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, Nuts by ofi reports.
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, and 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 Türkiye, shipments are up 43% year-over-year. 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 metric tons, which is a 9% decrease compared to last year’s crop of 187,000 metric tons, and a 12.5% decline from the anticipated 192,000 metric tons for this year. Shipments for the month of October were down 17% versus last year, but shipments are still outperforming by 4% year-to-date. Chile has made significant gains in India (+105% year-to-date), but have underperformed in ME markets (-19% year-to-date). The 2023 crop is now estimated to be 95.1% sold.
China
China’s projected 2023 crop capacity remains flat at 1.4 million metric tons. 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 U.S. industry. For their 2022 crop, the projected carry-out is set to rise to 120,000 metric tons, resulting in a forecasted total supply of 1.52 million metric tons for the 2023 crop, signifying a 5% increase of 70,000 metric tons 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% year-over-year and exports are up 7.2% year-over-year.
- In-shell shipments are up 11.9% year-over-year.
Bearish Trends
- Commitments are down 9.7% and new sales are down 3% (year-over-year).
- The 2023 crop is coming in larger than estimated and expected.
- An abundant supply of alternative competitively priced nuts.