WALNUT MARKET UPDATE
The December shipment report was released this week with very strong results. Overall shipments for December were up an impressive 22.5% at 87,029 tons. Total YTD shipments are now up 14.6% at 336,349 tons compared to 293,497 tons at this time last year. In short, shipments exceeded most expectations, with the Middle East and Asia making up for nearly all of the increase. India, again, deserves recognition as they continue to show their capacity for consumption. The report also showed an additional 6,000 tons of crop receipts bringing the total to 764,649 tons. This indicates the final crop coming in below the projected 780,000 ton estimate, barring any major surprises such as in 2017 when 10,000 tons were accounted for on the February report. With the exception of 2017, usually there are a minuscule 2-3k tons accounted for after December. The industry can now start envisioning a clearer picture of how it might look as it heads into an imperative few months.
It is surprising how strong the industry has performed considering Europe shipments are down more than 10% compared to last year. As we mentioned last month, the lackluster shipments can likely be attributed to a number of things; strong shipments / carry-in from the previous crop, lost of market share (China and Europe), and of course Covid. Time will tell if tonnage can be made up in the later months of the marketing year.
There has been a healthy amount of demand to start the year and new business continues to keep pace. Good quality chandler material is increasingly difficult to find, especially 80% halves. Even with the crop size at record levels there is limited supply. Most packers seem to have their eye on non-chandler business or anything with lower quality.
There is a long way to go as we are only a third through the marketing year, however an increase of 7-8k tons per month for the remaining shipment months would result in a very successful marketing campaign. Time will tell if the Middle East and Asia continue to perform well and if Europe will make a rebound.