Chilean walnut industry growing rapidly
“We have increasing production every year,” said Andrés Rodriguez, Executive President of the Chilean Walnut Commission. He noted that Chile currently produces about 40,000 MT of walnuts per year, but that figure will likely rise to 60,000 MT in the next three years. Rodriguez credits new plantings as the major reason for the increase, and those plantings have been driven by the good conditions to grow walnuts and the profitability that Chilean walnuts can garner.
“You have the case where some growers have moved from dried fruit and other nuts to walnuts because they're looking for a profitable crop,” said Rodriguez. “And today, walnuts are one of the most profitable crops in Chile.” One of the reasons is the quality coming from Chile is so high, because taste and quality are valued highly, there is willingness to buy Chilean walnuts.
“Chilean product has also a better color,” explained Rodriguez. “The walnuts here have a lighter and brighter color, and that makes for a very attractive product.” The flavor profile also has very little bitterness, and that, along with good oil content, which enhances flavor and shelf life, makes for a premium product.
“We have good growing conditions,” added Rodriguez. “The weather, the soil and the natural conditions all contribute to quality, but Chile is also known for the high standards in processing.” There’s still an important percentage of the walnuts which are cracked by hand, and that extra attention, though labor-intensive, can bring good prices for growers. The hand cracked walnut is a niche market that will continue being very important for Chile, but with the coming volumes the machine cracking is a must, that will also compete internationally with high quality differentiation based on the natural advantages of Chilean walnuts.
The danger with such rapid expansion, however, is that a market with more of a premium product, no matter how high in quality, could suffer a downturn in price. But Rodriguez thinks that, the market will remain strong.
“We have a very open economy, and we have free trade agreements with many countries, so we're very competitive with other countries,” he said. That advantage helps keep profit margins robust for growers, and a steady demand also helps our product.
“We're not expecting such a huge increase in world demand,” admitted Rodriguez. “But we also don't see other countries increasing their production as much as Chile. So while you have countries that are growing in production, you also have China, which is the largest producer of walnuts, but which has so much consumption that they actually have to import walnuts to keep up with demand.” That promising international demand has justified, in the eyes of many growers, the investment necessary to bring new plantings to fruit.
It takes four years for a new orchard to come into production, noted Rodriguez. So for Chilean walnut growers to continually expand the way they've been doing, they must sense a good future ahead.
“We have a stable and reliable production because there’s ideal weather for growing walnuts, so we don’t have abrupt ups and downs,” he said. If we have an increasing production it is because we have new orchards becoming productive.”
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