The UAE-Chile Trade Agreement & China’s Eco-Friendly Walnuts Are Reshaping the Market!
Introduction
The global walnut market is witnessing significant shifts driven by production challenges, export dynamics, and changing consumer demand. Key players such as Chile, the United States, China, and Hungary are navigating reduced harvests, fluctuating prices, and evolving trade agreements. This report provides a detailed analysis of production updates, export-import trends, pricing, and future market signals.
Latest Market Updates
Chile: Mixed Signals in Walnut Exports
- Shelled Walnuts: Exports rose by 6% in November 2024 compared to the same month in 2023, reaching 4,189 metric tons (mt). However, total exports dropped by 9%.
- Top Destinations: Spain (+7.6%), Germany (+13.6%), and the Netherlands (+10%) saw gains.
- Declines: Brazil (-42.2%) and Italy (-18.4%) experienced notable reductions.
- Inshell Walnuts: Exports in November dropped 11%, contributing to a 28% year-on-year decline.
- Key Markets: India (47% share) fell by 29%, and Turkey saw a sharp 55% drop.
- Bright Spots: Italy (+8%) and Europe (+14%) showed resilience.
Chile’s projected 170,000 mt crop in 2025 is expected to partially alleviate global supply shortages, particularly in markets like India, Turkey, and Asia.
United States: California’s Struggles
- Production Decline: The 2024 crop fell by 28–30%, with final yields estimated between 580,000–600,000 short tons, down from 824,000 tons in 2023.
- Key Issues: Adverse weather during pollination and economic challenges have led to walnut tree removals, shrinking cultivation areas.
- Inventory Levels: Gross inventories dropped by 30% to 448,600 tons in December 2024.
- Pricing Trends: Producer prices for the Chandler variety rose to $2.20/kg, reflecting tighter supplies.
Despite these setbacks, domestic demand remains robust, with a third of production consumed within the U.S.
China: Desert Innovations
China’s walnuts, primarily from Xinjiang, have gained international recognition for sustainable cultivation on desertified land. These practices improve local incomes and ecological conditions while bolstering China’s position as a significant walnut producer.
Hungary: Regional Dynamics
Hungary produces 7,000–10,000 tons of walnuts annually, with half of the production concentrated in Szabolcs-Szatmár-Bereg county. However, adverse weather and pests have affected yields, increasing reliance on imports from Romania, Ukraine, and Italy.
Global Production Status
Key Producers
- China: The world’s largest producer, with strong domestic consumption and limited export focus.
- United States: Despite challenges, California remains a critical player, contributing 30% of global production.
- Chile: A major exporter to Asia and Europe, focusing on high-quality kernels and inshell walnuts.
- Hungary: A smaller player in the European market, with fluctuating yields.
Harvest Times
- Chile: March–May, aligned with Southern Hemisphere seasons.
- United States (California): September–November.
- China: September–October.
- Hungary: September–October.
Product Quality and Market Trends
- Chilean Walnuts: Renowned for high kernel yield and light color, Chilean walnuts cater to premium markets.
- California Walnuts: Known for Chandler kernels, favored for export due to consistent quality.
- Chinese Walnuts: Emphasize sustainable and desert-based cultivation practices, appealing to eco-conscious buyers.
- Hungarian Walnuts: Local demand peaks during festive seasons, with quality influenced by weather variability.
Exporters and Importers
Leading Exporters
- Chile: Shelled and inshell walnuts, targeting Europe, India, and Turkey.
- United States: Dominates premium kernel markets globally.
- China: Focuses on regional exports and domestic supply.
Key Importers
- India: A major buyer of inshell walnuts, despite reduced shipments in 2024.
- European Union: Spain, Germany, and Italy lead imports, particularly from Chile.
- UAE: Benefits from a tariff-free agreement with Chile under the CEPA deal.
Pricing and Future Trends
- Current Prices:
- Chilean shelled walnuts: $2.20–2.50/kg, with inshell prices under pressure due to surplus stocks.
- California Chandler kernels: $2.20/kg, reflecting tight supplies.
- Forecasts for 2025:
- Prices are expected to stabilize or rise slightly as global inventories remain low.
- Strong demand from Europe, the Middle East, and Asia will sustain market activity.
Market Analysis and Signals
- Tight Supplies: Reduced production in California and Chile creates upward pressure on prices, particularly for premium kernels.
- Shifting Trade Patterns: The UAE-Chile CEPA agreement will enhance Chile’s competitiveness in the MENA region.
- Sustainability Appeal: China’s focus on eco-friendly production offers a model for other producers to explore niche markets.
- Resilient Demand: Festive seasons and health-conscious consumers are driving sustained demand globally.
Additional Updates
- Lithuania’s Growth: Lithuanian imports of Chilean inshell walnuts surged by 8,080%, reflecting growing interest in Eastern Europe.
- Morocco: A significant importer of Chilean inshell walnuts, despite a 25.8% decline in 2024.
- African Potential: Emerging markets in Africa, such as Nigeria, could become important players in the walnut trade.
- Pest Management: Innovations in pest control in Hungary and California may help stabilize future yields.
Conclusion
The global walnut market faces a delicate balance of reduced supply and sustained demand. With production challenges in California and Chile, coupled with growing export opportunities for countries like China and Hungary, the market is poised for dynamic changes in 2025. Staying attuned to pricing, trade agreements, and sustainable practices will be essential for stakeholders navigating this evolving landscape.
FAQ for the Global Walnut Market
1. What are the largest walnut-producing countries in the world?
- China leads as the world’s largest walnut producer, contributing approximately 30% of global production.
- United States (California) follows, producing around 30% of the world's walnuts, despite a production decline in 2024.
- Chile is a major exporter, known for its high-quality kernels and inshell walnuts.
2. Why is California’s walnut production declining?
- California faced a 28–30% production decline in 2024 due to adverse weather conditions affecting pollination and the removal of walnut orchards due to economic losses.
3. What are the current walnut prices in 2025?
- Chilean Shelled Walnuts: Priced at $2.20–2.50/kg.
- California Chandler Kernels: Stabilized at $2.20/kg.
- Prices are expected to remain firm or increase due to tight global inventories.
4. Which countries are the largest exporters of walnuts?
- United States (California): Dominates kernel exports globally.
- Chile: A leading supplier to Europe, Asia, and the Middle East.
- China: Focuses on domestic supply with limited regional exports.
5. Which countries import the most walnuts?
- India: A top importer of inshell walnuts, accounting for 47% of Chile’s inshell exports in 2024.
- European Union: Spain, Germany, and Italy are key buyers of premium kernels.
- UAE: Emerging as a significant market under the CEPA trade agreement with Chile.
6. What makes Chilean walnuts unique?
- Chilean walnuts are renowned for their light-colored kernels and high export quality, making them a preferred choice in premium markets.
7. How is China innovating in walnut production?
- China emphasizes eco-friendly cultivation on desertified land in regions like Xinjiang, contributing to sustainability and improving local incomes.
8. When is walnut harvest season globally?
- California: September–November.
- Chile: March–May.
- China and Hungary: September–October.
9. What are the key factors driving walnut prices in 2025?
- Reduced Production: Declines in California and Chile tighten supply.
- Strong Demand: Festive seasons and health-conscious consumers fuel demand.
- Trade Dynamics: Agreements like UAE-Chile CEPA boost regional trade.
10. What is the outlook for the global walnut market in 2025?
- Prices are expected to remain high due to limited global supply.
- Chile’s projected 170,000 mt crop and strong demand from India, Europe, and the MENA region will shape the market.
- Sustainable and premium-grade walnuts will see increased demand globally.
