Walnut Market Tightens as U.S. Shipments Surge and Stocks Decline

Demand for American walnuts has accelerated in the 2025–26 season, tightening stocks and putting a floor under prices despite a large 2024 crop. Stronger domestic use and improved export flows are absorbing the high carry-in, shifting market sentiment from oversupply to cautiously balanced. Higher retail, bakery and food-industry demand in the United States, together with firmer shipments to key European and Asian destinations, have lifted overall dispatches well above last season. While exports to India have slipped, gains into Germany, Italy and several Asian markets have offset this weakness. With California remaining the pivotal global supplier, upcoming crop expectations, kernel quality and end-of-season inventories will be decisive for price direction as the next harvest approaches.

Prices

Spot kernel offers indicate a steady to mildly firm tone. Chinese walnut kernel prices (FOB Dalian) are broadly stable, with light quarters around EUR 3.3/kg, light pieces at roughly EUR 2.85/kg and light amber pieces near EUR 2.30/kg. U.S. organic light halves offered ex-Europe are quoted near EUR 4.50/kg, while Indian organic light halves remain comparatively high around EUR 5.30/kg.

The absence of recent price declines alongside strong U.S. movement suggests downside is increasingly limited in the short term. However, with a sizeable 2024 California crop already harvested, any renewed softness in demand or aggressive pre-harvest selling could quickly cap rallies, particularly for lower grades and industrial pieces.

Supply & Demand

The 2025–26 marketing season opened with comparatively high carryover in California, but this buffer is being eroded by much stronger shipments. Total dispatches have reached about 364 million pounds so far, up from 329 million pounds in the same period a year earlier. Domestic movement rose to around 87 million pounds, supported by higher retail, bakery and food-processing demand, while export shipments also increased.

May shipments highlight the shift in momentum. California handlers moved roughly 12,862 tonnes in May versus 5,558 tonnes a year earlier, with domestic dispatches jumping from about 5,229 tonnes to 12,498 tonnes. Exports, while still modest in that month at around 364 tonnes, more than tripled year-on-year, underscoring the broad-based improvement in demand rather than a single-market spike.

Export performance is mixed by destination. Shipments to India fell about 15% to roughly 5 million pounds during the reported period, reflecting stronger competition and possibly higher local supplies. By contrast, exports to Germany, Italy and several Asian markets posted substantial growth, helping support international prices and diversify sales away from India’s increasingly price-sensitive demand.

Fundamentals

The stronger shipment performance is particularly noteworthy given the sizeable 2024 California crop, estimated at about 648,000 tonnes. Under normal conditions such a volume, combined with high carry-in, would weigh heavily on prices. Instead, robust domestic and overseas movement is gradually rebalancing the market, reducing burdensome stocks and improving handler cash flow.

End-season fundamentals will be driven by four main factors: final crop size confirmation, kernel quality, export demand into the new marketing year and residual inventories. Any quality issues or logistical bottlenecks could redirect demand toward alternative origins, but for now California remains competitive, especially in mid- to higher-grade kernels. With global consumers increasingly incorporating nuts into healthy-snacking and ingredient mixes, structural demand growth continues to underpin the market.

Forecast & Trading Outlook

Short term, the combination of strong U.S. usage and resilient exports points to a broadly supportive tone into the run-up to the next harvest. While absolute stock levels remain comfortable, the pace of drawdown reduces the risk of a sharp price correction. Market focus will increasingly shift to early assessments of the upcoming California crop, including bloom conditions, nut set and potential weather-related yield impacts.

Given the current balance, the market is more vulnerable to upward moves on any negative production news than to deep downside. However, buyers should remain mindful that high starting inventories can still cap rallies if demand softens or if competing nuts (notably almonds and pistachios) become more aggressively priced.

Trading recommendations

• Food manufacturers and bakers: Consider covering a portion of Q4 2026–Q1 2027 needs now while prices are stable and stocks are still comfortable, focusing on quality specifications rather than timing the absolute price low.
• Importers in Europe and Asia: Use current relative stability to diversify origin mix between California and China, taking advantage of competitive Chinese kernel prices while maintaining access to premium U.S. grades.
• Producers and handlers: Avoid aggressive discounting ahead of clearer visibility on the next crop; disciplined selling and attention to kernel quality will be key to sustaining the firmer market tone.

3-day directional outlook (EUR-based indications)