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On inshells:
Southern Hemisphere, 2021 crops: Ongoing delays continue in Tanzania and Mozambique due to container/vessel constraints. In both countries, entire crop is committed either for exports or local producers.

Northern Hemisphere, 2022 crops: West-Africa crops are developing well, with weather having an unlikely impact on the crop size and quality. In some countries (i.e., Ghana, Nigeria) smaller quantities are starting to be delivered by farmers. In Benin, flowering looks promising, with arrivals likely to start around mid-March.

We also see favorable weather conditions in Ivory Coast, with a positive impact on the beginning of flowering. Minimum farmer prices are likely to be declared by the government at the beginning of February. We can expect first crop arrivals in the second half of February.

Last weekend, political unrest started in Burkina Faso, which may have an impact on crop collections and the physical movements to Ghana ports for exports.

Vietnam and Cambodia expect a decent amount of additional rainfall in the coming weeks, making it difficult to predict the impact on the crop size and quality. India arrivals are slightly delayed but spark no concerns as of now.

Available RCN in Asia remains in strong hands, keeping trading at disparity versus spot kernel sales.

Furthermore, final RCN exports may be impacted by other commodities’ (i.e., cocoa, coffee, cotton, etc.) main season in West Africa, as well as ongoing logistical problems.

Political unrest is an issue we must closely monitor. As seen in 2010, unrest in WAF countries may pass borders, creating unrest in other countries. With the strong growth in demand, this cannot be absorbed by the cashew industry.

On kernels:
Demand has started to pick-up, with US/EU being the current drivers. Most of the interest is for March and the following months, which begins the challenge of logistical issues and increasing freight rates. In addition, most of the NH crop quality/size is not yet clear, reducing the appetite for processors to go largely into forward demand. India and China demand remains sluggish, which is normal for this period of the year.

Kernel prices remain low, with good flows expected from NH crops and spot RCN available in Asia, meaning we will most likely not see a squeeze in supply. Any possible squeeze may come later in the season once local crops from India/Vietnam/Cambodia are finished and processors need WAF crop flows. Despite noticeable delays in RCN/kernel shipments from Africa, shipments continue. Vietnam is headed into Tet break, significantly narrowing the window for February execution.

Bullish points:

  • Strong consumption continues and main destination pipelines start reducing earlier than expected.
  • Higher probability that WAF RCN execution will be delayed due to logistical issues and/or political unrest.
  • Raw material, production and shipping costs start to increase from Ivory Coast, which is by far the largest RCN growing area, which will ultimately impact base pricing for processors.
  • EU and US pipelines indicating to be thinly covered beyond February/March period.

Bearish Points

  • Smaller receipts started in WAF crops, indicating no further foreseeable weather risk.
  • Low demand from China/India continues.
  • Vietnam processors willing to trade last available loads at a discount before closing for Tet.


January interest started off slow at the beginning of the month but has gained momentum as market sentiment has settled to levels that growers and buyers can agree on. Most transactions are for prompt shipments to 90 days out. With shipping woes continuing due to logistics, many are taking positions further out to assure that out of stocks do not occur due to extended shipping times required.

Overall, we are seeing activity in all major markets, across all varieties and sizes, as prices have now met a low for the year. Pressure on supply due to crop receipts confirms a crop size this year of 2.90 to 2.95 billion pounds and continued back-ups at the ports worldwide have created an oversupply that may result in a carry-over of 800+ million pounds. Meanwhile demand remains strong and is only interrupted by the industries inability to ship the product. Buyers, and sellers, are working to minimize the effect this has on business getting done and keeping the supply chains functioning.


Inshell pricing continues to soften because of the larger crop with Inshell Ex 21/27 being quoted as low as $3.50-$3.60. Large size inshell continues to hold a $0.30-$0.40 premium over smaller sizes due to short supply. Shelling stock also remains in extremely tight supply with minimal closed shell to be found in 2021 crop. As a result, most processors are shelling out any closed shell they must meet for their kernel demand, which continues to grow. Kernels continue to firm due to high demand and lower supply, with 80% wholes pushing close to $9.00 levels.

The CA 2021 crop receipts will finalize at roughly 1.2 billion pounds. This is a record crop in an “off” year. Both Iran and Turkey crops are down this year, leaving global supply flat to slightly down this year. With good chilling hours and decent precipitation so far this winter, it is possible we could see a larger CA crop in 2022, with industry estimates between 1.1-1.4 billion pounds. We will have to see how this impacts pricing of all grades, as large sizes and kernels have been in short supply, even with the larger crops.


