Walnut sales to China drop 90%, pistachio exports down 30% and almond shipments drop 20%
By John Lindt
CALIFORNIA – This season’s ‘big three’ nut crop exports to China/Hong Kong are slight when it comes to walnuts and are off by double digits in the case of pistachios and almonds.
The latest California Walnuts shipping report published Feb. 7 reports on a year-to-date basis that shipments went from 6.4 million pounds of inshell walnuts in the 2018/19 crop year to just 343,000 pounds this season – over a 90% plus drop. Exports of walnuts to all countries are down about 12%. One factor is a smaller California crop but clearly tariffs are playing a big part in these China numbers.
US exports to China of pistachio nuts are down around 30% from last year according to export figures published in mid-January by the California-based Administrative Committee for Pistachios. Through December 2019, China and Hong Kong combined received around 36 thousand tons of open-shell nuts compared with 49.4 thousand tons through December 2018.
China is the most important market in the case of pistachios. Before this harvest season that started in September, exports to China pistachios have largely been unaffected by the ongoing trade war in retaliation for President Trump’s tariffs on imported steel and aluminum.
In the last shipping season, China and Hong Kong were the destination for 55% of pistachios exported from the U.S., representing a farm gate value of $339 million, said Richard Matoian, executive director of the Fresno, Calif.-based American Pistachio Growers.
“We believe that consumers in China really recognize the value of pistachios,” he says, noting that they have become “a preferred gift” for the Chinese New Year and other special occasions.
But Bob Klein. manager of the Administrative Committee. says the picture is complicated. Reduced shipments may be impacted by more than the trade war as the 2019/20 pistachio crop was an off-year harvest and supply is down from the year before. In addition the U.S. top competitor, Iran, had a good harvest and may have shipped enough nuts to satisfy China’s demand to date. He says he believes Iran shipped more product this year for Chinese New Year that turned out to be a bust because of the disruption of the Coronavirus in that country.
In fact Klein says the virus in China may spell more bad news for this year’s export season due to expected reduced demand for many U.S. products even if China relaxes its tariffs.
Financial analysts are predicting a hit on the US GDP (down to 1.2 in Q1) affecting the whole US economy in the first quarter in part due to weak demand in China.
Almonds down too
California’s other big nut crop, almonds, have seen minimal impact from the tit-for-tat trade war in the past but that may be changing as well.
The latest California almond shipping numbers through January 2020 (year to date) to China/Hong Kong are down about 20% from 100 million pounds shipped this time last harvest season (18/19) to just under 80 million pounds so far this season.
Over 80% of the world’s almonds are grown in California and some 70% of the state’s harvest is exported.
Back on pistachios, speaking last October, Richard Matoian said he was surprised at the small size crop but still expected a strong shipping season to China.
“We see the demand for pistachios growing all around the world. Citing earlier numbers he remarked that shipments to China have been strong— “despite the tariffs we’ve had record shipments into China. “
A recent Rabobank analysis explains how a tariff rules may account for some of the more recent weakness. “Despite trade concerns, pistachio shipments during the 2018/19 marketing year continue at a strong pace. For several months, the U.S. industry took advantage of a raw vs. roasted pistachio tariff differential going into China (45 percent vs. 15 percent) by focusing on shipping roasted products. However, in the June 2019 retaliatory tariffs, China increased tariffs on U.S. processed pistachios, eliminating that option to avoid higher tariffs.”
Rabobank expected Iran pistachio shipments to remain weak in 2019/20—but maybe not so much.