Rabobank Australia, Media Release, 14 February 2024

The Australian almond industry is on track to enjoy a “much better year in 2024”, Rabobank says in a newly-released report, with producers expecting to see margin improvement thanks to lower input prices, affordable water prices and high water availability, better climatic conditions and improving export prices.

In its global Five-year almond market outlook: Significant rebound underway, the agricultural banking specialist said this is welcome news to Australian growers, whose margins were squeezed in the past year due to reduced volumes, lower yields and increased production costs.

“The 2024 Australian almond harvest is now underway and there are prospects of a strong recovery on the horizon, after a challenging production year in 2023,” says report co-author, Rabobank associate analyst Pia Piggott.

The latest industry forecasts for the season are expecting Australia’s 2024 almond crop to reach 164,000 metric tons kernel weight equivalent (KWE), 59 per cent higher than the official intake for last year’s harvest, the report said.

Ms Piggot said the improved harvest prospect will help fuel Australia’s almond exports, which on average account for 80 per cent of Australian production.

Ms Piggott said, for Australian almond producers, 2023 had been another year of export growth. “Shipments in the marketing year through November 2023 were up eight per cent in volume, exceeding the crop size for 2023 and resulting in a significant reduction in carry-out volume,” she said.

There were mixed results across export markets during the year, Ms Piggott said. “The reduction of tariffs on Australian almonds to India has prompted significant growth in trade to the region, with volumes up 140 per cent year-on-year in 2023 (March to November 2023).

“Meanwhile, for Australia’s largest export destination, China – the sluggish economy has softened consumer demand and exports to the region are down 32 per cent year-on- year (March to November 2023). Fortunately, growth in other markets and in domestic sales has been positive, as Australia continues to diversify its export destinations,” she said.

Global outlook

Ms Piggott said the bank expects a strong rebound in international almond prices over the next 12 to 18 months, despite global production returning to higher levels.

“Production challenges in 2022 and 2023, coupled with an ongoing recovery in global demand, will drive ending stocks to their lowest level in four years. The lower carry-in expected in 2024 and its powerful, multi-year impact on the market are setting the stage for potential price stabilisation at stronger levels,” she said.

The bank anticipates while almond production will hit new records over the next five years, so will export shipments.

“Reductions of Indian tariffs are fuelling strong export growth for both the US and Australia,” the report said. “While health and plant-based food trends, rising incomes, lower inflation, and strong marketing efforts will continue to support almond demand, significant risks remain.”

Ms Piggott warned with geopolitical tensions on the rise, logistical concerns are always looming. “And there is ever-growing competition in the tree nut space,” she said.

California’s dominance

Accounting for roughly 80 per cent of global almond production and about 86 per cent of global almond exports, California plays a critical role in determining the state of almond markets, Ms Piggott said.

“US production more than tripled from 2005 to 2020, surpassing the three-billion-pound milestone in 2020 – sooner than industry expectations – thanks to favourable growing conditions that year.

“However, the three subsequent seasons have had production challenges, as yields were impacted by weather events. While yields in 2021 and 2022 were affected by an exceptional drought and deficit irrigation, 2023 brought floods and remarkably challenging conditions during pollination,” she said.

Rabobank says global almond production in 2023/24 is estimated to be down 15 per cent compared to the 2020/21 record.

“The final crop size this year may be even lower, given the likelihood of a smaller-than- expected crop in California,” Ms Piggott said. “Marketable supply could come under further pressure as the loss- and-exempt percentage of the 2023 California crop is reportedly well above average.

“Higher year- on-year production in the EU (Spain and Portugal) and Australia will offset the potential decline in California production and bring the 2023/24 global crop to levels similar to the prior season’s,” she said.