Walnut Market Tightens as US In‑Shell Exports Surge to MENA and Asia

US in-shell walnut shipments are running at more than double last season, led by explosive demand from Turkey, the wider Middle East, Africa and selected Asian buyers, tightening old-crop supply and underpinning prices. Kernel trade is growing more moderately but still firm, with higher export quotations to Europe and steady Chinese demand starting to support a gradual price floor. Strong international buying has shifted the market narrative from surplus management toward balancing tight old-crop inventories with the approaching new harvest. Elevated export flows into Turkey, MENA and parts of Asia are rapidly drawing down stocks, even as Europe and India show softer off-take. Against a backdrop of hot, dry weather in California’s Central Valley and broadly steady terminal-market prices, participants are recalibrating coverage strategies, with less downside seen for key kernel grades compared with previous oversupplied seasons.

Prices

Robust international demand is translating into firmer export pricing for US kernels, particularly into Europe, where indicative offers have risen by roughly USD 70–160 per tonne in the latest week. At the same time, US wholesale walnut prices at terminal markets remain broadly steady, with recent indications around USD 76–106 per package depending on grade and market, suggesting that most of the price adjustment is occurring at the export and contract level rather than on domestic spot floors.

Chinese kernel prices are also reportedly supported by strong international buying, helping to stabilize global kernel values despite still-abundant supply from multiple origins. On the competing-origin side, recent FOB indications for Chinese walnut kernels converted into euros show a broadly flat pattern through August, with light halves around EUR 4.15/kg FOB equivalent and industrial grades mostly between EUR 2.15–3.65/kg, reinforcing the view of a consolidating rather than strongly bullish price environment.

(Prices converted from USD offers using an approximate rate of 1.08 USD/EUR; all values indicative.)

Supply & Demand

US in-shell walnut shipments have surged this season, with May in-shell exports reaching 12,498 pounds versus 5,229 pounds a year earlier, and total in-shell shipments for the month more than doubling to 12,862 pounds. Season-to-date, cumulative in-shell shipments are approaching 300 million pounds, more than twice last year’s level, underlining how aggressively inventories are being drawn down.

Export growth is heavily concentrated in Turkey and the wider Middle East and Africa. Shipments to these regions jumped 395% to 183 million pounds from 37 million pounds, with Turkey alone emerging as a key outlet alongside strong gains in the UAE, Algeria, Lebanon, Iraq and Morocco. Asia-Pacific shipments are up a more modest 5% to 37 million pounds, with Vietnam rising 88% and North America up 44% to 15.8 million pounds, while India is down 10% and Europe has slipped 5% to 53.1 million pounds, including a 13% decline to Spain partially offset by a 15% rise to Italy.

Kernel shipments are expanding at a steadier pace: May kernel exports grew 41% year on year, lifting total kernel shipments by 23% for the month to 39,267 pounds. Europe remains the primary kernel destination, absorbing about 168.9 million pounds so far this season, supported by increased snack and ingredient demand even as some buyers remain price-sensitive. Recent industry data also underscore that cumulative California walnut shipments have outpaced the 2025/26 crop size, further eroding the carryover that previously weighed on the market.

Weather & Crop Outlook

Late August weather in California’s main walnut-growing areas is hot and predominantly dry, with daytime highs frequently in the mid‑30s to low‑40s °C (mid‑90s to low‑100s °F). Long-range regional forecasts point to a hotter and drier-than-normal summer overall, with particularly warm conditions in mid to late August.

For orchards, these conditions are broadly supportive of kernel fill and hull split, provided irrigation is adequate and heat stress is managed. However, prolonged heat increases the need for careful water scheduling and pest management to avoid quality losses. With old-crop inventories already tightening due to strong exports, any late-season weather issues around harvest could quickly translate into a firmer tone for both in-shell and kernel markets.

Fundamentals & Market Structure

The current season’s exceptional export pace reflects both improved logistics and deliberate efforts by US handlers to move product after several years of burdensome stocks. The sharp rise in in-shell shipments versus the more moderate kernel growth indicates that many buyers in price-sensitive markets are preferring in-shell product, particularly in Turkey, MENA and some Asian destinations, where cracking and processing can be done locally at lower cost.

At the same time, kernel demand remains solid in Europe and China, underpinning premiums for key grades used in bakery, confectionery and retail snack mixes. The shift in trade flows—away from India and, to some extent, from parts of Europe—suggests a structural rebalancing of US walnut export destinations, which could have lasting implications for freight patterns, container availability and regional price benchmarks over the next marketing year.

Trading Outlook (Next 4–6 Weeks)

• Buyers (roasters, snack & bakery, packers): Consider extending coverage modestly into early new-crop for preferred US kernel grades, especially for European and MENA programs, as reduced carryover limits downside versus the last two seasons. Maintain flexibility to switch between US and Chinese origin for industrial pieces where price spreads justify.
• Importers in Turkey, MENA and Vietnam: Given the exceptionally strong shipment pace into your regions, avoid running inventories too tight ahead of harvest; any logistics bottlenecks or weather-related delays could trigger short-term price spikes in in-shell supplies.
• European buyers: With shipments to Europe slightly lower year on year but kernel exports still firm, look to cover core needs on price dips rather than waiting for a repeat of past oversupply-driven lows; focus on quality and specification, where differentials may widen if heat affects new-crop sizing or color.
• Producers and handlers: Use the current export momentum to lock in forward sales for both in-shell and high-demand kernel grades, but remain cautious about overcommitting before clearer visibility on new-crop yields and quality emerges in September–October.

3-Day Directional Outlook (EUR-based)

• US-origin kernels, Europe (CIF basis, EUR-equivalent): Sideways to slightly firmer as buyers digest higher offers and tight old-crop availability; limited downside seen near term.
• Chinese kernels, FOB Dalian (EUR/kg): Largely stable around current levels for light halves and pieces, with only marginal moves expected absent new macro or FX shocks.
• In-shell walnuts, export from US (EUR/tonne): Mild upward bias given strong MENA/Turkey demand and hot weather heading into harvest, but major gains likely capped until new-crop size and quality are confirmed.