Part 1: The Chinese Walnut Slowdown: Not A Worst Case Scenario

There’s been some negative media coverage lately stating that the Chinese market has been closed to California walnuts, so American/Western Fruit Grower talked with Michelle McNeil, senior marketing director for the California Walnut Board and Commission, to get the scoop.

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“I think the premise being that China is not buying, well that is, in fact, not the case,” says McNeil. “China remains a very valuable market to us — in fact, one of our leading export markets.”

walnutsThat’s not to say walnut exports to China aren’t slowing. Year to date (September-December 2014), the U.S. exported 73.8 million in-shell pounds (down 32% versus the prior year) to the Greater China market, which includes China, Hong Kong, Vietnam and Thailand. “However; we have to remember we are only four months into a 12-month year,” says McNeil.

She attributes the slowdown to a particularly robust Chinese walnut crop, but again, she’s quick to note that it’s still early. “We anticipate that China will be back,” she says. “Year to date we’ve seen a little slowing, but nothing to be alarmed about.”

She also points out this isn’t the first time something like this has happened. In 2008, for example, the industry came off a short crop year to a bumper crop year, creating a large amount of product in the market. “That was the year that China stepped in and purchased a lot of volume from us,” says McNeil. “We’ve recovered quite nicely from that.”

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It comes down to market dynamics, she adds, and sometimes it just takes time to even out. “I think most of our industry members are well aware of ebbs and flows of crop cycles,” she says. “Obviously, we want to make sure that we’re doing what we can as a marketing board to keep volume stimulated so we continue to move product through the market.”

Click here for Part 2, where we’ll look at emerging markets and what the Walnut Board and Commission is doing to increase demand globally for California walnuts.

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