Almond Prices Explained
Almond prices fluctuate wildly as supply and demand remain unbalanced.
California ( the world’s largest producer of almonds, accounting for 80% of the global supply ) suffered unprecedented heavy rains that flooded the state’s crop.
Why are almond prices fluctuating?
1. Weather Condition
Weather conditions significantly draw almond prices due to their influence on its production. Almonds are highly sensitive to weather, particularly during critical growth stages like flowering and nut development.
For example, the intense winter storms that battered Californian farms during their pollination period made almond wholesale prices up 25% to 50% percent in late February 2023. Thus, this shows the contribution of weather conditions to almond price fluctuations.
2. Pest and Disease Outbreak
Pests and diseases damage almond trees and their crops. In severe outbreaks, they lead to significant reductions in its yields. With a lower supply of almonds, its prices tend to rise as demand remains relatively stable.
Additionally, almonds are traded globally, and pest and disease outbreaks in one region hold its global supply.
3. Market Demand
Changes in consumer preferences and increasing demand for almonds openly impact its prices. Higher demand due to health trends and population growth gives way to increased value, especially if its supply cannot keep pace with the rising demand.
Conversely, a decrease in demand or the availability of substitutes can put downward pressure on almond prices.
4. Production Costs
The cost of its production includes various factors such as input prices, labor, land, technology, regulatory compliance, and external economic factors.
Overall, these costs abruptly influence the final price of almonds in the market as growers and suppliers factor in these expenses when determining the selling price to ensure profitability.
Which variables impact the price of almond?
- Supply and Demand
- Weather condition
- Market Demand
- Production Costs
- Trade Policies
- Global Market Trends
Where does almond come from?
Almonds come from the fruit of the almond tree. It’s native to the Middle East, specifically the regions around Iran, Turkey, and some parts of central Asia.
Additionally, they are now grown in several parts of the world, such as Spain, Italy, Australia, Africa, and California. Here’s an overview of the almond production process:
1. Planting and Growing Almond Trees – Almond cultivation begins with planting its tree seedlings or seeds in well-prepared soil. Moreover, it requires a specific climate, typically warm and dry, with well-draining soil.
Furthermore, they need a certain number of chilling hours during winter to produce a good crop.
2. Orchard Management – Almond orchards need consistent attention and upkeep which involves activities like watering, fertilizing, pest control, and disease management.
Ensuring the trees are appropriately pruned and trained is crucial for achieving a high yield and facilitating convenient harvesting.
3. Flowering and Pollination – They require cross-pollination from another compatible almond variety for optimal fruit production. Therefore, honeybees are commonly used for pollination in commercial orchards.
4. Fruit Development and Maturation – After successful pollination, the almond fruit begins to develop. As it progresses toward maturity, the hull undergoes a color transformation and ultimately dries out, signifying its readiness for harvesting.
5. Harvesting – Its harvesting period usually occurs in late summer or early autumn. Mechanical tree shakers are used to shake the almonds off the trees.
Once the almonds fall to the ground, they are left to dry for a few days to a week, allowing the hulls to split open and dry out further.
6. Hulling and Shelling – After drying, mechanical hulling is carried out to eliminate the outer hull of the almonds. Additional processing includes cracking these shells to extract the edible almond kernel.
7. Sorting, Grading, and Packaging – After shelling, they are carefully sorted, taking into account factors like size, quality, and appearance. Depending on the intended final product, they might undergo further treatments such as removing the skins or roasting.
The last steps involve grading the almonds, packaging them, and making them ready for distribution and sale.
Top Applications of Almond
Almonds are popular in lots of sweet and savory recipes. Also, they are eaten as a snack or used as a garnish or decoration.
Furthermore, they are high in protein and fiber which are vital for good health. Here are some industrial uses of almonds and almond byproducts:
1. Cosmetic Product – Almond oil is used as a key ingredient in cosmetics and skin care products due to its moisturizing and skin-nourishing properties that will be found in lotions, creams, serums, and massage oils.
2. Aromatherapy – It’s a popular carrier oil in aromatherapy, often used to dilute essential oils before applying them to the skin during massages or other therapeutic treatments.
3. Pharmaceuticals – Due to its skin-soothing properties, it is used in the pharmaceutical industry for formulating ointments and topical treatments.
4. Soaps and Detergent – Additionally, it is utilized in the production of soaps and detergents due to its ability to produce a rich, creamy lather, and its skin-friendly properties.
5. Perfumes – Almond oil is sometimes used as a base oil for perfumes and fragrances, adding a light and nutty scent to the final product.
6. Biomass and Biofuel Production – it’s shells can be used as a biomass fuel source due to their calorific value.
7. Animal Feed – Almond meal, a byproduct of almond processing is employed as a protein-rich ingredient in animal feed for livestock.
What is the future price of almond?
Almonds remain one of the best investments for limited water resources as they generate a solidly good economic return.
Also, they provide a good economic return for farmers as they generate a high price per pound and have a secondary market for their hulls and shells.
As a result, its market is expected to grow in the next few years as more consumers demand plant-based and nutritious foods.
Overall, the average price of almonds will be $7,884 per metric ton in 2027. Market analysts predicted that its market size will grow to $12.57 billion by 2028, at a CAGR of 5.55% during the forecast period of 2023-2028.