May 5, 2015

Growing global demand and the ongoing drought in California have resulted in a significant and rapid increase in the value of mature almond orchards in Australia.

Almond prices are reaching record highs on steady global demand, particularly from the Middle East and Asia where recent studies indicated consumption has tripled in five years.  And due to a tightening of supply from California and a strong U.S. dollar making U.S. exports more expensive, demand for Australian almonds is expected to remain a main driver for the Australian industry and orchard values.

Paul Thompson, managing director of Australian almond growing and processing company, Select Harvests, tells the Financial Review that his company’s share value has skyrocketed from $1.50 per share to almost $8 per share over the past three years, and the value of orchard land has tripled from $1,600 per acre to $5,000 per acre over the past five years.

The drought in California leading to a decline in U.S. almond supplies of about 12%, has led to a scenario where Australian producers can capitalize on a southern hemisphere harvesting schedule step in and fill global supply gaps in India, Europe, and the Middle East.

Over the past 15 years, Australian almond production has climbed by 15% per year, while the country’s global market share has grown from 1% to 7% over the same time period.

In the past two years, Select Harvests has bought two almond properties, as Australia’s largest almond producer, Singapore-based Olam International has announced a deal to develop 600 acres of new almond orchards in New South Wales.

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