Market Insights

October 2023


The 2023/24 season is upon us with and with a new crop also comes the hope of carrying over the positive momentum shown in recent months and getting returns to sustainable levels. The USDA has revised the NASS crop estimate from 790,000 tons to 760,000 tons. This was due to the previous forecast overestimating the total bearing acres. The revised bearing acreage stands at 375,000, reflecting a 6% reduction compared to last year. As expected, the crop has been about two weeks late this year, particularly for earlier varieties, but reported quality has been very positive. This has likely emboldened handlers who have held firm on pricing, resulting in limited trades, as buyers are hesitant to purchase at high prices with the expectation of a significant price drop in the near future.

September shipments were strong at 42,073 tons, marking a 6.2% increase compared to the same period last year. This further solidifies the commitments observed in recent months, primarily driven by unshipped USDA product. This is reflected in the strong domestic shipments, which were up 16.9%, reaching 31,417 tons. Export shipments underperformed at 10,656 tons, down 16.4% compared to last September. 

It is important to note that tariffs in Turkey have increased to 15% from 4%. Shipments to Turkey were down -78% in September.

Reported commitments in September were 154,739 tons, down 2.57% compared to last year. Similarly, new sales saw a decrease of 2%, totaling 112,477 tons. The reported commitments and new sales can likely be attributed to the remaining unshipped USDA product and discounted old crop sales. We expect commitments to increase as prices soften.

The coming weeks could be defining for the walnut industry. While handlers have tried to maintain firm prices, uncertainties stemming from higher interest rates and the state of global affairs could pose new challenges and limit options.

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 September were down 11%  vs last year, but shipments are still outperforming by 8% YTD. Chile has made significant gains in India and Turkey.

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

  • Shipments are up 6.2% YoY
  • Most sellers continue to hold firm pricing
  • CA crop quality is the best it has been in years

Bearish Trends

  • Commitments are down 2.57% and new sales are down 2% (YOY)
  • Exports are down 16.4% (YOY) and continue downward trajectory
  • Global affairs and high interest rates could limit export selling opportunities 
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