Walnuts: US Export Surge Tightens Global Kernel Market

Robust export demand has pushed US in-shell walnut shipments to more than twice last season’s level, tightening global availability and underpinning firm kernel prices. Strong buying from Turkey, the Middle East, Africa and Europe, combined with higher Chinese kernel prices, is enhancing the competitiveness of Californian walnuts and limiting downside for international quotations. Demand for US in-shell and kernel walnuts is broad-based across key destinations, with particularly strong growth into Turkey, MENA and several emerging markets. Europe remains the anchor market for kernels, while Asia-Pacific demand is more mixed but still positive overall. Against this backdrop, latest offers show a modest uptrend for Chinese kernels and stable-to-firm levels for premium US and Indian organic product, suggesting a constructive price environment heading into the next marketing period.

Prices

FOB offers in early August point to a gently rising walnut kernel market in euro terms. Chinese conventional kernels from Dalian recorded small week-on-week gains, while US and Indian organic light halves held at relatively elevated levels, reflecting steady demand for higher-quality product.

Supply & Demand

US in-shell walnut shipments have expanded sharply this season, driven by exports. According to industry data, May in-shell shipments rose to 12,862 pounds, more than double the 5,558 pounds recorded a year earlier. Export volumes jumped to 12,498 pounds versus 5,229 pounds, while domestic movement increased by 11% to 364 pounds.

Cumulative in-shell shipments since the start of the season have approached 300 million pounds, more than twice the previous year’s level. Exports are up by 114%, while domestic shipments have risen by 47%. This marked acceleration underscores persistent international demand and is gradually reducing the heavy carryover that has weighed on prices in recent years.

Turkey has emerged as a key growth engine, with US in-shell shipments rising nearly fivefold, supported by strong consumption and regional re-export activity. Exports to the Middle East and Africa surged by 395% to 183 million pounds (from 37 million), with significant gains into the UAE, Algeria, Lebanon, Iraq and Morocco, highlighting robust demand across a wide geographical base.

The Asia-Pacific region shows a more nuanced picture: total shipments increased by 5% to 37 million pounds despite a 10% decline in exports to India. Vietnam recorded an 88% jump, while North American shipments advanced by 44% to 15.8 million pounds, confirming that demand recovery is not confined to a single region.

Fundamentals

Kernel demand is also strengthening. May kernel shipments reached 39.27 million pounds, up 23% from 31.82 million pounds a year earlier. Export kernel shipments increased by 41%, while domestic offtake showed only marginal growth, underlining the central role of international buyers in clearing the crop.

Europe remains the principal destination for US kernels. Shipments to Spain rose to 168.9 million pounds from 136.6 million pounds, and Germany posted growth of 32%. The Middle East and Africa recorded a 76% increase in kernel imports, mirroring the strong in-shell flows and confirming the region as a structural demand driver.

At the same time, rising Chinese kernel prices have improved the relative competitiveness of Californian walnuts in many overseas markets. With Chinese FOB offers edging higher, buyers looking for value and reliable supply are increasingly turning to US origin, particularly for standard grades. This is providing a floor under US export prices even as global nut markets remain sensitive to macroeconomic and currency headwinds.

Outlook & Trading Strategy

Firm export demand, especially from Turkey, MENA and Europe, suggests the US walnut market is gradually rebalancing from surplus toward a more neutral or mildly tight position. While regional demand disparities persist, the breadth of import growth across emerging markets and the support from higher Chinese prices point to continued price resilience into the next quarter.

• Buyers (roasters, packers): Consider securing forward coverage on standard kernel grades from US and CN origins while prices are only modestly above recent lows, prioritising quality and logistics reliability.
• Importers in MENA and Turkey: Given strong regional demand and high shipment growth, avoid over-reliance on spot buying; stagger purchases to reduce exposure to potential price spikes if US availability tightens.
• Producers and handlers: With exports rapidly absorbing stocks, maintain price discipline on premium and organic grades; focus on destination mix optimisation toward markets showing the strongest volume and margin growth.

Short-Term Price Indication (Next 3 Days)

• Chinese kernels, FOB Dalian: Slightly upward bias in EUR terms on steady export interest and higher domestic replacement costs.
• US kernels, FOB Europe (London): Stable to firm, supported by strong shipment data and competitive positioning versus Chinese origin.
• Indian kernels, FOB New Delhi: Firm at a premium to other origins, with limited downside given niche positioning and resilient regional demand.