Domestic almond production in India for the Year 2017-18 (August/July) is forecasted at 1,000 Metric Tonne (MT at kernel-weight basis), which is a nine-per cent decrease over the last year. Indian almond production is limited to the hilly states of Jammu & Kashmir and Himachal Pradesh; the annual yield per tree is usually low and ranges between 1,000-1,500 nuts. Shelling rates generally range between 20 and 30 percent for hard-shell varieties, but are about 40 per cent for thin-shelled varieties.
Demand growth for almonds is mostly driven by India’s expanding middle class and increased consumer awareness of products perceived as healthful. Indian almond consumption in MY 2017/18 has been forecasted at 97,000 MT, a 10 per cent increase over the previous year. This increase is driven by low market prices, a weak dollar, changing consumer preference, and increased demand during the non-festive season. Also, the early festive season is expected to lead to higher almond stocks in the Year 2017-18, which are forecasted at 39,400 MT.
Traditionally, the demand for nuts mostly occurs during the festive season, which runs from September to January. Now, however, the growing perception among Indian consumers about nutritional and health benefits associated with almonds is driving domestic demand beyond just the festive and winter season. Indian consumers regard almonds as a high-energy food, one which is well-suited for children, physically active people, and recovering patients. In addition to increased consumer preference for whole nuts, food processors are also using almonds in a broader variety of product categories such as breakfast cereals, snack foods, health foods, beverages, and confectionary products. The cosmetic industry, as well, is also increasing its use of oil extracted from lower-quality almond kernels.
Price-sensitive consumers find the current market prices attractive, particularly for Californian non-peril almonds, which have the size, uniform ‘eye’ shape, and sweetness desired. Australian non-peril and Carmel varieties also account for a growing segment of the Indian market. Iranian varieties like Mamra and Qumi are popular in the western and north-western regions of India (e.g. Rajasthan and Gujarat), and often get a price premium. Ample production and a strong rupee relative to the US dollar have driven average almond prices in India down by about 30 per cent in the Year 2016-17; these conditions are expected to remain constant through the festive season.
Low market prices, a relatively strong Indian rupee, changing consumer preference, and increased demand during non-festive season have driven almond imports to a record high at 99,500 MT in the Year 2016-17. For the Year 2017, however, the early festive season and late harvest in the United States likely will depress imports by five percent from that figure.
During Year 2016-17, the U.S. market share accounted for 78 per cent of India’s total volume of almond trade. Australia, the next largest exporter to India, had 17 per cent market share. Almond imports from the United States and Australia are mostly in-shell, non-peril or Carmel varieties and are shelled locally. Almonds from other origins are typically already shelled. Most almonds in India are sold by weight in loose form; only about six to eight percent of retail sales are packaged.
Trade Policy and Marketing Opportunity:
Although India does not maintain quantitative restrictions for almond imports, U.S. almonds face tariffs of INR 35/kg (in-shell basis) and INR 65/kg (shelled basis). Also, since 2006, India’s Directorate of Plant Protection, Quarantine and Storage Amended Order 2003 has required phosphine fumigation in the country of origin prior to shipment. In addition, the new Goods and Service Tax (GST), implemented July 2017, will assess a 12 per cent tax on both domestic and imported almonds. Market development opportunities remain, particularly among markets serving school children, young adults, and a growing urban work force. Additional opportunities exist among medium and large bakeries, boutique pastry shops, food processors such as cookie manufacturers and breakfast cereal companies, and institutional end users. Regions in southern and eastern India may also present new marketing opportunities.