Walnut Market Tightens as U.S. Shipments Surge and Prices Firm

U.S. walnut fundamentals have turned distinctly bullish: in-shell shipments are running at more than double last season’s pace, exports are the key driver, and international prices are firming, helped by recent kernel price gains in China and stronger export quotations into Europe. Global trade flows are rebalancing after two heavy crop years, with the U.S. aggressively clearing stocks through sharply higher in-shell exports to Turkey, the Middle East and Africa. Kernel demand growth is more moderate but solid in Europe, while India and parts of Asia remain selective buyers. Weather in California’s Central Valley is seasonally hot and dry, supporting crop maturation but keeping weather-related supply risks on the radar.

Prices

China has seen a sharp increase in walnut kernel prices over the last two weeks, signalling tighter nearby supply and stronger internal demand. At the same time, American export offers into Europe have risen by about USD 70–160/mt, confirming that the prior downtrend in export quotations has reversed and that sellers are regaining some pricing power.

Spot offers from China reported on the physical market remain broadly stable week-on-week in euro terms. Approximate converted indications are around EUR 3.0–3.1/kg FOB Dalian for light quarters and EUR 2.1–2.2/kg for light amber pieces, with light broken pieces near EUR 2.7–2.8/kg. Premium organic halves from the U.S. and India are steady around EUR 4.1–4.8/kg and EUR 4.8–5.6/kg FOB, respectively, indicating no immediate oversupply pressure at the high end of the quality spectrum.

Supply & Demand

American in-shell walnut shipments are exceptionally strong this marketing season, approaching 300 million pounds, with exports clearly driving the expansion. May in-shell shipments reached 12,862 pounds, more than double the 5,558 pounds recorded a year earlier. Export volumes climbed to 12,498 pounds versus 5,229 pounds last May, while domestic shipments increased by roughly 11% to 364 pounds.

Season-to-date in-shell shipments now stand at more than twice last year’s level. Exports are up by 114% and domestic usage by 47%, underlining robust global absorption of U.S. supply. Turkey has emerged as a standout destination, with volumes almost quintupling compared with last year. Shipments to the Middle East and Africa surged by 395%, rising from 37 million pounds to 183 million pounds, with the United Arab Emirates, Algeria, Lebanon, Iraq and Morocco all showing strong intake.

Kernel trade flows are expanding at a more measured but healthy pace. May kernel shipments rose by 23% year-on-year to 39,267 pounds, with exports up 41% and domestic movement up around 2%. Europe remains the dominant destination for U.S. kernels: season-to-date shipments increased by 24% to 168.9 million pounds, from 136.6 million pounds previously. Within Europe, Germany posted a notable 32% gain, while Spain saw a 13% decline, indicating some intra-European rebalancing of demand.

Outside Europe, Asia presents a mixed picture. India reduced its purchases by about 10%, likely reflecting both strong competition from other origins and price sensitivity. However, total exports to the broader Asia-Pacific region edged up by 5%, suggesting that other Asian buyers have stepped in to offset slower Indian demand. At the global level, recent industry balance sheets still point to comfortable overall supplies after large crops in the U.S., China and Chile, but the ongoing drawdown in U.S. stocks via exports is steadily tightening the available pool of competitively priced product.

Weather & Crop Outlook

Weather in California’s Central Valley, the core U.S. walnut-growing region, is currently seasonally hot and dry, with maximum temperatures frequently above 35 °C and minimal rainfall in the 14-day outlook. This pattern, consistent with the region’s Mediterranean climate, generally supports nut fill and kernel development but can exacerbate irrigation demand and water stress if heat persists.

So far, there are no widespread reports of major weather-related damage to the 2026 crop, and orchards are progressing through kernel development under broadly normal summer conditions. However, the combination of a tightening old-crop balance sheet and any potential late-season heat spikes or water constraints keeps weather risk asymmetrically skewed to the upside for prices as the market transitions toward the new harvest.

Fundamentals & Trade Flows

Recent global supply-and-demand assessments for walnuts show elevated but gradually normalizing stocks after successive large crops in key producers such as the U.S., China and Chile. The sharp acceleration in U.S. in-shell export shipments this season indicates that prior inventories are being actively liquidated into price-sensitive markets, especially in Turkey, the Middle East and North Africa.

China’s internal kernel price rally over the past two weeks, combined with stable-to-firm export quotations from the U.S. and steady Chinese FOB offers, suggests that the most aggressive phase of discounting is likely behind the market. European demand for kernels remains the key structural support, with Germany’s higher intake offsetting weaker shipments to Spain. In contrast, India’s 10% decline in kernel receipts underscores the growing importance of price competitiveness and quality differentiation as buyers adjust their origin mix.

On the consumption side, walnuts continue to benefit from strong positioning in healthy snack and bakery segments, especially in Europe and parts of Asia. However, macroeconomic headwinds and consumer downtrading in some emerging markets could cap demand growth at current price levels, particularly for premium organic kernels. The distribution of demand toward markets with expanding middle classes, such as Turkey and select MENA economies, is partially offsetting this drag and helping to absorb U.S. surplus.

Trading Outlook

• Short-term direction (next 2–4 weeks): Bias remains mildly bullish. Strong U.S. in-shell shipments, firmer American offers into Europe and rising Chinese kernel prices point to a gradually tightening spot market, even as overall global supplies remain ample.
• Buyers: End-users with coverage only into early Q4 should consider extending a portion of their needs now, particularly for high-spec halves and quarters. Focus on locking in stable Chinese and U.S. offers before further export price adjustments filter fully into European and MENA markets.
• Sellers: U.S. and Chinese shippers can pursue moderate price increases on in-shell and higher-value kernel grades, especially into destinations where recent shipment growth has been strongest (Turkey, MENA, Germany). Nonetheless, maintaining competitive pricing for India and price-sensitive Asian markets remains key to sustaining volume.
• Risk factors: Upside price risks stem from continued shipment strength, any late-season weather stress in California and stronger-than-expected demand in Turkey and the wider MENA region. Downside risks include macro-driven demand softness, particularly in Europe and India, or any sudden increase in aggressive discounting from alternative origins.

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

• FOB U.S. (export to Europe): Slightly firmer tone expected for in-shell and premium kernel grades as recent shipment data and higher offers are digested by the market.
• FOB China (Dalian): Prices seen broadly stable in EUR over the next three days, with a modest upward bias following recent domestic price strength but limited immediate change in quoted export levels.
• Delivered Europe (main hubs): Kernel prices likely to edge higher in line with increased American export quotations and steady demand from Western and Central Europe, while discounts for lower grades may narrow slightly.