- The country’s largest almond grower, Select Harvests, said it may take a financial hit from decreased Asian demand for the crunchy snack
- A fall in almond demand and prices is being predicted by Select due to the coronavirus outbreak
- While the company’s orchards are all based around Australia, the Asian middle class is a key driver of almond demand, according to Select
- As such, while it is in the clear at the moment, it is bracing for a potential slow-down in coming months
- Nevertheless, shares in Select closed 0.33 per cent up this afternoon at a flat $9 each
Australia’s largest almond grower, Select Harvests (SHV), is bracing for a potential downswing in almond demand as the coronavirus impacts Chinese consumers.
The company said it has started harvesting the tasty snack for the 2019-2020 crop, and the coronavirus has thus far had no short-term impact on Select’s financial performance.
Yet, while the company’s orchards are based around Australia, management warned shareholders that the impact of the coronavirus on Chinese demand could seep into the almond industry — particularly through the hit to Asian supply chains.
As such, Select said it expects a near-term softening in almond prices and demand due to the virus outbreak. Looking ahead, the company said the extent and duration of the weakened almond demand are dependent on how long it takes for the virus to be contained and Chinese supply chains to return to normal.
Select Harvest’s website highlights the Asian middle class as a crucial market for its almonds, with our neighbours to the east driving demand.
Nevertheless, while Select said it sources some of its raw materials from China, this shouldn’t be an issue. After a review of current inventories, the almond grower said it has enough stock to crack on even without the China-sourced materials.
The company said it will monitor the risks the virus poses to its businesses closely, but for now, it’s in the clear.
Select Harvests shares were trading upwards of 2.5 per cent higher for most of today’s session but pared things back in late-afternoon trade to a more marginal win. At market close, SHV shares were up 0.33 per cent and trading for a flat $9 each. The company has an $866 million market cap.