Walnut Situation and Outlook

United States

 

The 2000/01 U.S. walnut crop is forecast at 222,600 tons, 13 percent below last year’s crop, due to the alternate-bearing nature of the crop. U.S. exports in 1999/2000 are forecast at 97,000 tons, only slightly down from the previous year, due to lower production offset by strong export demand. U.S. grower prices have fallen 20 percent from 1999/2000 and are expected to contribute to relatively high levels of exports in 2000/01, despite the smaller U.S. crop. 1999/2000 shipments to the major European markets were down from 1998/99, but were up for Canada, Israel, Japan, and some Latin American markets.

 

The 1999/2000 walnut crop was the largest on record and contained probably the best quality of any walnut crop harvested in California. This large quality crop, combined with support from the Market Access Program (MAP), as well as publicity following the publication of the several health studies showing the health benefits of walnuts, all combined to make a good export year for walnuts. Exports to MAP-targeted countries in Canada, Germany, Italy, Israel, Japan, Korea and Spain are all slated to grow from 5 to 20 percent over the next 4 years. Germany is still the top market, reflecting the fact that it is both a good consumer of walnuts and the traditional trade center for nuts.

China

 

Walnut production in 2000/00 is forecast to increase 9 percent to 300,000 tons, as new, higher-yielding varieties of trees planted during the last decade come into production. Output is likely to increase about 10 percent annually in the short- to medium- term, due to improved varieties and advanced growing techniques. While there is no official data on walnut consumption, growing production and stable exports indicate that walnut consumption is growing. This increase is attributable mainly to rising incomes of many Chinese, who not only are demanding greater diversification in snack food preferences and baked goods, but also are becoming increasingly aware of the health effects of nuts.

 

Strong walnut demand is responsible for the rapid growth in walnut imports, which increased 400 percent from 1998/99 to 1999/2000. In shell imports comprised 90 percent of total walnut imports in 1999/2000. Stronger growth in in shell walnut imports is related to the rapid expansion of China’s processed walnut industry, which has low labor and manufacturing costs. Exports are expected to decrease slightly, due to strong domestic demand. China primarily exports shelled walnuts because of its comparative advantage in processing, but problems with quality and poor processing technologies prevent it from strongly competing in higher-quality export markets. Major export markets include the United Kingdom, Japan, Canada, and Hong Kong.

 

Turkey

 

The 2000/01 Turkish walnut crop is forecast to remain constant at 70,000 tons. The lack of a systematic crop survey and widely divergent estimates from government and non-official sources make it difficult to accurately estimate production. However, both sources agree that walnut production is expected to gradually rise in the next 3-5 years, as new trees with improved varieties reach bearing age and acreage is increased. Per capita consumption is relatively stable in Turkey, with 50 percent of production consumed on-farm and the remainder 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 2000/01 walnut production is forecast to increase 11 percent, due to favorable weather conditions. Exports are forecast at 14,000 tons in 2000/01, up 17 percent from the previous year, because of record domestic supplies and improved export competitiveness, due to the depreciation of the Indian Rupee. Export sales to traditional European markets were lower than anticipated in 1999/2000, due to increased competition from eastern Europe and the United States and inconsistent nut quality. Major export destinations in 1999/2000 were France, Spain, Egypt, Germany, Greece, Netherlands, Denmark, and the United Kingdom. There are no restrictions on walnut exports and no export subsidies are provided by the government. Given the high tariffs and strong domestic production, there are few opportunities for imports.

 

France

 

In 2000/01, France’s walnut production is forecast at 27,000 tons, down 7 percent from last year, due to unfavorable weather conditions. Due to a large crop and good quality nuts in 1999/2000, French in shell walnut exports increased to virtually all destinations except Germany, where France faced strong competition from the United States. Exports of shelled walnuts remained stable. French kernels are generally not price competitive on the export market, but may regain some market share in Germany in 2000/01 due to the appreciation of the U.S. dollar. Imports are forecast to increase 7 percent in 2000/01, due to the smaller crop. The United States remained France’s leading supplier of in shell walnuts in 1999/2000, due to its competitively-priced and higher-quality walnuts. However, French imports of U.S. walnuts in 2000/01 are not expected to increase significantly unless French walnut exports increase to make room for imports on the domestic market. Imports of shelled walnuts have remained stable. Moldova has replaced China as France’s largest supplier of shelled walnuts, due to labor and transportation cost advantages and better quality nuts.

 

Italy

 

The 2000/01 crop is forecast at 12,000 tons, down 33 percent from the previous year, due to the cyclical nature of the crop. 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 2000/01 are expected to increase, due to decreased domestic supplies. Excluding minor quantities from France and 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.

 

Chile

 

Chile’s 2000/01 walnut crop is forecast to increase 10 percent to 11,000 tons, due to the crop’s alternate-bearing cycle. Output in the short- to medium- term, however, is expected to increase, due to increasing acreage and replacement of aging orchards with improved, higher-yielding varieties. Exports are forecast to increase 7 percent in 2000/01, as a result of the higher output. Export volume is also expected to rise in the coming years, reflecting the forecasted expansion in production and better quality, once improved orchards come into bearing. Major export destinations remain Argentina and Brazil. Only small volumes of the highest-quality nuts, which can meet the often demanding size and grade specifications of customers such as Germany, are exported to Europe.

 

The FAS Attaché Report search engine contains detailed reports on Tree Nut Competition or Market Intelligence for 16 countries, including Chile, China, France, India, Italy, and Turkey. (For information on production and trade, contact Lisa Anderson at 202-720-5028. For information on marketing contact Ingrid Mohn at 202-720-5330. Also, visit the tree nuts web page at: http://www.fas.usda.gov/htp/horticulture/nuts.html)

 

Last modified: Thursday, April 06, 2000