Walnut Kernels Ease Lower as China CN FOB Leads Mild Downtrend

Walnut kernel prices in China, India and the US are edging lower in early May, with CN FOB Dalian offers for kernels down about 1–2% week-on-week and organic halves from India and the US also softening slightly in EUR terms. The market is in a mild, orderly correction rather than a sharp sell-off. Chinese FOB Dalian prices for light kernels have eased for several weeks as export demand is only moderate and domestic buyers stay cautious, while fresh USDA-style projections point to a steady but not aggressively tight supply picture in China’s 2025/26 walnut crop. At the same time, no major weather shock is currently hitting key walnut belts in CN, IN or US, though China faces short-lived convective storms and a looming El Niño that could raise volatility later this year. Overall, near-term sentiment is slightly bearish but orderly, with buyers retaining some negotiating power.

Prices & Recent Moves

Note: USD-based indications converted to EUR at ≈1.08 USD/EUR for comparability.

Supply, Demand & Weather Drivers

China (CN)

China remains the dominant walnut producer, with recent official projections putting 2025/26 commercial in-shell output around 1.55 MMT, only slightly below earlier expectations and broadly adequate for current demand. Industry reports highlight some cold-weather impact in higher-altitude plantings but not to a level that would create an immediate global shortage. Over the last few days, China has faced a blue alert for severe convective weather, with heavy rain, hail and localized snow across parts of Southwest and Western regions. Some of these zones overlap with walnut areas (e.g. Yunnan, Sichuan highlands), but events are brief and still pre-main nut development. At this stage, they are more of a watch point than a confirmed supply shock. Separately, China’s climate agency is flagging a moderate-to-strong El Niño developing from May and likely lasting into late 2026. For walnuts, this raises medium-term risk of more erratic rainfall and temperature swings around flowering and kernel fill later this year, but it does not yet affect 3–6 week price expectations.

India (IN)

India’s walnut production is concentrated in Jammu & Kashmir and parts of Himachal Pradesh. No major walnut-specific disruption has been reported in the last 3 days; domestic mandi data mainly track other commodities at present and do not flag walnuts as an acute outlier. With the main crop months away and inventories still sufficient, FOB offers in New Delhi have room to soften slightly in line with CN and US benchmarks. Local currency stability versus the EUR and relatively firm internal food demand limit downside, but exporters still face competition from competitively priced CN kernels, especially in value-driven markets in the Middle East and Europe.

United States (US)

California supplies most US walnuts. Current public agronomic discussion is still focused on almonds and water, with post‑bloom weather described as generally favorable for tree nuts so far in 2026. There are no fresh reports of major frost or disease events in California walnut orchards in the last few days; historical frost risk maps show walnut belts usually past their main frost window by May. Industry communications through early 2026 emphasize ongoing efforts to support exports and manage carryover rather than a sudden supply shock. This backdrop allows buyers to negotiate modest discounts on organic halves, particularly as logistics normalise and competition from CN remains strong.

Fundamentals & Market Sentiment

• Stocks & Carryover: Indications from recent international nut reports still point to comfortable global walnut inventories, with China and the US both carrying reasonable stocks into 2026.
• Demand: Buying interest from Europe and the Middle East is steady but not aggressive. Food inflation pressure is easing, and buyers are spacing out tenders, using existing stocks rather than chasing new highs.
• Trade flows: No new trade policy shocks have been reported in the last three days for CN, IN or US walnut exports. Freight remains manageable versus the spikes seen in prior years, which supports arbitrage and caps origin premiums.
• Weather risk premium: Near-term weather news in China is noisy but not yet structurally damaging for 2026 crop expectations, so the weather premium in walnut prices remains modest for now.

Overall sentiment is mildly bearish-to-neutral: prices are easing from previously elevated levels, but the absence of a large new crop or policy surprise keeps moves orderly rather than disorderly.

Trading Outlook (CN, IN, US)

• Buyers (importers, roasters, packers): Gradually scale into CN light quarters and pieces over the next 1–2 weeks, taking advantage of the current softening. Avoid over-frontloading positions given medium-term El Niño uncertainty in China.
• Origin sellers – China (CN): Be prepared for more price resistance on bulk pieces; locking in forward sales on quarter and halves grades at current levels may be prudent before any weather-driven volatility later in the season.
• Origin sellers – India & US (IN, US): Expect modest price pressure as buyers compare offers directly with CN quotes. Maintaining quality differentiation (organic, high kernel yield) and flexible shipment windows can help defend current premiums.
• Short-term risk: Watch for any escalation of convective storms in CN walnut belts or new official downgrades in China’s 2025/26 walnut forecast, which could quickly stabilize or reverse the current downtrend.

3‑Day Regional Price Direction (EUR terms)

• CN – FOB Dalian kernels: Slightly lower to sideways over the next 3 days as buyers test the downside but sellers resist deeper cuts in the absence of fresh bearish news.
• IN – FOB New Delhi kernels: Sideways to slightly lower, tracking CN sentiment and exchange-rate moves; premiums over CN are likely to be carefully scrutinized by importers.
• US – Export walnuts (ex‑California, into EU/Asia): Mostly sideways; recent easing appears sufficient for now, with any further moves tied more to FX and freight than to immediate crop news.