Kernel movement holds up better than returns
Chile is shipping more walnut kernels, but earning less from them. Kernel export volume has increased against the corresponding stage of last season, while aggregate export revenue has fallen. Softer average realizations have more than offset the gain in tonnage.
In-shell business is different. Physical exports have declined, alongside lower revenue and weaker average returns. The pressure there comes from both fewer shipments and less revenue per unit exported.
For buyers, kernel movement points to continuing physical offtake, rather than a general withdrawal from Chilean walnuts.
Returns face competing supply
The historical comparison puts the softer returns in perspective. Compared with the same stage of the earlier season, average in-shell returns are slightly higher and kernel returns modestly lower. Last season’s stronger averages therefore explain part of the sharp year-on-year deterioration.
Across Chile’s wider nuts sector, movement and revenue are also lower than last season. Weaker average realizations account for most of the revenue decline, although total revenue remains above the earlier comparison season.
The separate January–July comparison shows walnut export revenue falling faster than physical shipments. Greater global supply, including higher United States production, contributed to that pressure despite sustained international demand.
The new Northern Hemisphere outlook has a different balance. Chinese and Ukrainian production gains are expected to offset smaller crops in the United States and European Union. Export availability is expected to follow those directions.
Buyers face a changing origin mix, not a uniform global contraction. For Chilean suppliers, continuing demand still leaves competition over which origin secures the business.
Destination business moves unevenly
Destination business has been uneven too. In the January–July year-on-year comparison, India and Brazil took more Chilean walnuts and generated higher export revenue. Business with Italy, Turkey, Spain and the Netherlands declined in both measures.
India’s shipment growth ran ahead of its revenue growth. Increased competition there helps explain why a busier shipping programme did not deliver an equivalent commercial gain. Brazil’s expansion provided another growing outlet alongside the weaker destinations.
Indian walnut consumption is expected to stay robust, supported by urban demand, health awareness and more everyday snacking. In-shell walnuts continue to attract demand through traditional markets and retail outlets.
Turkey’s coverage shapes buying
Turkish buyers appear well covered with walnuts from China, California and Chile. Existing inventories could delay replenishment even though consumer demand is steady and substantial imports are expected.
The intended use of those imports also changes the commercial picture. Alongside domestic distribution, Turkish traders bring walnuts in for processing, packing and onward export.
Qualifying processing and re-export business is exempt from import taxes under the Inward Processing Regime. Ordinary imports for domestic consumption sit outside that exemption.
For suppliers, slower replenishment need not mean weaker consumption, and domestic-market business carries different trade conditions from re-export orders.
Much of Chile’s crop is committed
Chile’s physical starting point is a smaller season crop after the previous high-volume harvest. Lower total supply helps explain the weaker overall export movement.
Most of the season’s crop is estimated to be committed. Shipment progress was projected to be well advanced, with some contracted deliveries still outstanding. Only a relatively small crop portion was estimated to remain uncommitted and available for sale. Much of suppliers’ remaining work is delivering committed business, so unshipped walnuts are not all freely available to buyers.
Separate product-form estimates describe a substantial kernel portion and a smaller in-shell portion still to be marketed.
Chile’s estimated ending stocks for the production marketing year that began this January are higher than in the previous year.
Market Reading
For buyers, Chilean kernels keep moving, but most of the crop is already committed and only a small part remains uncommitted. For suppliers, demand from India and Brazil is growing, while returns are softer and Turkish buyers are well covered. Shipment performance and commercial returns are telling different stories.