Nuts

Walnuts: China’s large crop fails to impress EU

September 7, 2023 at 11:57 AM , Der AUDITOR
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WASHINGTON D.C/BRUSSELS. Contrary to expectations, California’s walnut crop will rise by 5% to 790,000 tons as compared with last year as the USDA’s Objective Measurement Report states. Although bearing acres range lower than last year, yields have improved considerably. China’s large crop has left importers in the EU largely unimpressed this year so far.

US production to rise by 5%

Initial INC estimates predicted a 3% decline in US production in May and the acreage survey conducted by the California Walnut Board between October 2022 and June 2023 indicated a downturn in acreage for the first time on record. Growers, however, stated that the tress were in good shape and the Objective Measurement Report has confirmed this assessment. Bearing acreage has indeed declined by 4% to 385,000 acres as compared with last year, whereas yields should rise by 9%. The average nut set per tree has also climbed by 2% to 1,004.

These improvements are driven by the cold weather in winter, which gave the trees sufficient chill hours, as well as by the wet conditions in winter and spring that restored soil moisture. Quality should also be better than last year. Only downside is that growers struggled with high production costs. The USDA will release preliminary data on the price per ton and the total value of the crop in May 2024. Both dropped to record lows of USD 630/US ton and USD 473,760 respectively in 2022.

California walnuts, inshell

Acreage and production

2022

2023

Diff.

Bearing acres

400,000

385,000

-3.75%

Trees per acre

80.0

81.0

1.25%

Per bearing acre/US ton

1.88

2.05

9.0%

Total production

752,000

790,000

5.0%

USDA NASS 2023 California Walnut Objective Measurement Report

Buyers to profit from better supply situation

Oversupply will certainly come into play in the next few months. Although projections for US carry-out supplies indicate a 17% decline on last year, supplies will still stand at 112,000 tons. Reports also state that high-quality inventories are becoming more limited, but this will change as soon as the new crop arrives and give buyers more space to negotiate. Estimates, in addition, state that carry-outs will range 5% higher in China than last year at 120,000 mt. This year’s production is officially projected to remain flat at 1.4 million mt, but US industry representatives are sceptical in stating that Chinese farmers lack the advantage of experience, which can impact production in challenging rural areas. Local suppliers are, by contrast, more upbeat while actively collecting from the orchards.

Prospects are less encouraging for supplies in Chile and Ukraine. Although Chile’s walnut exports ranged 20% higher than last year from March to July, supplies will certainly become more limited as the season progresses. For Ukraine, production estimates issued by the USDA and the State Statistics Service of Ukraine (SSSU) ranged at 196,500 mt and 107,660 mt respectively in June, which is around 5% lower than last year. Impact of Russia’s aggressive attacks is that acreage has been lost, exports are more difficult and domestic consumption has declined. Labour is also in short supply.

China fails to impress EU buyers

Although reports have been rampant that China’s large crop has flooded markets and left US suppliers struggling to compete, buyers in the EU remain unimpressed by such developments this year so far as recent imports shows. Shipments from China have, in fact, slumped by 60%. Total EU imports also declined by 19% in terms of volume between January and August as compared with the same period last year according to the provisional data issued by the Directorate-General for Agriculture and Rural Development (DG Agri). In terms of value EU imports even range 44% lower. Imports stood at 80.856 mt worth EUR 494 million in January-August 2022.

The USA is the most important supplier for the EU by far and accounts for 65% of all EU imports, followed by Chile (14%) and Ukraine (11%). Germany is the leading importer within the EU and accounts for 43% of the total volumes imported in 2023 so far (28,124 mt). Spain (10,859 mt) and the Netherlands (7,829 mt) are next in line.

EU walnut imports (mt)

Country

2022

2023

Diff

USA

50,759

42,856

-15.3%

Chile

8,557

8,996

5.1%

Ukraine

10,050

7,110

-29.3%

China

6,778

2,740

-59.6%

Moldova

2,239

2,403

7.3%

Australia

81

201

148.1%

Kyrgyzstan

779

185

-76.3%

Argentina

18

144

700.0%

India

651

59

-91.0%

Vietnam

39

50

28.2%

Others

905

699

-22.8%

Total

80,856

65,443

-19.1%

HS Code 08023200 – Fresh or dried walnuts, shelled
DG TAXUD’s Customs Surveillance 01/01-01/09

 

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