Monday, March 24, 2014


Market seems difficult and confused.  If you're not interested in the reading material, just scroll down to the bottom for a summary

1- Vietnam crop:
Because of the cold weather during the flowering, nut count is smaller and outturn is low.  But due to many new processors and likely very little stocks carry over from last crop so demand of seed is huge, there is too much competition to buy seeds. Seed price indeed have not come down, and even go up a bit.

Kernel seems to move in different directions, there are many offers of kernels from Vietnam, so kernels price is not going up. Situation became very difficult time for the processor because there is no parity.

Vietnam crop is now less important to processors like they used to be. We import more and more. Last few days, our staffs went to Cambodia from what they see, they feel and Cambodia crop is getting bigger and bigger. I do not really know how big Cambodia crop is but they export more and more to Vietnam.

Price of seed today in Vietnam is around 22,300-23,000 VN$ with low outturn.

2- West African crop:
IVC crop: IVC government is still controlling to price paid to farmers, and they do not allow export at low price. I heard they had cancelled the export license of some exporters because they were selling low price.  Because of this, IVC raw seed price remain stable and even up a bit.  At one time, IVC 48 lbs dropped to 950 USD/mt cnf Vietnam but are now up 10-20 USD per tons (traded 970-980 usd/mt cnf Vietnam for 48 lbs).  IVC raw cashew nut is the key important factor, as crop is so big (around 500,000 MT), so IVC price will affect price of Nigeria, Benin, Ghana, Burkina Faso, Guinea Bissau…..

One of the reason IVC price is stable is because of Vietnam. We are hearing that Indian crop is good, so Indian processors find price of IVC as too high, and they’re not buying much.  But Vietnamese processors are buying a lot from IVC.  Some Vietnamese processors like to gamble.  They will accept high price, but when the cashews arrive and if the market is down, they will try to find discrepancies in L/C and try to reject the cashews.  It happens all the time when market is down.(We don’t deal with these guys though)

It is reported that this year quality from IVC is good and big nut count (last year nut count of IVC was also big that's why supply of WW240 was good).  I do not hear any bad news about crop in other countries like Nigeria, Burkina Faso, and Ghana. Guinea Bissau crop will only start later.

If everywhere crop is good, I do not know how IVC government can hold the price of seeds.

3- Processing in Vietnam:
Still good… Very good.  That's why there are a lot of offers of kernels.

4- Vietnam domestic market of kernels. 
Market seems to be stable, not coming down like last few weeks. I think because price is reasonable so demand is good, that's why price stable.

5- China market:
After the lunar New Year, demand seems to be good.  But they are beginning to follow Western buyers, which is to pay less price for WW320 because of good supply from Vietnam. They still buy a lot of LBW and DW because lower price. China does not buy much WW240.  Normally China will reduce buying in April, May when the weather getting warmer.  Chinese buyers are complaining that the currency(RMB) is dropping fast against USD, so price become more expensive. This can affect their purchase from Vietnam.
I will be going to China in Mid-April to visit some of our buyers, then I will know more about China market and demand.

6- Western market:
Because of so many offers from Vietnam, buyers seem not in a hurry to buy and only buy if they feel price is cheap. It looks like offer will be more in April, May, June, July.  If packers suppose selling at same level as today, can Western buyers absorb the increase in quantity from Vietnam??? Or they need a lower price to push demand???

So in summary, this is a difficult time for processors, paying high price for seeds and selling kernels at low price. April, May, June might be more difficult for sellers because they need to sell bigger quantity then same period of last year. If price fall, they may face big problems.

In the past, most companies lost money mainly because they purchased raw seed at high price, like:

Fatimex: bankruptcy, mainly because they purchased seed at high price and bad management
Lafooco: down mainly because they purchased and a bit high processing cost
Nitagrex: down because they purchased seed at high price although they enjoy low processing cost
Pygemaco (Pycasco): down because they purchased seed at high price although they enjoy low processing cost. Their management wasn’t very bad.
Nam Long: same problem, purchased seeds at high price.

