$7.70/kg almond spot price- SHV needs to be re-rated higher it seems..

I've been wondering with the almond spot price (the one that everyone has been bloody fixated upon!), what will be the improved valuation of SHV? Considering that many analysts have been valuing SHV with $7/kg almond sales price for next 3 years suggests that they probably have to revise their model and say 'sorry sorry sorry'. "I thought that it will be $7/kg forever!"


To answer the question on why almond price crashed, I think we have addressed it earlier already, but maybe worth relooking with fresh eyes.

1. California drought ending - yes there were some El Nino driven rains in Mar/Apr, however, the snowpack is still on average below normal. Looks like the drought in California is structural. The irrigation using groundwater will still be in place widely and the almond trees may just experience more sodium burn, leading to low yields.

2. Plenty of abandoned stocks in Middle East --> This situation should well be under control now that it's been a few months to sort out the mess and sell off the unwanted inventory.

3. US$ too high resulting in other countries refusing to import more almonds leading to slower demand --> US$ has gone down a bit as Fed is more dovish these days.

4. Almond Price has just been pushed up too much artificially in the last few months of 2015 --> Almond price has since dropped more than 50% already from peak and reached 2012 levels. At this price level, demand will increase rapidly just as back in 2012.

Now that these are behind us, we hope that constant stream of buyers will start replenishing their empty warehouse and that will indeed be very healthy for almond prices.