Small Caps | 10:05 AM
Outlook for Californian almond supply
Multiple positive industry tailwinds should underwrite higher almond prices in FY26. UBS details how supply is expected to tighten due to lower Californian crop production in 2024 of 2.7bn pounds against industry predictions at 2.8bn pounds.
The decline in the crop of -100m pounds more than forecast is likely to result in a fall in the "carry-out" or the amount of unsold almonds carried into the next crop year. Lower production and ongoing robust demand result in tightening supply and a decline in the carry-out to below 500m pounds.
Supply challenges from higher crop pull-outs (older trees) than new plantings have been created by California's Sustainable Groundwater Management Act to reduce water overuse.
Growers have also been impacted by liquidity issues, which has resulted in reduced input purchases like fertiliser and water, while demand from China/India remains solid.
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