So for most packers in Vietnam, the main problem is purchasing seed at high price. Other problem is management and high banking interest (but if high banking interest will affect all packers, not just few)

It does not mean that when you purchase seed at high price, the international buyers need to pay you high price for kernels. This is wrong thinking.

So we will see if:

a) buyers will pay higher price for kennels to have parity for processors
b) Raw seed price has to come down for parity
c) processors is making wrong decision to pay high price of seeds and will suffer.

In the interest of saving time, I'll just sum it up this way
Packers/Sellers are asking for higher pricing, because of high prices of RCN.  Buyers are very hesitant to buy at current level, because.... heck, it's a down market!!

It's a dangerous game "chicken" that they're playing... seeing who'll budge first.  The best advice anyone can give right now is "Keep your head down and your eyes/ears open".  When the market bottoms out/hits the floor, you can give me a call(or if you need spot shipments right now)

- Thomas Kim

Wednesday, March 12, 2014

February Walnut Shipment Report

Walnut Shipment Report

YEAR TO DATE SHIPMENTS- Shipments through February 28th of 2014 were -0 .5% overall compared to last year.  Total Shipments are 333,020 In-shell equivalent tons.

EXPORT SHIPMENTS- Shipments are up compared to last year. Current year to date export shipments are 230,850 In-shell tons; compared to last year at  229,845 In-shell tons,  representing -0.5%.

DOMESTIC SHIPMENTS- Shipments are down compared to last year at the same time. Current year to date domestic shipments are 102,163 tons; compared to last year at 104,624 In-shell tons, representing - 2.35%.
     U.S. – The domestic market was slightly down for the month of February on kernels and In-shell. Canada was slightly up on their kernel shipments.
     Europe- Once again had strong shipments in both In-shell and shelled categories. Italy and Spain both had terrific shipment numbers. .
     Middle East/Africa – up in both categories for kernels and In-shell and up for the month.
     Asia/Pacific   - Was down on In-shell and up on Kernels. China shipped more kernels than they did last February. Year to date volume for China/Hong Kong is down.

CROP RECEIPTS- Receipts are 488,844 In-shell tons as of February 28th, 2014, which should represent the entire crop.  The CASS Crop Estimate is at 495,000 tons. 

SOLD POSITION- Most industry experts believe the crop is 90-95% sold  or committed.

Demand has been steady from many markets around the world.  China is not as active as last month as they have shifted focus to Chilean walnuts.  

Prices look to remain very firm until new crop due to a lack of inventory in California. Most of the remaining inventory is pallet amounts with limited full container/truckloads of single items remaining. It appears packers are extremely comfortable with their sold position. We do not expect to see any changes in pricing for the remaining inventory of this crop. If prices do move we believe they may increase slightly as we approach the summer months.

WATER-  California has had two excellent storms over the past couple weeks. It has provided much needed water; however, we are still need of much more. It has given temporary relief to farmers and allowed them to shut of their pumps and not irrigate. California is still in a drought situation, one thing to keep in mind is the rain in the recent storms have been warm and provided very little snow pack. Snow pack is essential for summer water needs.

We will continue to keep you updated on new crop as the season progresses.  

Yes.. we've had two storms.... "but!..."  There's always a "but"... isn't there?

We'll try to keep everyone updated.

-Thomas Kim

Tuesday, March 11, 2014

February Almond Position Report

The Almond Board of California has announced the February Almond Position Report with shipments of  +149.3 million pounds compared to last year +160.0   million pounds for a decrease of -6.7%.

February Shipments:
-          Domestic shipments were +26.1%    +54.47 million lbs
-          Export shipments were -18.8%    +94.87 million lbs
-          Overall -6.7%     +149.3 million lbs

YEAR TO DATE SHIPMENTS:  +1.219 billion pounds compared to 1.176  billion pounds last year for a +3.66% year to date.

CROP RECEIPTS: The crop receipts are now at +1.99 billion pounds.

