The Almond Board of California, cited in a Wall Street Journal article, says there will be a record almond crop when the harvesting of some varieties begins in about two weeks.
The WSJ article on Monday August 30 followed on the heels of our article last week about this subject. A piece on the subject in the San Francisco Chronicle today, August 1, even used the “glut” word.
The supply increase we wrote about faces the throttling back of demand in China because of steep tariffs, triggering a 10 percent decrease in almond prices.
The Chinese tariffs were a reaction to President Trump’s imposition of tariffs on imports from China. Yesterday he ordered a doubling of those tariffs because he believes that will bring the Chinese back to the bargaining table.
The Chinese have historically been such pushovers, after all. Right?
Chinese businesses are supplying domestic demand by buying more nuts from Australia and Africa, as well as more homegrown almonds. Additionally, China has closed a trading loophole through which American almonds were transshipped through Vietnam.
US almond exports to China in June were about half the amount in the same month a year earlier. Pre-sold almonds for the upcoming season starting August 1 were 156 million pounds. Last year’s pre-sales were double that.
China had been the second biggest importer of almonds after the European Union in years past. China’s current tariffs add 50 percent to a consumer’s price. Export prices dropped from $2.76 to $2.46 in the past two months.
While Chinese demand actually rose earlier this year, the imposition of tariffs has softened demand, according to the WSJ article.
Increased supply and decreased demand can lead to a glut, by definition. Has it?