TOKYO -- Global prices of almonds and nuts are rising, contrary to the expected impact of the U.S.-China tariff battle.
Almonds are going for around $3.25 per pound, or 453 grams, in the U.S., having jumped 8% since the September-October period of last year. The U.S. produces 80% of the world's almonds, with the state of California leading the way.
Last July, No. 1 importer China imposed a 50% retaliatory tariff on American almonds amid the trade conflict with Washington. Yet, while the Almonds Board of California reported a 25% year-on-year decline in shipments bound for mainland China and Hong Kong from August to February, a trading company representative said procurement of American almonds did not decrease as much as anticipated.
Total shipments of American almonds fell 1% on the year in the seven months through February 2019. While exports to China did fall, other markets have been picking up the slack. Shipments within the U.S. rose 4%, while those to Canada and Mexico climbed 10%. Exports to Southeast Asia were up 13%, and Japan procured 5% more.
Almonds, touted for their health and beauty benefits, are popular worldwide for snacks, sweets and beverages like almond milk.
China, meanwhile, has been buying Australian almonds, which are not subject to the tariffs and are harvested at a different time of year.
For the 2018 to 2019 crop year, which runs from Aug. 1 to July 31, U.S. production is expected to come in at 1.02 million tons, up slightly from the previous year. In California, some farmers are switching from products such as prunes and raisins to nuts. Still, the supply-demand balance is tightening as global demand grows.
In Japan, which relies on imported almonds, the price trend is pressuring trading companies. "A fierce price war has made it difficult for trading companies to pass on rising wholesale prices to consumers," said a representative of one trader.
A similar story is playing out in the pistachio market, where prices are up about 6% on the year in the U.S., at around $4.50 per pound.
The U.S. and Iran are the world's top two producers. China slapped 45% tariffs on American pistachios, and U.S. growers had a good crop in 2018 -- two factors that ought to have created a glut. But Iranian production plunged about 70% due to unfavorable weather, among other reasons.
"U.S. farmers remain bullish as Iran's production declined," said a representative of a trading company.
A nut vendor in Tokyo said Iranian pistachio prices have jumped nearly 30% to about 2,200 yen ($19.74) per kilogram, from about 1,700 yen per kilogram. The shop has switched from Iranian to American pistachios for its mixed nuts, due to the shortage and rising cost.
Cashews are also trading at high prices, at around $4.50 a pound. From June 2017 to March 2018, they hit record highs of about $5.50, due to a 40% decline in crop yields resulting from insect damage in Vietnam. The Southeast Asian country and India account for the bulk of cashew production.