California walnuts are shipped around the globe, and the Middle East is an important destination. "We ship a lot into Dubai," says Bill Carriere with Carriere Farms. Part of that volume stays in Dubai, but the region is also an important trading hub. "From Dubai, product gets redirected into nearby countries that we can't ship into directly, including Iran." Not only does Dubai hold a lot of traders, they are also very reliable. These traders honor their contracts and take a lot of risks away from California shippers, making it a very safe place to ship to.
Shipping costs
However, as a result of the war, shipments of California walnuts to the Middle East have come to a standstill. This involves shipments into the United Arab Emirates, but also into Iraq, Jordan, Israel, Lebanon, Quatar, Saudi Arabia, and Kuwait. "We ship directly into all these countries." As a result of the war, the Strait of Hormuz - a key shipping route – has been closed and the Middle East can't be reached. In addition to that, insurance companies have increased their premiums due to higher risks and the cost of fuel for ships will go up, following the expected spike in oil prices. These factors combined will significantly impact the overall cost of shipping.
Vessels that are currently still on the water will have to be rerouted, resulting in additional costs for offloading, port fees, etc. If containers get stuck in ports waiting for redirection or waiting for customers to pick them up, port demurrage charges to store stranded containers could be significant. Carriere Farms feels very fortunate not to have any containers of walnuts on the water. "Everything arrived before Saturday and has been paid for," Carriere shared.
© Carriere Farms
Carryover crop
Nevertheless, depending on the duration, the impact of the war could be significant. "We need this to be resolved quickly, before it becomes catastrophic," he said. The biggest concern is the fact that about 20 percent of the California walnut crop is still uncommitted. "With no shipments into the Middle East currently, the industry worries how much of the 2025/2026 crop will carry over into the new crop and at what price." In addition to California, Chile's season will be starting up soon and the country also sends quite a bit of volume into the Middle East.
With no imports coming into the Middle East, local markets on the other hand may see supply dry up, which could result in an increase in prices. "However, these are all speculations. The bottom line is that there are so many unknowns and we may not get answers to our questions for a while."
For more information:
Bill Carriere
Carriere Family Farms
Tel: (+1) 530-934-8200
[email protected]
www.carrierefarms.com
