Walnut Market Tightens as US In‑Shell Exports Surge and Kernels Hold Firm

US walnut in-shell exports are surging at the start of the 2026 season, led by Turkey and MENA, tightening old-crop availability even as global kernel supplies remain comfortable. Kernel prices across China, India and the US in early July are broadly stable in EUR terms, with only a slight firming risk for higher grades. The walnut market is entering Q3 with a clear split between a rapidly tightening in-shell segment and a more balanced kernels complex. Export momentum from California is exceptionally strong: in-shell shipments are up 114% year-on-year, driven by Turkey, Middle East and North Africa, while kernel exports have grown at a steadier pace. At the same time, reported FOB prices for Chinese, Indian and US kernels have been broadly unchanged since late June, suggesting that large global inventories and good 2025 crops are still capping upside, even as buyers start to extend coverage for the new marketing year.

Prices

Spot kernel offers show a stable to slightly firmer tone versus mid-June, particularly for higher-value grades and origins. Chinese light pieces and amber pieces have held flat over the last three weeks, while Chinese light quarters saw a modest step up earlier in the period and then stabilized.

These values align with broader market commentary that early-July FOB walnut kernel prices in China, India and the US are steady, with buyers mostly covered for nearby needs and testing Chinese offers against higher-priced Indian and US kernels.

Supply & Demand

US supply is being absorbed at a fast clip via exports. In-shell walnut shipments from California have increased by 114% year-on-year, with exports acting as the primary driver of this growth. Turkey stands out as the leading incremental buyer, with imports of US in-shell walnuts rising nearly five-fold, while demand has also strengthened across the wider Middle East and North Africa, including the UAE, Algeria, Lebanon, Iraq and Morocco.

Kernel shipments show more moderate but still constructive growth. Total kernel exports are up 18% year-on-year, within an overall kernel shipment increase of 11%. Europe remains the key outlet for US kernels, led by Germany, Spain, the Netherlands, the UK and Italy, and supported by additional volumes into Japan. By contrast, Indian imports of US walnuts have fallen by about 10% in the reporting period, and South Korea has trimmed buying slightly, underscoring a rotation in regional demand from parts of Asia toward Turkey, Europe and MENA.

Despite the softer Indian pull, the overall export picture for US walnuts is clearly bullish for in-shell fundamentals. Season-to-date data indicate total walnut shipments from California are up nearly 24% on an in-shell-equivalent basis through May, confirming that the strong early-season pace is not a short-lived spike.

Fundamentals & Policy Drivers

Export-led tightening in California coincides with comfortable global inventories after large 2025 crops. Market reports suggest that around 85% of the 2025 California crop is already sold or committed, with in-shell exports alone up more than 110% year-on-year by end-April. This high sold-through ratio helps explain why in-shell offers feel firm even though headline crop size was substantial.

On the demand side, policy developments are adding medium-term upside for US origins. From July 1, a new EU tariff regime introduced a large tariff-rate quota for US tree nuts, including walnuts, granting zero-duty access up to 500,000 tonnes. This enhances the competitiveness of California walnuts in a region that already accounts for roughly 30% of global nut imports, reinforcing Europe’s role as the anchor market for kernel exports.

Meanwhile, India’s 100% import duty on walnuts remains a structural brake on US shipments, keeping India more reliant on domestic production and alternative origins. Together with the 10% observed decline in imports of US walnuts during the current reporting period, this highlights that India is no longer the primary growth engine for US walnut exports in 2026; instead, Turkey and MENA have taken that role.

Weather & Crop Outlook

Weather in California and key Asian origins (China, India) is being closely monitored but has not yet produced a fresh supply shock. Recent assessments indicate that, as of early July, no major adverse events have emerged to materially alter expectations for the 2026/27 crop, although heat spells or late-season storms could still affect yield and quality in the coming weeks.

Earlier in the season, California’s 2025 harvest slightly outperformed initial estimates and delivered a good proportion of large-sized kernels with generally solid quality. Combined with strong export demand, the main uncertainty now is less about available volume and more about how quickly remaining old-crop stocks will clear and what risk premium weather will add to new-crop offers as Q3 progresses.

Trading Outlook

• In-shell buyers (Turkey, MENA, EU): Consider advancing coverage for Q3–Q4 while US in-shell availability is still manageable. The 114% year-on-year surge in in-shell exports implies that old-crop stocks could tighten earlier than usual, particularly for preferred calibres.
• Kernel buyers (roasters, confectionery, packers): With Chinese, Indian and US kernel prices broadly stable and global inventories comfortable, short-term purchasing can remain tactical. However, for premium grades (light quarters and halves, organic), a modest firming bias argues for layering in some additional coverage into late Q3.
• Producers and sellers: Strong export momentum into Turkey, Europe and MENA supports a firmer stance on in-shell offers, but kernels may still need competitive pricing to move volume in slower destinations such as India and South Korea.

3‑Day Price Indication

• FOB China kernels (Dalian): Prices for pieces, broken and quarters are expected to remain in a narrow range around current levels (≈2.3–3.3 EUR/kg), with a slight upside bias for quarters and cleaner lots.
• FOB India organic halves (New Delhi): Premiums over Chinese kernels should persist near 5.3 EUR/kg, with minimal short-term movement while domestic demand absorbs supplies.
• FOB US organic halves (Europe hub, London): Values around 4.5 EUR/kg are likely to hold, supported by strong EU demand and improved tariff access, but capped by abundant global supply.