April 29, 2009
According to a new Rabobank podcast, the almond market will continue to benefit from expanding global demand.
In the podcast, Rabobank Food & Agribusiness Research and Advisory (FAR) Vice President Marieke de Rijke discusses growth in the export market due to several key factors: marketing, additional supply, and last year’s low value of U.S. dollar. (Download the full podcast.)
“Exports have grown significantly in recent years,” said de Rijke. “We have seen a huge increase in demand due to the efforts of marketing organizations. They have focused on promoting the health benefits of almonds, and have communicated this all over the world. So, not only in the U.S., but in many foreign countries demand for almonds has grown.”
As a result of increased consumption levels and high grower prices, which made almonds more attractive, growers increased production volume. In fact, during the last decade, more than 250,000 acres of almonds have been added.
“Despite the economic downturn and the recent appreciation of the U.S. dollar, export levels have remained high,” said de Rijke. “In 2008 however, production volume was so high that export growth was not enough to offset increased production levels. So, we’re now seeing higher inventory levels than we have in the past.”
In addition to higher inventory, a water shortage in California – the main supplier of almonds for the world – is impacting the supply of almonds. The state is in its third year of drought, which will limit the water some growers will be able to give their trees and reduce almond yields in 2009.
In the longer term, exports are likely to grow as more become aware of the health benefits. China, India and Russia are expected to drive much of the consumption growth. For example, 80 percent of India’s population is vegetarian, and are increasingly using almonds as a protein source.
“U.S. almond growers will profit from consumption growth,” said de Rijke. “Not only in the U.S. but also around the world.”
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