Almonds consumption may dip by 11% in MY06

Consumption of almonds in India in the marketing year (MY) 2005-06 is forecast to decline by over 11 per cent to 24,000 tonne on expected higher prices due to the high import price of the US almonds vis-à-vis prices of other nuts, according to a report by the Foreign Agricultural Service.

In the subsequent year if import prices decline, consumption is expected to recover to 27,000 tonne.

Meanwhile, consumption in MY 2004-05 has been revised higher to 27,000 tonne on strong domestic demand. Almond consumption over the past few years has grown steadily, propelled by a strong economy, expanding middle class, growing health awareness and attractive relative prices.

India's consumption of almonds is almost entirely met through imports, with the US accounting for about 85 per cent share of the market. Consequently, domestic market prices are strongly influenced by the US prices.

Although almond prices were ruling well above the previous year's level since the beginning of the 2004-05 marketing year, prices of other competing nuts, including pistachios, cashew and walnut, were also higher during the peak consumption season between September and January.

However, since March 2005, almond prices have risen sharply, while prices of other nuts have declined or remained stable.

In early April, almond wholesale prices crossed the Rs 400 per kg level for the first time in two decades. According to trade sources, higher prices diminished demand, for both direct consumption and industrial use.

However, from February to August, a lean consumption period for almonds, overall consumption during MY 2004-05 grew to 27,000 tonne. But, continuing high export prices of the US almonds may further fuel the domestic prices in India during the upcoming season and constrain MY 2005-06 consumption, the report said.

India's almond imports for MY 2005-06 is forecast at 22,800 tonne (in-shell basis), down 15 per cent from the previous year. This is attributed to higher domestic prices triggered by higher prices for the US almonds, which dampened consumption. Assuming a slowdown in the US prices in 2006-07, imports are forecast to rebound to 25,500 tonne.