Almond

General Characteristics

• Almonds, though considered to be nuts are technically the seed of the fruit of the almond tree, which is a medium-sized tree that bears fragrant pink and white flowers. The fruit, botanically referred to as a drupe has an outer hull and a hard shell with the seed inside.
• Almonds are commonly sold shelled. Shelling almonds refers to removing the shell to reveal the seed. Almonds with their shells attached are called unshelled almonds. Blanched almonds are shelled almonds that have been treated with hot water to soften the seedcoat, which is then removed to reveal the white embryo.
• Sweet almonds and Bitter almonds are two forms of almonds, of which sweet almond is the variety, which is consumed directly or indirectly by humans as a food product. Bitter almond is slightly shorter and broader than sweet almonds and are mainly used for extracting almond oil and not consumed as food, as it is poisonous.
• Chocolate confectionary, bakery and snacking are the three major global categories for almond usage.

Global Scenario

• The annual global Sweet almond production on shelled-basis has been in the range of 7 - 8.5 lakh tonnes in the recent years. Record crops and a steady increase in production were seen from 2005-06 to 2008-09 (Almond crop year is from August to July). However, the output in 2009-10 is forecasted to dip on account of unfavourable climatic conditions.
• United States of America is the single largest producer, consumer and exporter of Sweet almonds, with the country contributing to over 80% of the global almond production.
• The state of California in US is the most important producer of Sweet almonds, as this region is reported to be accounting for 99% of the American production.
• Nonpareil is the single largest variety planted in California. Its production is reported to be 38% of the total output, followed by Carmel (12%), Monterey (10%), Butte/Padre (9%) and Butte (8%).
• The world's largest almond handler is the Blue Diamond Growers Cooperative, which is located in Sacramento, California. Blue Diamond is owned by over two-thirds of California growers and markets one-third of California's crop.
• The other producing countries are Australia, Turkey, Chile, European Union, China and India with a production of 26,000 tonnes, 16,000, 9500, 79,800, 1,500 and 1,200 tonnes on a shelled basis in 2008-09. Spain is the single largest producer in the European Union.
• The annual trade in almonds has been around 4.6 lakh tonnes (on shelled basis) in the recent years. The major exporters are US, Australia and Chile with exports of 4,40,000 tonnes, 12,300 tonnes and 6,700 tonnes (on shelled basis) in 2008-09. European Union, India, Japan, Canada and Turkey are the major importers with imports of 2,00,000 tonnes, 45,000 tonnes, 21,000 tonnes, 19,000 tonnes and 14,000 tonnes in 2008-09.
• While, the peak harvesting period of the Californian crop starts from mid-August and extends till September that of Australian crop occurs between February and April.

Indian Scenario

• The ever-expanding middle class and increase in health awareness, has lead the growing consumption of almond in the country in recent years. The annual rate of increase in India's domestic consumption of almonds is reported to be around 20%.
• More than 95% of almonds consumed by Indians is imported with more than 80% of imports being sourced from California. The other major country from which India imports almonds is Australia. While, Indian imports in 2008-09 is reported to be above 45,000 tonnes, the imports in 2009-10 are expected to rise to 50,000 tonnes.
• India has to resort to imports to meet almost its entire requirements as domestic production of sweet almonds is only around 1,200 tonnes. The other almond trees present in the country are of non-descript variety and mostly produce bitter almonds.
• India imports almonds with shells and processes it domestically to obtain shelled almonds, unlike almost all other importing nations, which import shelled almonds. This is due to availability of cheap labour and better appearance and lesser losses in manual shelling of almonds as against mechanized shelling.
• Most of the manual shelling of almonds in India is undertaken at Bombay and New Delhi, from where the shelled almonds are transported to other consumption centres.
• The Indian festival season extending from September to December is the peak consumption period for almonds, with maximum demand witnessed in November. Thus heavy imports of new Californian almonds are seen from September to meet the strong domestic demand during the festival season. Imports from Australia pick up during April and May after the harvesting season in that country.

Major Indian Trading Centres

Mumbai, New Delhi

Market Influencing Factors

• The domestic almond prices are a reflection of global supply-demand fundamentals, with the annual production at California being the most important price determining factor.
• The Indian traders keep a close track of the Californian crop progress with special focus kept on forecasts by US agencies, weather, pest attacks etc. The United States Department of Agriculture and the California Almond Board makes progressive assessment of crops, stocks, global supply and demand and releases regular reports, which are widely looked upon by the global market to determine prices.
• Domestically, stock present with traders and the cost at which it has been acquired is the most important price influencing factor.
• The major importers and traders of almond in India are well aware of the fundamentals of the domestic market requirements and are usually well-stocked to meet the annual festival demand.
• Meanwhile, as almond is not considered as an essential commodity and there is no local farming community producing this crop, policy intervention in this commodity is very minimal.