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Walnut Situation and Outlook
| Walnut production in selected countries in 1999/2000 is forecast at a record 665,000 tons, 10 percent above the previous year’s output. The United States is expected to account for nearly 80 percent of this increased production due to a record crop. This record world walnut output, coupled with a record world supply for all tree nuts, will likely decrease already low walnut prices. U.S. prices for walnuts have declined 36 percent since 1996. However, larger supplies and anticipated lower prices are expected to spur world consumption and exports, which are forecast to increase 16 percent in 1999/2000. Most of this growth is attributable to the United States, the world’s second largest producer. Exports from China, the world’s largest producer, remain relatively stable due to strong domestic demand. |
United States
The 1999/2000 U.S. walnut crop is forecast at 254,000 tons, 23 percent higher than last year’s crop and 4 percent above the 1997/98 record crop. The production increase is a result of the crop’s cyclical nature, good weather, and increased yields, due to stronger varieties and age composition of the trees. U.S. exports in 1999/2000 are forecast at a record 120,000 tons, a 20 percent increase from the previous year, due to this year’s record crop. 1998/99 shipments to the major European markets were down from 1997/98, but were up for Canada, Mexico, Australia and some Latin American markets.
With support from the Market Access Program, the U.S. walnut industry is trying to expand sales outside of the traditional holiday season. Expanding consumption is critical in selling the record crop, so marketing campaigns are focused on two areas: sending the message that walnuts are healthy for home usage, and expanding restaurant and bakery usage in entrees and baked goods. The bulk of the marketing strategy is aimed at the three largest markets -- Germany, Japan, and Spain.
China
Walnut production in 1999/2000 is forecast to increase 4 percent to 260,000 tons, due to new trees coming into production. Output is likely to increase in the short- to medium- term because of increased acreage and improved, higher yielding varieties. Domestic consumption is forecast to increase slightly, driven mainly by rising incomes and popular beliefs about walnuts’ health benefits. Imports are forecast to remain constant, due to increased production. Exports are expected to increase only slightly, due to higher production tempered by strong domestic demand. China’s main export markets are North and South Korea and United Arab Emirates.
Turkey
The 1999/2000 Turkish walnut crop is forecast to remain constant. However, walnut production is expected to gradually rise in the next 3-5 years, as new trees with improved varieties reach bearing age and as acreage is increased. Per capita consumption is relatively stable in Turkey. Fifty percent of production is consumed on-farm and the remainder is marketed. Most of the marketed walnuts are consumed whole, with only a limited amount being processed. Walnut trade is very limited: most imports are inexpensive, lower quality nuts from neighboring countries; higher quality domestic nuts are usually exported.
India
India’s 1999/2000 walnut production is forecast to decrease 7 percent, due to the alternate bearing nature of the crop and poor weather conditions. Exports are forecast at 15,000 tons in 1999/2000, up slightly from the previous year. Export sales to traditional European markets have declined in the past three years, due to increased competition from east European suppliers, particularly Moldova. India managed to recapture some of that market by easing export prices during 1998/99. Major export destinations, besides the EU, are Egypt and the United States. Given the high tariffs and strong domestic production, there are few opportunities for imports. Anticipated low almond prices, due to the record U.S. crop, are expected to compete with walnut consumption in upper and upper-middle class households.
France
In 1999/2000, France’s walnut production is forecast at 23,000 tons, down 7 percent from last year, due to the crop’s alternate bearing cycle, decreased yields and some excessive rain during bloom. The United States remains France’s leading supplier of in-shell walnuts, due to continued low U.S. walnut prices. France has shifted its primary sourcing of shelled walnuts from China to Moldova, due to the latter’s lower labor costs, shorter transit time, and better quality nuts. French walnut exporters are worried by the increasing price competitiveness of U.S. walnuts in their main export markets, mainly Germany. French walnut consumption is relatively stable at 17,500 tons.
Italy
The 1999/2000 crop is forecast at 18,000 tons, up 50 percent from the previous year, due to favorable weather conditions. Future production is likely to decrease in the medium-term, due to declining acreage and lower productivity of older trees. Italy’s walnut imports for 1999/2000 are expected to decline, due to increased domestic supplies. Excluding minor quantities from eastern Europe, most of Italy’s imports are U.S. in-shell walnuts, which have accounted for over 80 percent of total in-shell shipments in the past 2 years.
The FAS Attache Report search engine contains detailed reports on Tree Nut Competition or Market Intelligence for 16 countries, including China, Turkey, India, France, and Italy. (For information on production and trade, contact Lisa Anderson at 202-720-5028. For information on marketing contact Ingrid Mohn at 202-720-5330.)
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