After several months without serious rainfall, did the first showers since summertime arrive in Eastern-Europe this week. It is expected – and hoped for – that these rains will provide a last boost to the trees which they need to crack the green husk and get the nuts ready for collection. Packers hope that this scenario will lead to receipts of the first decent quantities of raw material in the course of next week, giving more clarity on the actual size and quality of this season’s crop in Eastern Europe. Given the late start of the collection this year, the capacity for deliveries up to the end of November is expected to be less then normal. As such, it can be advised to check on actual delivery possibilities in case of any traditional (Christmas) nearby needs.
In the meantime spot pricing for walnuts in the EU, which is mostly US origin at the moment, went up rapidly during the second half of September. While most people saw prices from California falling week by week during the last months, did most people not feel the need to stock up, leading to low inventory available at the moment. With still some weeks ahead before the first vessels of new crop will arrive in Europe, is a relief very unlikely to be seen on the spot market. Pricing for new crop shipments itself is still a bit blurred. Buyers don’t feel confident to book forward, keeping the record size of the 2020 crop in the back of their mind. At the same time (most) packers don’t want to give in any further, as the bottom has been reached in their perspective. As a result the market appears rather weak at the moment, with different motivations and thus prices going crisscross through the market.
Last market report we already spoke about some small delays on the arrival of raw product at the processing factories. Although these delays seemed harmless by then, we spoke with several processors who are getting nervous on the deadlines for their first shipments. This development is putting more pressure on both Eastern European farmers and processors, since demand for this region is mostly used to cover the demand for Christmas. Our visit to Eastern Europe next week will clarify the situation. For now we advise to check your positions which should be filled before Christmas, to overcome trouble on deadlines. The market for U.S. merchandise could be called stable so far, but change is expected to come. Due to news from source of last week, the record estimate of 670.000 MT new crop will probably not be reached this season. The logic continuation for this situation would be an increase in prices, which doesn’t allow a wait and see attitude on U.S. product the coming weeks. We advise to follow the market closely and don’t postpone on both nearby and future positions. Prices from India are slightly different from the other origins. We have seen relatively high prices for light grades in combination with relatively low prices for the amber products. First shipments are booked for the beginning of November, processors are working hard to ship already in October as well.
The market of European walnuts seems to be in a small dormancy. After the tensed weeks before Christmas the market slowed down during the last few weeks. Most processors use this period to work on their marketing plans for 2017 and are open for bookings in January and February. Due to the depressive season in terms of available raw material do the most suppliers have a reluctant attitude towards bookings after February. Main driver is the change on a premature sell out or worse, the change to get blocked on the raw material by terms of price and availability. Bookings on the short term are advised to take in consideration, the sales during January and February will clarify the options for the long term.
California has been running on full steam so far. The shipment figures of November showed us a ‘turkey’ on exported product, achieving the third record this season. Total shipment figures increased by 39.6% compared to November last year. While the crop of the Eastern European regions has been disappointing this season, has the Californian exceeded the estimated quantity as released by the USDA earlier this year. The estimate was set on 670.000 MT inshell during September, while handlers already reported that they received over 675.000 MT so far. After these intense figures most suppliers are currently of the market, expected to be open for booking again during the beginning of January. Prices are expected to maintain firm for both the shelled as inshell market. Please get in touch for a one to one price update, we are happy to inform you.
Walnut exporters in the Eastern European regions were, next to the low availability of raw material, suffering from hazardous weather conditions during the first week of the New Year. Roads covered with snow and ice lead to a RED code in Romania and impeded transportation of both raw and finished product. A lot of rumours of actual crop in the market are spreading their way into the Western European market. A great share of exporters claimed to be running short, while some buyers still neglect these reports and await the market to decrease, which is based on our findings at source uncertain. Our advice is to cover at least the nearby positions and follow the market closely to overcome a miss out on the long term.
The situation with pressure on available product from Eastern European regions still holds. While most buyers were awaiting supply to pick up during the past two weeks, a great share of the suppliers from origin is still off the market. Although this should naturally result in increasing prices, the market has stabilised due to the fact that buying interest is weak and uncertain under the current conditions. The actual available product, which is expected to become clear during the coming weeks, will brighten the situation for both the short and long term positions. At the moment, the reduced presence of high quality product from Eastern Europe seems to influence spot prices for USA product, as reflected by slightly increasing selling prices from European handlers. Nevertheless, prices are not running sky high since buyers take a more restrained attitude and prefer to stay careful with long term positions till Chile becomes active.
For the first time in weeks, we have witnessed a very small relief on the walnut market around the Eastern European and Ukrainian regions. As most suppliers have felt the lack of buying interest from the start of 2017 on, it seems some smaller suppliers are getting nervous and don’t want to miss opportunities by overpricing their goods. This relief is only seen by a couple smaller players so far, the reaction from the buying side will determine whether more suppliers will follow. Furthermore, the presence of good quality product in the market is still to be seen, making the continuation of the market till the new crop hard to predict. Some expected the general market to slightly decrease from this point on, others expect prices to increase again after the first business at lower price levels might encourage the stock holders to keep their prices firm.
We still haven’t witnessed a lot of movement from Eastern Europe. While some urgent demand is filled step by step, buyers are reluctant on covering any further positions. Next to the firm price levels buyers have been scared by the presence of unsure quality these days. The low availability of crop has forced processors to look into other directions for raw material, allowing low quality and incorrect stored stocks to enter the market. Although demand is pushed down by these factors, the market seems to continue firm on the nearby position, as exporters realise that there is still half a year to be covered.
With the Gulfood starting next Sunday, the eyes of many buyers are moving from the Northern Hemisphere to the Southern Hemisphere, where approx. 90.000 MT of Chilean walnuts are becoming mature. With many reputable sellers from California fully booked for the 2016 crop, the Chilean industry seems to be confident on the start of their 2017 season. The exhibition in Abu Dhabi is expected to result in first price indications. Please get in touch for our latest updates, we are happy to work on a customised quotation.