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Walnuts: global market in upheaval

February 15, 2022 4:28 PM, Der AUDITOR
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SACRAMENTO/KIEV. Even though the USA remains the most important supplier of walnuts, competitors are pushing their way further and further into the foreground. Concerned eyes turn to Eastern Europe and the crisis between Russia and Ukraine.

US walnut production likely to decline

A restructuring is currently taking place in the global walnut market. While the US remains the largest exporter, new players such as China, Ukraine and Chile are becoming increasingly important. As Rabobank experts among others report, the EU and Turkey remain the main import markets with steady demand, while buying interest from the United Arab Emirates and India continues to rise. After a record crop last season, experts expect US walnut production to decline in the 2021/22 season as trees are in a recovery phase and yields are therefore expected to be lower.

Rising production costs become a problem

According to Rabobank, current prices are neither a sufficient incentive to increase acreage nor a sufficient deterrent to reduce it. One problem is the rising production costs, which are putting pressure on margins. On the European spot market there have been noticeable price reductions in the course of the past weeks; Chandler LHP, 20% from the USA currently cost EUR 5.35/kg FCA Spain and are thus EUR 0.85/kg below last week's price.

Walnuts

Type

EUR/kg

Chandler, ELHP 80%, Chile, manually opened

7.75

Chandler, LHP 20%, USA

5.35

Chandler, inshell, 30-32 mm, Chile

2.55

Howard, inshell, jumbo, USA

2.25

Type 185, shelled, ELHP 90%, China

5.90

80% white halves, Moldova

7.25

White pieces, Moldova

6.15

40% light halves, Ukraine

6.15

FCA Spain

US exports down by almost a third

California Walnuts, meanwhile, has released updated figures for US walnut shipments. From the start of the season in September 2021 to the end of January, the country delivered a total of 164,095 mt of shelled and unshelled walnuts domestically and overseas, a 30% decline from the 235,042 mt shipped in the same period last year. The declines to Africa and the Middle East (-55%) and to Asia and Oceania (-42%) are particularly evident. Overall, no increase was achieved for any major export destination, with the exception of exports of shelled walnuts to Europe, which increased by 9%.

US walnut shipments, in mt

Destination

2020/21

2021/22

Diff.

Europe

55,882

53,977

-3%

Asia/Pacific Rim

42,072

24,507

-42%

Africa/Middle East

82,368

37,165

-55%

Central/South America

180

110

-39%

North America

51,708

46,821

-9%

Others

2,832

1,516

-46%

Total

235,042

164,095

-30%

California Walnuts; since the start of the season

Trade in Eastern Europe stable for the time being

Market players are looking anxiously to Eastern Europe, where tensions between Russia and Ukraine have escalated alarmingly in recent weeks. Contrary to their fears, however, trading seems to be proceeding in an orderly fashion for the time being. Some traders had speculated on price cuts that would encourage buyers to buy despite the crisis, but these have not yet materialised. In general, the market is rather quiet. The same applies to China, where stable prices and little activity are reported.

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