Nuts

Market Insights


November 2023

Walnuts

The walnut market experienced considerable activity in October, seeing substantial crop receipts and positive shipment figures across both domestic and export markets. Despite this, reported commitments continue to fall short of last year's performance as pricing held firm for most of October. Handlers have initiated pricing adjustments to bolster sales efforts.

Crop receipts for the month reached 689,547 tons, a 2% increase from last October and 11% higher than the 5-year average. This was influenced by delayed earlier varieties coinciding with Chandler crop arrivals. Quality reports continue to point to a healthy crop, with high light percentages, low defects, but slightly less edible meat. With an estimated 90% of the crop received, the industry is likely to exceed the forecasted 760,000-tons.

October shipments were strong, reaching 82,006 tons, marking an 11.7% increase compared to the same period last year. Notably, exports surged by 14.5% to 45,923 tons, displaying positive momentum in crucial markets. Despite the 15% tariff in Turkey, shipments there are up 43% YoY. Meanwhile, domestic shipments totaled 36,083 tons, up by 8.3% compared to last October.

Reported commitments for the month amounted to 212,221 tons, reflecting a decline of 9.72% compared to the previous year. Similarly, new sales saw a 6.8% decrease, totaling 139,487 tons. The low commitments are likely attributed to the firm pricing seen in October, which caused many buyers to remain sidelined. But now, with prices easing in recent weeks, the hope is that commitments will rise.

Chile: Chile's 2023 crop volume is expected to fall below initial forecasts. The crop receipts for 2023 are projected to be approximately 170,000 MTs, which is a 9% 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. Shipments FTM of October were down 17%  vs last year, but shipments are still outperforming by 4% YTD. Chile has made significant gains in India (+105% YTD) but have underperformed in ME markets (-19% YTD). The 2023 crop is now estimated to be 95.1% sold.

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. 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 total supply.

Bullish Trends

  • CA crop quality is the best it has been in years, with excellent color grades
  • Total shipments are up 11.7% YoY and exports are up 7.2% YoY
  • Inshell shipments are up 11.9% YoY

Bearish Trends

  • Commitments are down 9.7% and new sales are down 3% (YoY)
  • 2023 crop is coming in larger than estimate and expectations
  • Abundant supply of alternative competitively priced nuts
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