Chilean inshell prices ease as demand softens

June 2, 2022

Chilean walnut prices in the global container market continued to fall in the week to Thursday amid lower reported sales volumes and weaker prompt demand from buyers in India and Turkey.

Stratamarkets assessed CH 30-34 inshell at $2.68/kg FOB, down 1 cent on the week, and CH 34-36 inshell at $3.09/kg FOB, down 6 cents on the week. The CH 30-34 premium to the item’s nearest U.S equivalent, CH JLIS, rose by 2 cents on the week to 24 cents/lb.

Sales of U.S. product are slowing, with several packers reporting that aside from shipping contracted material, their business for the crop year is largely done. The remaining inventory in California is believed to be primarily Combo HP.

Stratamarkets assessed U.S. CH JLIS inshell at $0.98/lb FAS, down 2 cents on the week, and CH LHP 20 at $2/lb FAS, down 20 cents on the week.

Chilean market

Chilean inshell walnut sales appeared to drop from previous levels, with packers reporting mixed results. While some said that they were struggling to attract interest from buyers at current offers, others said they managed to lock in some sales, but only after extensive quality reviews.

Buyers from Morocco and India are still active in the market for Chilean product. In some cases, price is proving to be a stumbling block.

“Prices need to move down to start moving,” said one packer, adding that he was offering Chandler 30-34 in the $2.65-$2.70/kg FOB range but was not receiving solid inquiries.

Chandler 34-36 traded at $3.10/kg FOB on Friday, 5 cents down from Stratamarkets’ previous week assessment.

Some Turkish buyers who visited Chile last week only purchased rain-damaged material at discounts, said a trader in Turkey, adding that higher-priced product would be difficult to sell in Turkey’s local market. 

“The issue is that if they had bought premium selected walnuts from Chile, they would be facing a very low domestic market to sell them into when the product arrives in Turkey,” he said.

The market for Chilean kernels remains slow, with just a few low-volume deals reported during the week. Large Pieces traded at $5.70/kg FOB, 30 cents higher than the previous week, and LHP 70 traded in the $7.15-$7.45/kg FOB range as part of a mixed-load deal.

“The most pessimistic part of the market is shelled walnuts,” a packer in Chile said. “There is no movement and most of the uncommitted volume is that item.” 

US market

Activity in the U.S. market was light, although there were some reported trades for Chandler LHP 80 during the week in the $2.85-$2.88/lb FAS range.

“This time last year, the industry was out of halves so there was quite a rebound and strengthening of prices for whoever still had halves available,” said one packer in California.

Slower sales this year have translated into better high half-count availability, the packer said, and hence prices for these products are softening from earlier levels of around $3/lb FAS.

With the majority of U.S. packers sold out of their current crop, preparations are underway for the new season. Packers said current cooler weather in California is advantageous for walnut production.

Temperatures in the Yuba City region in northern Calfornia are forecast to average in the mid-80s Fahrenheit for the next few days, according to AccuWeather.


Activity in the local Turkish market for imported inshell products was quiet, according to local sources, as buyers continue to manage the impact of the Turkish lira’s multi-year low against the U.S. dollar.

Most demand focused on products either already in warehouses on an ex-works basis or afloat shipments certain to arrive soon. In both cases, purchases are likely to be earmarked for re-export to other regional markets because local demand is weak, traders said. 

A shipment of Chinese origin Xin 185 inshell traded at $2.88/kg CIF Mersin, with one source saying he believed the nuts will be trans-shipped to North Africa.

In Europe, walnut kernel demand is expected to return as retail outlets were gradually depleting their stocks of U.S origin items, traders in Europe said. Still, inflation is slowing consumption.

Chile has not closed substantial business with European customers, a U.K.-based trader said. 

“We could yet see the U.S. challenging Chile for European business for Q4, but it would depend on how bad shipping delays are,” he said.

Sources said that if current shipping delays persist, there is little likelihood of U.S. new crop reaching Europe in time for peak Christmas demand.


Ongoing logistics challenges continue to dominate discussions in industry circles, with U.S. packers admitting there is some nervousness about going into a new harvest this year with shipping problems unresolved. 

U.S. April shipments were up 10% year-on-year at 67,763 inshell equivalent (ISE) short tons, and packers said they are expecting similarly promising volumes for May.

However, one packer said he was concerned that April and May shipments may have been boosted due to a lockdown in Shanghai.

The lockdown temporarily halted the steady flow of empty containers heading there due to carriers taking advantage of much higher rates to export out of the Chinese port to the U.S. West Coast.

“I’m a little concerned now that with the [Chinese] lockdowns lifting soon, that could release some back-up there and again flood the supply chain and create some difficulties on walnut exports,” he said.

Chile is also facing challenges for logistics, partly because it lacks significant import flows that can increase vessel availability.

Chile’s April walnut shipments were down 58% year-on-year at 3,293 ISE mt, although the slow start can be explained by a two-week delay in the harvest due to rains that month as well as the shipment delays.

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