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Chilean walnuts affected by rise in Indian tariffs
ChileNut is annoyed and surprised about the unilateral change in the rules of the game and international trade established by India, especially given the fact that just a few weeks ago, Raju Bathia, Ambassador for India of the INC (International Nuts and Dried Fruits Council), said that "India has a great stomach, capable of consuming all the nuts that Chile is able to produce," since it has a large population, with an emerging middle class, and eating habits that are highly compatible with the quality of Chilean nuts.
But in just a few days, this all came to nothing. After the rise in the tariffs imposed by the United States on products like aluminium and steel, India replied with increases to walnuts, almonds and other nuts. Walnuts were the most affected, with tariffs going from 30% to 100%.
"India has changed the rules of the game, surprisingly and unilaterally, and this is already having an impact on our nut exports to that country," said Nicolás Di Cosmo, president of ChileNut.
He adds that "although India says that this is not the case, we perceive it as a clear protectionist measure, and Chile is one of the most affected parties. Chilean nuts are exported from April to September; that is, we are the ones suffering this unfair increase, while Californian walnuts start being shipped in October. Everything points to the measure having been adopted in order to put pressure on the United States."
Consequently, the goal to export around 15 thousand tonnes to that country, tripling the figures of 2017, will be difficult to achieve. Such figures would have turned India into the second most important market for shelled walnuts, accounting for 15% of Chile's exports.
"Of the 15,000 tonnes expected for 2018, about 5 thousand tonnes are already sold under contracts, and half of those are on ships bound to India. Those shipments departed from Chile with one tariff and will arrive to India with another, which is an obvious change in the rules of the game," adds the executive.
In order to address this, ChileNut has held a meeting with the Ministry of Agriculture, the Directorate General of International Economic Relations (Direcon) and Indian importers to find a way out of this conflict, which is significantly affecting Chilean exports. "We know that the Chilean authorities are committed to solving this issue, looking for a way out," adds Nicolás Di Cosmo.
The annual consumption of walnuts in India amounts to 50 thousand tonnes and the market records 30% growth per year. Between July and September, it is a strategic moment for Chile to supply India with walnuts, as it coincides with the festival season, during which 50% of the food consumed consists of nuts.
Walnuts are the third most exported product to India from Chile, and the South American country plans to increase its production from 125,000 to 200,000 tonnes within 4 years.
Chile has been paving the ground for the marketing of larger production volumes, keeping in mind that more than 95% of the production is exported. Chile has been strongly involved in markets such as the Middle East, Europe and Latin America, and over the last 5 years, the focus has been on Asia, where markets such as Korea, China and India have been opened.
However, Di Cosmo adds that there is no longer time to make changes in the destinations of a large amount of Chilean walnuts (considered in some circles as the best in the world), so they trust in the Chilean authorities' capacity to find solutions.
Publication date: 6/20/2018
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