Walnut Market Tightens as US In‑Shell Exports Surge, Kernels Hold Steady

US in-shell walnut shipments have more than doubled this season, driven by booming demand from Turkey and the wider Middle East & Africa, tightening availability for remaining old-crop stocks. Kernel shipments are growing more moderately, and benchmark kernel prices in China and Europe are holding broadly steady to slightly firmer. The walnut market is transitioning from oversupply toward a more balanced stance. According to the latest California data, season-to-date in-shell exports are up 114% and total in-shell shipments are running more than twice last year’s level, with Turkey, the Middle East and North Africa absorbing a large share of the volume. Kernel exports are also higher, but growth is more measured, leaving comfortable kernel inventories in several destinations. Price indications for Chinese and Californian kernels in EUR show a stable sideways pattern in July, suggesting that buyers still have leverage in kernels, even as in-shell sentiment firms.

Prices

Spot indications for walnut kernels in Europe and Asia remain largely stable. Chinese light quarter kernels FOB Dalian are around EUR 3.3/kg, with light pieces at about EUR 2.85/kg and light amber pieces near EUR 2.30/kg. Organic light halves from the US and India continue to command a premium, trading roughly in the EUR 4.50–5.30/kg range FOB in key hubs such as London and New Delhi.

Compared with early July, these kernel price benchmarks have been flat, underscoring a sideways market despite stronger shipment data. The firming tone is more pronounced on the in-shell side, where aggressive export buying from Turkey and MENA has tightened nearby availability and reduced discount offers for remaining US old-crop in-shell.

Supply & Demand

US in-shell walnut shipments have expanded sharply this season, approaching 300 million pounds as overseas demand strengthened across key destinations. In May alone, in-shell shipments reached 12.862 million pounds, more than double the 5.558 million pounds shipped a year earlier. Exports were the main driver, jumping to 12.498 million pounds versus 5.229 million pounds, while domestic in-shell movement rose by a solid 11%.

Season-to-date in-shell shipments are now more than two times last year’s level. Export growth of 114% highlights how international markets are rebalancing the previous surplus. Turkey has emerged as a leading buyer with nearly fivefold growth, while shipments to the Middle East and Africa surged by 395%, from 37 million pounds to 183 million pounds, supported by robust demand in the UAE, Algeria, Lebanon, Iraq and Morocco.

Regional developments are uneven. European in-shell arrivals slipped 5% to 53.1 million pounds, reflecting weaker demand in Spain (down 13%) and India (down 10%). By contrast, Asia-Pacific exports edged 5% higher to 37 million pounds, with Vietnam up 88%, and North American cross-border flows increased 44% to 15.8 million pounds. This shift in trade flows confirms that Turkey and the wider MENA region are now the key incremental demand engines for US in-shell walnuts.

Fundamentals

Walnut kernel shipments are growing at a steadier pace than in-shell. In May, kernel shipments reached 39.267 million pounds, up 23% from 31.815 million pounds last year. Export kernel shipments increased by 41%, while domestic kernel movement rose by only 2%, signaling that export channels are absorbing most of the incremental supply.

Season-to-date, kernel exports are running 18% above last year, underpinned by a 24% increase in shipments to Europe and a 76% jump into the Middle East and Africa. This reinforces the picture of strong demand from MENA not only for in-shell but also for kernels. At the same time, the more modest growth versus in-shell and reports of remaining kernel inventories in some markets point to a still-comfortable kernel balance, helping cap upside price momentum for now.

From a global perspective, current indications suggest that most Californian in-shell has been successfully placed as the new season approaches, while kernel stocks remain adequate. Export price benchmarks for US in-shell walnuts have firmed versus their lows earlier in the crop year, but do not yet signal a severe shortage. Market sentiment is gradually shifting from defensive to cautiously constructive, with the focus moving to how large the coming 2026/27 crop will be and whether demand in slower markets like India can recover.

Weather & Crop Outlook

Recent commentary around California tree nuts points to generally favorable growing conditions for walnuts, with no major, acute weather shocks reported in the last weeks. This supports expectations for a relatively large 2026 harvest, which could reintroduce downward pressure if demand growth does not keep pace. Growers remain concerned that a big crop on top of only gradually improving demand may cap any sustained rally.

In key competing origins such as China and Chile, no fresh weather-driven supply disruptions have been reported in the last few days that would quickly tighten global supply. As a result, current fundamentals are dominated more by strong export execution and regional demand patterns than by immediate crop stress.

Trading Outlook

• In-shell sellers (US origin): Strong export pull from Turkey and MENA justifies a firmer pricing stance on remaining old-crop in-shell. Consider limiting forward discounts and focusing on nearby shipments into deficit regions.
• Kernel sellers: With kernel inventories still comfortable and prices broadly stable, competitiveness remains important, especially into softer destinations like parts of Europe and South Asia. Structured offers (volume-based discounts, mixed-grade programs) may help clear remaining stocks.
• Buyers and industrial users: The current window of stable kernel prices offers an opportunity to extend cover for the next 2–3 months, particularly for preferred grades from China and California. However, avoid overcommitting far forward until clearer information on 2026/27 crop size and quality emerges.

3-Day Regional Price Indication (Directional)