Chile is on course to double its walnut production in the next five years as plantings soars in response to vigorous global demand. Planted area is currently estimated to be around 43,000 ha, which includes at least 15,000 ha of new production which has yet to reach full potential.
According to Álvaro Jiménez, the newly elected president of producer association Chilenut,
volumes are on course to reach almost 80,000 tonnes this year and top 100,000 tonnes by 2017. “By 2024 we could be looking at a crop of 200,000 tonnes, says Jiménez.
This growth is not confined to Chile. California, which accounts for virtually all of US production, has seen a 50 per cent increase in planted area in the past decade and now total almost 150,000 ha. Jiménez is confident, however, that the world can absorb the surge in global output.
“The world wants walnuts,” he says. “Concerns about health and nutrition are higher than ever and they are seen as being expensive and exclusive. This will no doubt change as availability increases and walnuts are used more widely as a food ingredient. The challenge producers face is to reach as many consumers as possible in places like India, China and the Mediterranean countries where demand traditionally outstrips supply.”
Nevertheless, price erosion is a real concern. After two boom years in 2013 and 2014, prices fell sharply in 2015 due to a combination of high stock levels, currency devaluations and bumper Northern Hemisphere crops. In Chile’s case, the situation was compounded by a period of heavy rainfall at the outset of the season which cut production and caused widespread quality issues.
Jiménez is confident that the industry will get back on track when the new season gets underway in April 2017. “In spite of the large Northern Hemisphere crop, the outlook is much brighter. Stocks are lower and the economic situation in some of Chile’s most important markets, including Brazil and Europe has improved somewhat,” he says. “Plus, the market for fresh and processed walnuts is growing strongly.”
The fact that Chilean walnuts in their shells are now able to access China tariff free is a major boon for exporters, who are also looking to increase sendings to Europe and open up the Indian market. Closer to home, Jiménez notes that more investments are needed in orchards and packhouses to bring down production costs. “There’s no doubt that the golden era of walnut production has come to an end, but Chile has an excellent reputation for quality and provided we can boost our competitiveness, we believe the industry has a bright future,” he says.