One of the leading rural property fund manager, Rural Funds Group, has increased its exposure to Australia’s hottest horticultural commodity, almonds, after striking a deal to develop 1500 hectares in two new almond orchards in the NSW Riverina, backed by a long-term lease to Singapore giant Olam.
The deals come as Australian almond growers continue to benefit from the continued drought in California, the world’s biggest almond growing region, which has driven up demand for the “super nut” from other regions.
In 2014/15, almonds were Australia’s most valuable horticultural export product with annual export sales of $422 million, an increase of 14 per cent on the previous year. According to the Almond Board of Australia, 50,000 tonnes were exported and 20,000 tonnes sold domestically.
Almond prices rose above $8.50 a kilogram last year, compared with $5 a kilogram in 2011, with orchard prices surging from $25,000 a hectare to more than $47,000 a hectare, according to recent Colliers International figures.
Rural Funds (RFF), which owns $250 million of poultry farms, almond groves and vineyards – supplying the likes of Baiada, Select Harvests and Treasury Wine Estates – has entered into contracts to acquire two former grazing and cropping properties – Kerarbury and Kamelda – south-west of Darlington Point for $19.25 million. The properties will be developed into new almond groves at a cost of $109 million and leased to Olam, Australia’s biggest almond grower, for a period of 22 years and nine months.
They have been acquired from local growers, the Toscan brothers, and are close to where RFF is developing 600 hectares of almonds for Olam at Tocabil, near Hillston, with 400 hectares already planted.
RFF managing director David Bryant said almonds, which make up 42 per cent of RFF’s 27 property portfolio by value, could in coming years replace poultry as its biggest revenue earner. “The almond sector is very strong and should remain strong for a couple of years.