Market Insights

August 2023


The walnut industry is maintaining its favorable trends seen in recent months, encompassing both pricing and shipments. The ramifications of the USDA purchase and the modified crackout rate have effectively reduced the total supply, prompting buyers to cover near term positions. Crop receipts for the 2022 crop year remained unchanged at 747,870 tons, indicating that any forthcoming adjustments are likely to be minor.

July's shipment figures remained positive, up 47.6% vs last July. YTD shipments are now up 11.6% vs last year. While shipments are on a positive trend, it may not be enough to bring the carryout to the desired level of under 100,000 tons. Projections for August's shipments suggest they will remain above average, but fall short of the original forecast. On a brighter note, exports surged by 32.6% compared to the previous July, contributing to YTD exports nearing last year's performance (-1.5% YTD).

July's reported commitments continued to perform well, posting a 10.6% increase vs last year. However, new sales for the month experienced a 7% decline compared to the same period last year. The sold percentage of total supply has now reached 96.2%, marking a 4% rise from last July. Substantial movements are not expected until more information on the upcoming new crop becomes available.

The updated carryout projection now stands at 112,000 tons, showing a 17.4% decrease compared to the 136,673 tons carried forward from the previous year. While there has been an upswing in demand for walnuts as the crop year winds down, it's evident that the most desirable inventory is becoming scarce, leading to upward pressure on prices. Consequently, many buyers are adopting a cautious stance, being reluctant to commit to larger quantities at higher prices. The Objective Estimate, released on September 1st, will play a pivotal role in shaping sales activities in the upcoming weeks. Reports on the incoming crop have been largely positive so far, and we will continue to closely monitor for developments.

Chile: Chile's 2023 crop volume is expected to fall below initial forecasts. The crop receipts for 2023 are projected to be approximately 168,000 MTs, which is a 10% decrease compared to last year's crop of 187,000 MTs, and a 12.5% decline from the anticipated 192,000 MTs for this year. In terms of July shipments, there was a notable increase of 15% compared to the previous year, accounting for 53% of the total crop. Current forecasts suggest that stocks will be depleted by the year's end.

China: China's projected 2023 crop capacity remains flat at 1.4 million MTs; however, the actual harvest outcome is yet to be determined. Chinese walnut production is primarily driven by smaller farmers, posing challenges in collecting accurate data. Nonetheless, the increase in labor and capital costs mirrors the difficulties faced by the US industry. Unlike the US, Chinese farmers lack the advantage of years of planning and experience. This circumstance could potentially lead to a reduction in walnuts harvested from more challenging rural areas. For their 2022 crop, the projected carryout is set to rise to 120,000 MTs, resulting in a forecasted total supply of 1.52 million MTs for the 2023 crop, signifying a 5% increase of 70,000 MTs compared to the 2022 crop.

Bullish Trends

  • Shipments are now up 11.6% YoY
  • Exports are up 32.6% vs last July
  • Chile’s 2022 crop supply is down 10% and shipments are up 15%

Bearish Trends

  • Global supply for many competing nuts is also increasing
  • CA’s 2023 crop is expected to be one of the largest in years
  • China’s crop capacity remains and expected to grow export market share
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