Walnuts: gearing up for the new crop

Harvest just around the corner in China

With the harvest season just around the corner in China in September the global market is gearing up for the new crop. The first arrivals are expected at the end of August, which will enable buyers to catch a glimpse of the colour and yields of early peeled walnuts and start to negotiate prices. Price levels are now starting to mirror supply and demand.

Good news is that weather conditions have been favourable in the key producing regions of Xinjiang and Yunnan throughout July and fruit development is said to be good. Yields should be stable. Suppliers are, however, reluctant to sell old volumes as inventories are limited. In addition, China’s mid-autumn festival, which will be celebrated on 6 October, is not far off and domestic demand usually peaks around this time.

Traders in China are also casting an eye on the US. While Chinese suppliers have been able to profit from uncompetitive prices in the US and Chile in the past two years, the tables are set to turn as production is expected to bounce back in these two countries this year. California has so far witnessed mild spring and summer conditions, and objective estimates should emerge in September. European buyers have also started to making early inquiries for US walnuts. Quotations for 40% LHP US Chandler walnut kernels recently ranged at EUR 7.10/kg FCA Antwerp in 11.34 kg cartons for prompt shipments.

China’s tariff exemption suspension with little impact for US walnuts

China’s suspension of US tariff exemptions has caused a bit of a stir. According to a trade alert issued by the USDA’s Foreign Agricultural Service (FAS) on 22 July China suspended new applications for Section 301 tariff exemptions on US agricultural imports as of 1 August. Exemptions approved before this will, however, remain valid until 14 September 2025. Although this will restrict the access of US walnuts to China on a temporary basis at least, traders rightly emphasise this will only have a limited impact. As the recent “Shipment Report” issued by California Walnuts for July shows China does not rank among the top ten export destinations for the US. In-shell walnut shipments from the US to China have, however, climbed by 16% to 1.21 million pounds this season so far. US exports of walnut kernels to China have even risen fivefold to 184,840 pounds.

The move marks increasing tensions between the two countries, which agreed a 90-day truce in May over escalating tariffs. Negotiations for the final deal have been underway since with the Chinese side expression optimism that at deal will be reached. US president Donald Trump is, however, leaving his decision on whether to agree to a deal to the last minute as the deadline is about to expire 12 August.

Sharp downturn for US shipments in 2024/2025

Final walnut receipts for 2024/2025 stand at 591,512 tons (536,611 mt) of conventional and at 14,807 tons of organic walnuts (13,433 mt) according to the Crop Acquisition report. Shipments have declined sharply for the eleven-month period between September 2024 to July 2025 as compared with the previous season.

Kernel shipments 22% down

Kernel shipments are 22% down with domestic shipments declining by 23% and exports by 18%. Germany not only tops the chart but is also the only top ten destination to which exports have risen a bit by 3%. Japan, Spain and South Korea are next in line.

Slump in in-shell shipments

In-shell shipments are showing an even sharper decline of 54% with exports 55% down and domestic shipments 40% lower. Most notably, exports to Turkey as the leading destination have slumped by a stunning 73%. Italy is also sporting a 20% decline, whereas shipments to India have risen by 24%.

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