The USDA has released a report on the Chinese imports of U.S. tree nuts. You can find a link to the full report below the article.
Walnuts
China’s in-shell walnut production is forecast at 850,000 metric tons (MT) in marketing year (MY) 2018/19 (September-August), a decrease of 15 percent from the previous year. Yunnan, the country’s largest walnut producing province, is recovering from frost damage in MY 2017/18. A heavy snowstorm that struck northern China in early April caused widespread damage among the walnut crops in the major producing provinces of Shanxi, Shaanxi, Henan, Hebei, and Gansu. As a result, walnut production in these provinces is likely to fall by 30-80 percent from the previous year. The walnut sizes are generally large and fruit are quite full in snow-hit regions. Walnut production in Xinjiang Uygur Autonomous Region (Xinjiang), the second largest walnut producer in China and located much further to the West, is expected to remain unchanged from last year.
Walnut acreage is estimated at 300,000 hectares in MY 2018/19. Although the total crop area is still expanding in Xinjiang and Yunnan, the rate of expansion in those provinces has slowed down. Walnut production is scattered across more than 20 provinces and over 50 percent of walnut acreage is on hills and mountains, so the average yield is quite low at 2.3 MT per hectare. As the world’s leading walnut producer, China’s walnut production is expected to see continued moderate increases in the foreseeable future as new plantings begin to bear. Although numerous walnut varieties exist in China, very few compete with popular varieties such as Chandler, Serr, and Hartley which feature a light-colored kernel without a bitter taste.
Almonds
China’s almond production (shelled basis) is forecast at 43,000 MT in MY 2018/19 (August-July), unchanged from the previous year, according to sources in Xinjiang Uygur Autonomous Region. Almond acreage is currently estimated at around 63,000 hectares and the production base is stable. More than 95 percent of the country’s almond plantings are situated in Shache County of Xinjiang. Chinese almond production also suffers from low yields. Too many varieties are grown in Xinjiang and most orchards lack proper management and inputs. Industry sources indicate that it is difficult to source large quantities of almonds with uniform variety and quality. Almost all locally-produced almonds are consumed in Xinjiang with a very limited amount being exported to neighboring Central Asian countries.
Prices
Farm gate prices for in-shell walnuts vary from location to location, especially in MY 2018/19. In Yunnan province where walnut production is expected to recover from a year ago, farm gate prices (inshell basis) were quoted at RMB18 ($2.65) per kilo at the beginning of MY 2018/19. This was nearly a 20 percent decrease from the same period last year, according to Yunnan traders. Meanwhile, in Shanxi province where walnut production is estimated to decrease by 70-80 percent from the previous year, farm gate prices (in-shell basis) were reported at RMB36 ($5.3) per kilo at the beginning of this marketing year. This was an increase of more than 40 percent year-on-year, according to media reports.
Farm gate prices for best quality (thin shell) in-shell almonds are quoted at RMB35 ($5.15) per kilo, up 16 percent from the previous year, according to Xinjiang sources. Lower quality almonds are sold at RMB25-32 ($3.68-4.70) per kilo at farms. Hazelnut farm gate prices (in-shell basis) are placed at around RMB25 ($3.68) per kilo, according to industry sources.
Imports
Because China has enacted a number of additional tariffs on U.S. products, Chinese importers will be less likely to purchase certain tree nuts from the United States. The market share once occupied by the United States will be difficult to fill by other competitors due to limited substitutable suppliers. Further exacerbating the problem, China recently tightened control over imports transshipped through border programs. As a result, Chinese buyers are looking for other import sources and will probably increase purchases of alternative nuts, such as cashews and Brazil nuts.
In spite of increased world pistachio supplies as a result of a rebound in U.S. production, China’s pistachio imports (in-shell basis) are expected to decline during MY 2018/19 (September-August), largely because of fewer purchases from its largest supplier, the United States. Chinese importers are seeking substitute supplies from other producers such as Iran, the second largest pistachio supplier to China, but a sharp production decrease in Iran will likely limit it as an effective substitute exporter in 2018/19. Other producers, including Turkey and Syria, have no direct access to the China market. Pistachios were China’s number one imported tree nut in 2017, according to a report by INC.
Although China’s imports of almonds, shelled products in particular, have been on the rise over the past few years, import volume is projected to fall sharply during MY 2018/19 (August-July) due to the increased tariffs on U.S. nut products. Currently, more than 95 percent of China’s almond imports come from the United States. Although Australia also exports almonds to China, its exportable supplies are far from enough to satisfy the China market. China and Hong Kong together consumed around 7 percent of the world’s almonds in 2017, according to a U.S. industry report.
China’s walnut imports are expected to further decline in MY 2018/19 (September-August) from the previous year, partially because of increased tariffs on products from the United States, which in the past has been China’s single largest walnut supplier. Although Chinese importers are searching for substitute products from Chile and Australia, their available supplies can hardly fill the gap. On the other hand, China’s overall imports of walnuts, especially in-shell products, have been falling from its peak in 2012, mainly because of rapid increases in domestic production.
Exports
China’s exports of walnuts are estimated to drop in MY 2018/19 as result of reduced domestic production. China has been a historical export supplier of walnuts over the last century. Over the past decade or so, China has nearly faded out as a supplier to the world market due to strong domestic demand. Nevertheless, China’s walnut exports rebounded significantly in MY 2017/18 as a result of sharp increases in production. China exports mainly shelled walnuts to Europe, Japan, and Kyrgyzstan. Exports of in-shell walnuts also picked up dramatically last year to neighboring countries, including Pakistan and Kyrgyzstan.
China imports in-shell pistachios and almonds for processing and re-export (in-shell pistachios and shelled almonds) to the U.S. and EU markets, but the volume is limited and declining. Likewise, China imports in-shell macadamia nuts and re-exports kernels mainly to Australia and the volume remains quite stable.
For the full report, click here.