Walnut Kernels Hold Steady as California Stocks Tighten and India Stays Firm

Chinese, US and Indian walnut kernel prices are stable to slightly firm, supported by tightening old-crop California stocks and steady downstream demand. No major weather shocks are visible in key origins over the next three days, keeping near-term price risk skewed mildly to the upside rather than signaling a sharp rally. Walnut markets are transitioning from an old-crop California squeeze to a watched-but-not-yet-bullish new-crop phase. In China, FOB Dalian kernel prices for light quarters and pieces are flat week-on-week, while India’s retail and wholesale ranges remain elevated versus global averages, underpinned by lower domestic production and strong festival-season demand. In the US, USDA terminal-market prices have stabilized at mid-range levels despite strong shipment numbers earlier in the 2025/26 season. With benign short-term weather in California, Xinjiang and India’s key consuming hubs, buyers face a window of relatively calm prices but limited downside.

Prices

All prices converted to approximate EUR using 1 EUR ≈ 1.10 USD, 1 EUR ≈ 90 INR.

Supply & Demand

California remains the key global driver. Strong 2025/26 shipments have drawn down old-crop stocks, with recent industry commentary pointing to California inshell inventories being “nearly sold out” and only modest kernel carryover, which helps underpin kernel values despite still subdued grower margins.

In India, domestic walnut production is structurally limited and recent wholesale and retail price indications remain elevated versus international benchmarks, confirming resilient consumption and continued reliance on imports. Chinese kernel offers provide the main competitive pressure, but the current flat FOB Dalian curve suggests no immediate surplus-driven discounting. On the demand side, buying interest into Europe and the Middle East is described as steady rather than aggressive, with kernels preferred as California inshell availability tightens.

Weather & Crop Conditions (CN, IN, US)

Weather over the next three days is broadly non-threatening for major walnut regions. In California’s Central Valley, short-range forecasts point to seasonally warm, dry conditions without extreme heat spikes, consistent with earlier industry updates that flagged adequate water availability and no acute weather stress for the 2026 crop so far.

In China, key walnut areas such as Xinjiang and northern provinces face typical late-summer conditions; no major storms or frost risks are indicated in current short-term outlooks. In India, main walnut orchards in Jammu & Kashmir are past key flowering stages, and near-term weather in consuming hubs like New Delhi is mostly relevant for logistics rather than yield. Current forecasts show continued monsoon season humidity but no disruption-level events reported for walnut trade flows over the next few days.

Fundamentals & Drivers

• US stocks tightening: California shipments in 2025/26 have run well ahead of last year, reducing available old-crop supply and helping to floor global kernel prices even as grower returns stay below long-term averages.
• Chinese price stability: Flat FOB Dalian indications over recent weeks for light quarters and pieces signal balanced local supply; exporters appear unwilling to discount further given higher costs and limited competition from discounted California old crop.
• Indian firmness: India’s wholesale and retail price bands remain high versus global averages, reflecting modest domestic production and resilient consumption ahead of festival-related demand, which makes India an attractive destination for higher-value kernels.
• Macro & FX: With no sharp moves in major currencies over the past days, EUR-based import costs track underlying USD kernel prices; this keeps European buyers focused more on origin spreads (China vs US vs India) than on FX volatility.

Trading Outlook (Next 1–2 Weeks)

• Buyers (EU/Asia importers): Use current stability in Chinese FOB and US terminal prices to finalize nearby coverage, especially for standard light quarters and pieces, but avoid over-committing far forward before clearer guidance on the 2026 California crop size.
• Chinese exporters: Maintain offer discipline; with California old-crop nearly cleared and no immediate weather threats, the risk of a sharp downside break appears limited. Opportunistic small upticks in EUR offers may be achievable for higher-spec kernels.
• Indian traders: Given firm local consumer prices and tight quality supply, holding light halves looks justified, but monitor any step-up in Chinese kernel availability that could cap further upside in imported grades.

3-Day Regional Price Indication (Directional, in EUR)

• CN (FOB Dalian kernels): Light quarters and pieces expected to trade in a flat to slightly firmer band around 2.6–3.0 EUR/kg, with steady export demand and no fresh supply shock.
• US (California kernels into EU): Offers for standard light halves likely to remain broadly stable in the 4.0–4.3 EUR/kg range, supported by tight old-crop stocks but tempered by cautious new-crop sentiment.
• IN (New Delhi FOB kernels): Local and export-oriented prices seen holding firm around 4.7–5.0 EUR/kg, with upside risk if festival demand accelerates and imports do not expand quickly.