Almond Situation and Outlook
The United States is the world's largest producer and exporter of almonds, accounting for more than 70 percent of selected country output and more than 80 percent of exports.
The California Agricultural Statistics Service forecasts its 1997/98 almond crop at 308,400 tons. The forecast is down 4 percent from May's subjective forecast and up 33 percent from last year's crop. This forecast is based on 169,972 bearing hectares (420,000 acres). California accounts for nearly all of the U.S. almond production.
The Nonpareil variety is forecast at 151,000 tons, up 33 percent from last season. This almond variety represents approximately 49 percent of total California almond production.
The average nut set per tree is 7,567, up 38 percent from 1996. The Nonpareil average nut set of 7,714 constitutes a 55-percent increase from last year's set. The average kernel weight for all varieties sampled was 1.59 grams, down 14 percent from last year. A total of 97.9 percent of the nuts sized were sound.
U.S. almond exports in 1997/98 are forecast at 195,000 tons, 12 percent above the previous year's shipments based on likely lower prices and expected continued strong international demand.
There are three types of U.S. almonds--shelled, prepared or preserved, and in-shell--exported. U.S. shelled almonds often enter markets where food processors want ingredients for the manufacture of products to fulfill demand among consumers. Quality and, to a lesser extent, price play a major role in these sales. For example, one Spanish company believes that, even in an environment of increasing prices, it could only replace 10 percent of its almond purchases with other tree nuts. Value-added prepared or preserved almonds must compete in other countries against numerous snack foods and desserts, including bakery goods, confections, and salted snacks. Meanwhile, low labor costs for shelling and cultural preferences influence purchases of in-shell almonds in countries like India.
In 1996/97, shelled almonds, including prepared and preserved, accounted for 94 percent of total U.S. almond exports. Exports of shelled almonds jumped 13 percent in 1996/97 due to robust foreign demand. Significant U.S. customers for shelled almonds were Western Europe (primarily the European Union), Japan, Canada, South Korea, and Hong Kong.
Although in-shell almond exports accounted for 6 percent of U.S. almond exports in 1996/97, in-shell exports surged 59 percent by quantity due to reduced foreign in-shell stocks. The more optional and discretionary nature of purchases of in-shell almonds among retail consumers permitted exports of in-shell almonds to rise even more than exports of shelled almonds. Major U.S. customers for in-shell almonds in 1996/97 included India with 87 percent of the total, followed by the EU, Hong Kong, Israel, and Brazil.
The United States continues to negotiate with India to maintain its access to the Indian market for in-shell almonds. This effort has permitted increasing U.S. exports of in-shell almonds, which benefits both U.S. almond producers and Indian importers.
Almond production in 1997/98 is forecast at 75,000 tons, up 25 percent over the previous year. Improved rains and the end of a prolonged drought are expected to contribute to the higher almond output of likely above average quality.
In 1997/98, almond exports are forecast at 36,500 tons, up 14 percent due to expected continued strong demand among food manufacturers in the European Union (EU) and likely lower almond prices. Most of Spain's almond exports go to other EU countries. For example, in 1996/97, EU purchases accounted for 94 percent of total Spanish almond exports. Spain's almond exporters receive an EU export subsidy of 77.9 ECUs ($72.13 U.S.) per ton.
Spain also imports almonds. The United States is the principal supplier. In 1996/97, U.S. almonds constituted 81 percent of total Spanish imports, while other EU countries supplied 18 percent of imports.
Almond imports from third countries are subject to a duty of up to 7 percent. Meanwhile, a tariff rate of 2 percent is applicable within the limits of a global EU annual tariff quota of 90,000 tons. Imports from other EU countries are duty free. As with domestically produced food products, Spain levies a 7-percent value added tax on imported almonds.
In 1997/98, almond consumption in Spain is forecast to increase slightly as industrial demand for almonds continues to be strong. The Spanish nougat industry uses most of the almonds. Almonds compete primarily with hazelnuts and peanuts in Spain's industrial food processing market.
Almond production in 1997/98 is forecast at 15,000 tons, unchanged from the previous year's output. The quality of Turkish almonds is expected to be average. International trade does not have much of an impact on the Turkish almond industry, because most of the almonds produced are consumed domestically.
Turkish almond consumption is growing slowly, largely due to the abundance of hazelnuts, a close substitute for almonds in Turkey. Most of the increase in aggregate consumption results from rising population. Turkish consumers prefer almonds as a snack food.
Almond production for 1997/98 is forecast at 13,000 tons, more than double the previous year's weather-reduced level. Almond exports in 1997/98 are expected to increase to 1,500 tons due to the larger harvest. In 1995/96, other EU countries accounted for 89 percent of total Italian almond exports.
Almond imports in 1997/98 are forecast to decline by 43 percent to 8,500 tons due to the larger crop. The United States supplies nearly half Italy's imports.
As in Spain and Greece, almond imports into Italy from third countries outside the European Union (EU) are subject to a duty of up to 7 percent. Meanwhile, a tariff rate of 2 percent is applicable within the limits of a global EU annual tariff quota of 90,000 tons. Imports from other EU countries are duty free.
In 1997/98, Italian consumption of almonds is forecast to increase about 4 percent. Most almonds enter the food manufacturing sector as an ingredient. The size of the Italian snack food market has remained unchanged.
Almond production in 1997/98 is forecast at 14,000 tons, 12 percent above the 1996/97 crop. The quality of the crop is expected to range from very good to excellent, owing to mild weather.
Greek farmers have introduced new late-blooming varieties of almonds, particularly Texas-Mission and Feragnes. Later almond blooms mean less damage from frost. The Feragnes variety has replaced many traditional varieties and has even entirely substituted for the Texas-Mission variety in certain regions.
Domestic consumption of almonds fluctuates between 13,000 and 15,000 tons. The confectionary sector and chocolate industry prefer almonds. Greece is one of the highest tree nut consuming countries in the world with over 5 kilograms per capita annual nut consumption. Twenty-three percent of the total amount, or 1.15 kilograms, consumed represents almonds. Heavy consumption of tree nuts starts in October, peaking in December and January, and declining in April and May.
Almond production in 1997/98 is expected to increase 18 percent to 6,000 tons due to abundant rainfall. Despite larger output, lack of technical knowledge and poor management will likely limit the size of future crops. Harvested area in 1997/98, estimated at 90,000 hectares, has remained unchanged for the past several years. Less than 10 percent of the production area uses irrigation, yet farms with irrigation account for over half of all Morocco's almond production.
The Government of Morocco (GOM) has no clear policy to expand almond production. Currently, the only incentive is a subsidy for almond seedlings. The GOM supports four-fifths of the value of seedlings while farmers are requested to pay the remaining one fifth. The GOM is expected to subsidize the purchase of 300,000 almond plants in 1997 which would cover an area of about 3,000 hectares. Poor management and limited inputs available to the growers will likely dampen the impact of such a program.
Foreign trade has little influence on Morocco's almond industry. Both exports and imports of almonds remain insignificant.
Moroccan almond imports could increase markedly if the duties were reduced from the current 80-percent ad valorem rate. Given competitive prices, Moroccan importers would likely purchase U.S. almonds due to their high quality. In the past, importers have mixed U.S. almonds with Moroccan almonds to improve the taste of various pastries and cookies.
(For further information on supply, distribution, and trade contact William Janis at 202-720-0897. For information on U.S. marketing opportunities, contact Steve Shnitzler at 202-720-8495.)