CANBERRA, Aug 30 (Reuters) - Australia's almond plantations grew by 3% last year, an industry association said on Friday, as concerns about rising production costs and the availability of water weigh on an industry that boomed in the last two decades.

The area of Australia covered by almond trees rocketed from just 3,500 hectares (8,649 acres) in the year 2000 to almost 60,000 hectares two decades later, turning the country into the world's second-largest producer after the United States.

But growth has since slowed sharply, with a mix of removals and new plantings lifting the total area under cultivation to 64,192 hectares by the end of 2023, up 1,778 hectares from the prior year, the Almond Board of Australia said in a report.

The industry has experienced a difficult few years of falling almond prices, too-plentiful rainfall that stunted yields and the arrival of a bee parasite, varroa mite, complicating pollination.

In addition, there are mounting fears that water will become costlier as the government restricts the amount of river water available to agriculture in southeast Australia to what it says are more sustainable levels.

Almond Board CEO Tim Jackson said higher costs of production, low returns and uncertainty around longer-term water use had slowed the industry's expansion.

"The decade long planting boom that has resulted in the industry more than doubling in size has levelled off as existing growers and potential investors take stock," he said.

Australia exported 106,599 metric tons of almonds in the 2023/24 season worth nearly $500 million, with around half going to China and India, the Almond Board said.

About 1.5 million tons of almonds are produced globally each year, nearly four-fifths of them in California.

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https://www.reuters.com/markets/commodities/australias-almond-plantations-eke-out-slow-growth-amid-water-worries-2024-08-30/