the packers back home
they know they need to stem the exports because they will little to no
carryover at this rate. The one way to do this is by raising prices. This is
not a traders market, rather it’s an opportunist dream, pick up a deal here and
there and sell it on. The drought seems to be stretching into its 5th
years and anything less than 2 Billion plus bloom report will not bode well for
ongoing pricing. While these high prices is having an effect on end consumer
purchasing, it is being offset against by exports and the need to slow down
sales for next year’s carry over.
Cashews
Pricing has edged up over the last couple of days, even
though the market continues to be very quiet. India has slowed it production,
this is due to a government fixed wage increase for workers, this has caused
many factories to close down and other factories are simply not producing
because of the high price of RCN out of Africa.
In terms of Vietnam, new crop is due late February but
because of the Tet holidays that month, we will not see any shipments going out
in till March with most factories being closed. There is a classic disconnect
here between Packers not chasing this market and buyers not purchasing at these
levels. Ultimately demand will have to kick in and buying will happen. With the
beginning of new crop the price could go up, so short term it’s wise to
purchase now for 2nd QTR needs, long term it’s harder to see where
this market is going.
Cashew Pieces are still really the only grade moving with
these high prices due to lack of product vs demand.
Pecans
As we said last week, even with the massive crop, the demand
from China is immense we are seeing some huge volumes being shipped of JR
Mammoth Halves, on that product the growers are nearly out, so demand will
shift to large halves & pieces which will cause a further price increase.
This is simply a demand factor with a trickle down effecting other sizes. We
expect to see this commodity continue to go up in price.
Walnuts
While we have been saying for a while that pricing is
dropping, we are seeing a price disparity between Light and combo varieties,
the availability for LHP is lower than combo, so expect combo prices to
continue to drop while LHP with less of an aggressive price drop
Pine Nuts
The price on Pine Nuts continue
climbing on a daily basis, it’s hard to tell if this is due to the upcoming
Chinese New Year or if this just this just the real market price vs demand,
time will tell….
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