Export-Led Rally Keeps Walnut Shipments Elevated While Prices Stay Soft

US walnut movement is running well above last season, driven almost entirely by export demand, while kernel prices remain broadly flat in EUR terms. Strong kernel shipments into Europe and firmer in-shell buying from the Middle East and Africa contrast with softer volumes to Spain, India and South Korea, pointing to a market still working through surplus stocks rather than facing tightness. Robust in-shell shipments close to 300 million pounds so far this season—more than double last year’s pace—underscore how aggressively US sellers are moving product into export markets. May in-shell exports were more than twice year-ago levels, while kernel exports grew at a solid double-digit rate despite slightly weaker domestic kernel demand. With Chinese walnut kernel offers stable over recent weeks and California’s growing conditions seasonally warm but not extreme, the global market currently appears well supplied, keeping a lid on price upside in the near term.

Prices

Chinese walnut kernel FOB prices in mid-July show a flat profile compared with late June, indicating a steady and well-offered market. Converting from USD-equivalent levels, recent quotes imply approximate indications of:

Stable kernel prices despite very strong US shipment growth suggest that elevated exports are more a function of aggressive selling and discounted values in recent months than of a structurally tight balance sheet. Producer price indices for US walnuts also continue to signal a comparatively soft price environment versus earlier years, even if the steepest declines are behind the market.

Supply & Demand

Total US in-shell shipments this season are approaching 300 million pounds, more than double the volume recorded over the same period last year. May in-shell shipments reached 12.862 million pounds versus 5.558 million pounds a year earlier, with exports accounting for 12.498 million pounds—sharply higher than 5.229 million pounds previously—and domestic in-shell use up a more modest 11%.

Kernel movement paints a picture of firmer overseas demand offsetting domestic softness. Overall kernel shipments are up about 11% year on year, with export kernels advancing 18% while domestic kernel shipments slip by roughly 1%. Europe remains the main outlet for walnut kernels, with volumes to the region rising around 24% to 168.9 million pounds; Germany is especially strong at +32%, and the Netherlands, UK and Italy also take more product. Spain and South Korea import less, though Taiwan’s intake increases, indicating selective demand shifts within key consuming regions.

In-shell exports show a mixed regional pattern. Shipments to Europe edge down 5% to 53.1 million pounds, with Spain off by 13%. India’s in-shell demand also eases by around 10%. However, total in-shell exports to Asia-Pacific still grow by about 5%, and the Middle East and Africa stand out with shipments surging 76% to roughly 20.3 million pounds from 11.5 million pounds. Israel remains among the ten largest buyers, with volumes up about 8%. Overall, stronger international buying—rather than domestic demand—has been the principal driver of US walnut movement so far this season.

Fundamentals & Weather

The combination of very strong shipment growth and broadly steady prices implies that the global walnut market is still working through ample supplies. Industry commentary on earlier shipping months already highlighted that the elevated pace reflected improved logistics and sellers’ determination to reduce inventories in a soft price environment, more than an outright shortage of product. This dynamic appears to remain in place given the latest May numbers.

On the supply side, California’s Central Valley—core production area for US walnuts—currently faces seasonally hot, dry conditions, but without acute short-term weather stress. Recent forecasts show typical summer heat with low humidity and limited precipitation across the San Joaquin Valley and surrounding nut regions. While medium-term water availability and potential El Niño-related volatility remain risks heading into the next season, near-term crop development does not point to an immediate supply shock.

4–8 Week Outlook & Trading Recommendations

With export-led shipments running far ahead of last year, but prices still broadly flat, the walnut market looks balanced-to-bearish in the short term. The key risk factor is whether current export strength persists once major importers have rebuilt pipeline stocks ahead of the new Northern Hemisphere crop.

• Importers / Roasters (EU & MENA): Consider covering a portion of Q4 2026 needs at current EUR price levels, which still reflect a historically soft environment. Focus on kernels from origins where shipment growth is strongest (US) to benefit from competitive offers, but monitor freight and insurance costs into the Middle East and Africa.
• Buyers in Spain & India: With in-shell imports currently lower, there may be room to negotiate more aggressively on price in the coming weeks, especially for off-sizes and lower grades, before peak pre-Christmas demand starts to firm the market.
• Producers / Handlers (US): Given the strong pace of shipments and lingering stock overhang, avoid overcommitting new-crop volumes at deep discounts. Instead, use current export demand to steadily reduce old-crop positions while retaining some flexibility for potential weather or logistics surprises later in the season.

3-Day Directional Outlook (EUR-based)

• FOB China kernels (bulk industrial grades): Stable in EUR; competition between Chinese and US supply caps upside.
• FOB EU organic halves: Stable to marginally firmer as demand for premium kernels into Western Europe remains resilient, but no broad rally expected.
• US-origin in-shell, export basis: Sideways; strong shipment pace continues, but large available volumes and normal weather limit near-term price strength.