BLOOM: The bloom has basically finished.  Nonpareil had good weather, however, it did endure a long bloom and the initial report are the NP bloom was spotty.  Early pollinators had excellent weather overall.  The late pollinators did endure some rain at the tail end of the bloom which will be a concern for the Butte/Padre, as they were at 50% bloom when the rains occurred in some areas of the valley.

RAIN:  California has received a few nice periods of rain showers during the past 15 days to bring our annual rain fall up to approximately 45% of its normal levels for year to date in the Sacramento area.  We are at 36% or our normal full season rainfall totals.  We are still in a drought situation which will become a bigger issue in May/June/July when growers are required to make heavy irrigations.

MARCH SHIPMENTS: We expect the March shipments to be similar to slightly down compared to last year.

SPANISH BLOOM:  Spain has had an outstanding bloom condition and the trees are set to make a potential record crop of 60-70,000 tons.  As you will recall, this past year Spain had one of its worst crops in recent years only achieving 27,000 tons.  Thus the trees in Spain were well rested and are ready to produce this year.

PRICES: Almond prices have decrease approximately 10 cents per lbs on selected items during the past 4 weeks, as California started to receive a few rain showers to assist with its drought situation.

This is a good news for the buyers... at least until another "crisis" occurs to drive the market pricing through the roof!

Monday, March 03, 2014

Almond Gold Rush

Source : BBC News
Author : Peter Bowes
February 11, 2014

It has been likened to a modern-day gold rush. The growth in the popularity of nuts as a healthy snack has seen a boom in business for California's almond farmers. Eighty-two per cent of the world's almonds come from America's Golden State, where it is the leading agricultural export.

"Nut crops and almonds particularly have risen in value as the world has realized the nutritional value of eating almonds and how good they are for our bodies," explains David Phippen, a life-long almond grower in the prime agricultural area of central California.

Phippen's solar-powered farm is a partnership between five families. It is one of the first in the world to use robots, designed using NASA technology, to sort good almonds from bad.

It is a highly mechanized process with sophisticated irrigation systems in the orchards but, above all, almond production is dependent on the climate.

The region - which is about a 90-minute drive from Silicon Valley - is one of the few places in the world where almond trees will grow.

It has the perfect combination of a cold - but not too cold - winter, which allows the trees to lie dormant, followed by a mild spring that encourages them to wake up and bloom.

Crucially, the trees need about 500-700 hours of dormancy followed by a frost-free period when they burst into life - usually around Valentine's Day.

Farmers like Phippen have responded to the global surge in business - especially from the UK and emerging markets like China and India - by expanding their orchards.

"The value of each kernel has gone up dramatically and growers are looking for the best return on their investment so they're still planting almond trees at an alarming rate," he says. "If you decided to plant an orchard right now, you would wait two years for available root stock to actually plant."

"In the early- to mid-90s, nuts in general and almonds in particular were felt to be unhealthy because they had so much fat," says John Talbot, vice-president of global market development for the Almond Board of California.

But he says research has shown that the fat content of almonds is a positive attribute.

"It's the good fat, it's not the bad fat," he says, adding that a greater understanding of the positive role of monounsaturated fats has changed people's perceptions.

Good fats, such as monounsaturated fat, have been shown to have a beneficial effect on the body, decreasing the risk of heart disease and improving blood cholesterol. Harmful fats include saturated fats which come mainly from animal sources of food. They can be found in processed foods and have been linked to raised cholesterol levels and cardiovascular disease.

In recent years the almond industry has seized on the health-promoting qualities of the nut. Marketing campaigns have resulted in a steady but significant growth in business.

A print and online advertising campaign in the UK in 2012 positioned almonds as the "on-the-go essential snack". A Young at Heart campaign in China focused on the idea of "perpetually feeling good", while mothers in India were fed the message that almonds would help their children succeed in whatever they do. In the US, with slogans like The Crunch That Keeps You In The Game, the Almond Board of California has promoted the "crunch power" of the nut to physically active consumers.

