Foreign investors are circling Australia’s growing almond industry as a global shortage drives up prices.
Australian almonds have become more appealing as drought ravages California, which produces about 80 per cent of the world’s almonds.
In response, almond prices have risen to a nine-year high of about $US3.45 ($3.70) a pound (about 450 grams).
That has seen the Australian almond industry grow massively. It now accounts for about 7 per cent of global supply and has pipped Spain as the world's second largest producer.
In the past year the Australian crop has risen by almost 50 per cent to 73,361 tonnes and the value of exports has more than doubled to $370 million, according to official data.
PAC Partners agribusiness analyst Paul Jensz said investors that poured money into the Californian industry were beginning to look elsewhere and Australia was ''putting up its hand''.
''America isn’t producing as much almonds as they were. They are down about 10 per cent than they were in record years, and that’s probably going to step down a bit further once this drought has effects in the next couple of years,'' Mr Jensz said.
''It’s just really a rebalancing. Essentially too much money has gone into long-term farming in the Californian basin.''
Mr Jensz said Australian almond farmers could ''quite happily'' double or triple production if they could access ''patient capital''. Indeed, once existing trees that have been planted reach maturity, production will near 90,000 tonnes.
Australian Almond Board chief executive Ross Skinner said many of the bigger orchards were talking to overseas investors to boost production further after global demand started outstripping supply last year.
''World demand has gone up by about the size of the Australian industry every year for the past 10 years,'' Mr Skinner said.
''It’s hard to see [supply] increasing dramatically, given the difficulties of water supply in the US.''
Almonds are Australia’s most lucrative horticulture crop, overtaking citrus and table grapes last year when it became the first to earn more than $300 million in exports, mostly to India and the Middle East.
Paul Thompson, managing director of Australia’s biggest listed almond producer Select Harvests, expects production to fall up to 20 per cent this year on last year's crop.
''Preliminary investigations indicate the downturn is most likely caused by the combined impact of wet growing and harvest conditions, insect damage and the extreme temperatures experienced through parts of the growing cycle,'' Mr Thompson said in the company’s latest harvest update to the ASX.
''[But] both local and export demand for the crop remains strong. The average price this season is $8.40 a kilogram, up 28 per cent on average prices achieved by Select Harvests last year.''