The Select Harvests Limited (ASX: SHV) share price is in positive territory today, nearing its 52-week high of $7.79. This comes after the almond producer provided a trading update to the ASX this morning.
At the time of writing, Select Harvests shares are up 1.73%, trading at $7.66.
In its release, Select Harvests advised it has processed 70% of its crop so far. The company estimates that crop volume, including the acquired Piangil Almond Orchard, will be approximately 28,250 metric tonnes. This reflects a 21.5% increase on 2020 levels, which stood at 23,250 metric tonnes.
The company added that its investment in new inshell optical sorters and better crop quality had led to increased production in Chinese and Indian markets. Inshell volume had already reached last year’s full-year amount and was “trading at a premium” to its almond kernels.
Strong market conditions
In addition to the crop update, Select Harvest touched on the Almond Board of Australia’s May Export Position Report.
It reported that Australian almond exports surged 67% year-on-year (March to May 2021), with the South/Central Asia market rocketing 306% during the period. Other notable increases included Europe, up 20%, and the North-East Asia (China) market also up 46%.
The current market price for almonds accelerated between $6.75 per kilo to $7.25 per kilo, reflecting a $0.50 per kilo jump. Select Harvests noted that demand remained robust at these levels.
So far, 65% of the company’s 2021 crop has received commitments at prices in the range of $6.15 per kilo to $6.45 per kilo. The remaining portion is said to be at the lower value grades.
In addition, the company said next year’s crop was tracking as planned, with “good tree health” and “sufficient chill hours” from all regions. It expects pollination to peak around mid-August, and beekeepers have begun delivering hives to Select Harvests orchards.
Select Harvests managing director Paul Thompson commented:
The strengthening of current market conditions is pleasing with the demand for inshell almonds, almond kernels and value-added almond products remaining strong.
We are looking forward to a strong performance in 2022 including the benefits of our Piangil Almond Orchard acquisition, the improving profile of our orchards and the recent strengthening of the almond price.
About the Select Harvest share price
Over the past 12 months, Select Harvest shares have lifted to record a 52-week high of $7.79 yesterday. The company’s share price has gained more than 30% since this time last year.
On valuation metrics, Select Harvest presides a market capitalisation of around $905 million, with 120 million shares on its books.