Independent research appears to support the broad claim that almonds are a healthy food choice.

Researcher and registered dietitian Dr Michelle Wien has been studying the health benefits of almonds for over a decade. In one study, at the City of Hope National Medical Centre in Duarte, California, Wien discovered that when the nuts were incorporated into a weight-loss programme, dieters lost a greater percentage of their body-weight than those who did not eat almonds.

"They have a good amount of fibre, they are the highest protein-containing tree nut and my patients reported that they enjoyed the crunch and the chewing of the mastication process when they were consuming the almonds," explains Wien.

She says almonds have the effect of making people satisfied and less hungry for longer. It is a finding that has been observed by other researchers.

In another study, Dr Wien set out to evaluate the effects of almonds in people with pre-diabetes. She found that after 16 weeks, individuals who were consuming approximately 43-57g (1.5-2oz) of the nuts per day, had improvements in their bad cholesterol levels.

Wien, who works with diabetes patients, says almonds have qualities that make them a valuable ingredient in a snack.

"Since almonds are high in fat, they will reduce what's called the glycemic index of the snack," she explains.

"If you pair something with a low glycemic index, which would be the almond, with the higher glycemic index food, which would be the fresh fruit or a cracker, then you're going to minimise the rise in blood sugar after the snack."

Buying almonds in bulk makes sense financially. But consumers should be aware that gorging on the nuts is not to be advised. A single 28g (1oz) serving - about 23 whole almonds kernels - contains 160 calories and while each nut carries a powerful nutritional punch, they should be eaten sparingly.

Research suggests that each kernel should be savoured, individually, to realize its nutritional benefits.

One study concluded that an almond should be chewed 25-40 times to optimise its satiability factor. Prolonged chewing of the nut aids the release of nutrients into the body.

The cost of almonds has almost doubled over the past five years. In fact, the crop is so valuable, it has attracted a new breed of thieves. Nut-nappers, as they have become known, have been making off with produce by the lorryload, leaving a hefty dent in the profits of some growers.

A truck piled high with nuts can be worth well over £100,000 ($160,000) and it is a tempting target for the opportunistic thieves. There has been a spate of thefts in recent months, although it is a problem the industry has faced for a number of years.

"Two truckloads of almonds that were processed and ready for shipment were actually taken from our facility by people not authorised to take them," says Phippen.

"When something is worth a lot, there are unscrupulous folks that would like to have it for nothing."

The industry has hit back through increased vigilance among workers on the farms. Over the past year, new checks have been put in place to ensure that freshly processed loads are not stolen from under their eyes.

"We thumbprint and take pictures of the driver, we take pictures of his licence, take pictures of the truck, we document in so many more ways than we used to, so the trust factor is being challenged a little bit and to me that's a little bit sad," says Phippen.

The close-knit industry, with mostly family-run farms, has also developed an online community where word spreads rapidly when nut-nappers are in the neighbourhood.

The local authorities have been successful in tracking down and prosecuting many of the thieves. In a recent case a man was jailed for a year after admitting his role in the attempted theft of almost 20 tonnes of almonds.

The Almond Board of California says the theft of nuts does not pose a major industry-wide problem. A more ominous threat is the growing water shortage in California. The state is suffering its worst drought since records began, over a century ago. There has been very little rain for the past three years and reservoir levels are dropping.

"They're at the lowest level we've seen for this time of the year probably in my lifetime," says Phippen.

"Could we survive a fourth year of drought is the question and the answer is, 'I don't know,' I haven't tried that yet and we just don't know what Mother Nature is going to provide between now and then."

As for the price, there is no sign that nuts will become a cheap snacking option, any time soon. Demand is growing but supplies are limited and the drought could fuel a further short-term increase.

"It's really a matter of supply and demand," says Talbot.

"Compare (nuts) to other foods and they are more expensive than potato chips and more expensive than pretzels. People willing to pay a little bit more because there is a greater nutritional value - it is the perceived value of the product."