The Mintec Benchmark Prices (MBP) for Chandler 80% walnuts FAS US fell 20 cents/lbs in September, taking the benchmark down to USD 2.45/lbs in the closing week of September 2022. Prices have fallen significantly compared to the same period last year.
The price drop is attributed to ample supply in California, together with subdued global demand. California is projected to produce 720,000 (short) tons of walnuts in 2022/23, according to the USDA, a decrease of 1% from the previous campaign, but the third consecutive year when the output is anticipated to climb above 700,000 tons. During the past ten years, California has produced on average 656,000 tons of walnuts, with the 2020/21 harvest having been a record 790,000 tons.
Global demand for walnuts has been subdued, with the strong USD not helping. California shipped 255.7m lbs of inshell walnuts in the 2021/22 marketing year (Sep-Aug), a decrease of 111m lbs (-31%) compared to the previous campaign, due to a huge drop in shipments to the Middle East and Africa, California’s key markets for inshell walnuts. In the kernel market (shelled walnuts), the drop in shipments has been less significant, with 495m lbs of shelled product in 2021/22 having been shipped from California, 2% less than the previous campaign.
Interestingly, kernel exports to the EU rose by 20% y-o-y, to 148m lbs, but this has been offset by demand contraction in other key markets, including the domestic US market, Canada, the UK and the Middle East.
Weak demand from the bakery segment has been one of the key factors impacting the walnut demand. As prices have eased, many buyers have adopted a wait-and-see attitude, expecting to re-engage with the market once prices ease further.