While overall supply is down 5% versus the same time last year, YTD shipments are down 22%. Q4 is generally a very important shipping period for the CA walnut industry with 45%+ of total shipments sent out by the end of December. This year, demand and shipments were lower in Q4 due to China’s aggressiveness in the market and shipping issues out of CA. Now that we are into 2022, we are seeing weaker/undersold sellers dropping pricing aggressively to get sales on the books. US Domestic pricing is also being offered at a discount to export pricing as sellers are giving preferential pricing to US buyers as they know the product will ship. With pricing reaching historical lows on some grades, with Combo as low as $2.00 and LHP20 near $2.50, many US buyers and sellers are now thinking we have reached a bottom and will see pricing rebound. Demand and inquiries have been stronger this week than we have seen in several months, with interest coming from both domestic and export markets. With China origin mostly done as they do not have infrastructure to hold their crop, and Chile still several months away, it is likely that we will see a bottom and some prices rebound for US product in the near term. Light color and higher quality product will continue to demand a premium, while lower quality product will need to continue to be moved.


According to the Federal State Inspection Service, 3,198,041 farmer stock tons (all but 3,116 tons grading as seg 1) have been received and graded as of 1/21, which slightly exceeds the total estimated production.

The latest USDA NASS Crop Production report estimated production at 3,194,650 tons, an increase of 2.3% from the previous estimate. Harvested acres were estimated at 1.545 million acres. They projected 4,450 pounds per acre in GA, which is still the third highest in history. Overall yield estimate is 4,135 pounds per acre (still the second highest national average on record).

Usage/demand is down 1.4% for this crop YTD (August–November) versus last year. Exports are down 22.3% for this crop YTD (August – November). Carryout for 2021 crop is estimated to be 1.124 tons, with estimated total usage to be down 3.2% versus last crop year.

Commodity futures remain strong with corn at $5.78, soybeans at $13.16 and cotton at $0.98 (for December 2022). Escalating input costs will play a part in planting decisions next year, as well as the price that peanut farmer stock will demand.


Supply Side:
The crop sizes across most origins have been as per the expectations. While we have a record Turkish crop of around 800K MT, shortages in Italy, Oregon and Georgia have wiped out the surplus to some extent.

In Turkey, we expect the farmers/ Manavs to be still carrying around 100-125K inshells, and this balance crop will steadily flow into the market in the coming months.

TMO is holding stocks to the tune of around 80K MT.

The availability of the product was a concern during December and early January, as an extremely volatile currency and holiday period had put the market at a complete standstill.

In the past week, we have seen better availability of product as currency stabilizes around 13,50 levels. The inshell availability still seems limited, but kernel availability is better since many crackeries are now willing to sell a part of their stocks given the high cost of carry.

Current price levels for inshells are around 35-36 TL/kg, depending on the region and quality. We believe these are fair levels for the market to settle post currency fireworks.

Demand Side:
The exports this year are notably higher than the last year, but we believe it has more to do with replacement of the Italian short crop, rather than a large increase in demand.

Most large confectioners, as well as retailers, have closed their tenders for the season, and we do not expect any large requirement coming soon. However, mid-size companies, bakery segment and Italian manufacturers still seem uncovered, and are actively inquiring for spot deliveries.

Ferrero, too, seems to have covered its seasons demand and might source for the remainder of the season, unless we see any adverse news on the next crop.

Our View:
In short, we expect slow demand, as well as trickling supply in the next few weeks. We also expect relative stability around the current levels — with a rider that the currency stays fairly stable.

We now waiting for two important pointers for the market moving forward in February: flower count and growth indications during February. These will provide important guidance, especially for the farmers/Manavs still holding stocks. If we do notice problems, we might see a sharp reduction in supply.

TMO sale time and price:
The TMO, too, is expected to wait for the flower count to decide on their selling strategy. In case of lower flower counts, they may release the stocks slower. Also, the market believes that the TMO will wait for the inshell prices to touch $3/kg (at 13,50 TL/$ - this translates to 40 TL/kg). We believe this might be speculative information, and the TMO decision to sell would be based on the absolute TL value, rather than the U.S. dollar price.


The Inshell 2021 final arrival estimated at 237k MT. Australia has now reportedly closed the season with 51,500 MT inshell at 3.5% moisture, which is +10% over 2020. The south is projected to close at 54,174, +11% over 2020. For 2022, Australian crop is looking good, and the industry forecasts a 10% increase over 2021 numbers. For South Africa, the first new crop estimates are expected by the end of the month. Signs remain positive, which under normal circumstanes leads us to believe we can expect growth.

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