The Select Harvests Limited (ASX: SHV) share price is up 6% to $6.46 today after the almond grower lifted its forecast for average almond prices from $8.20 – $8.50 a pound to $8.40 to $8.70 a pound for its 2019 crop.
The group attributed the expected almond price rise to a shortfall out of California which is the world’s largest almond growing market and as global demand remains healthy in particular from China.
The group also flagged that higher water costs would be offset by better yields and other productivity wins in assessing average production costs.
Select Harvests recently moved its financial year end to September 30 2019 and will report its results for the six-month period ending March 31 2019 this May.
Its management team believes the change in reporting period from a June year end will benefit the business and investors as it will fit in better with almond growing, sales, and production cycles.
Due to the unpredictability of almond prices the stock is actually a little lower than it was this time 5 years ago. As such anyone wanting to invest in this business should be careful around their timing.
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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.