The California walnut industry has taken a hit after exports declined, in part because of reduced demand from China, the largest buyer of California walnuts. US exports to Vietnam, on the other hand, have remained strong.
China, the largest importer of California walnuts for the past several years, has helped the industry generate roughly $1.4 billion in revenue for growers. In 2014, however, the country drastically cut imports of the product due to a record domestic harvest. Reports say that China produced a crop yielding 35% more than its average production, enabling it to satisfy much of its own demand. As a result, walnut exports to China from September through November were down almost 30 million pounds compared to the same time the year before. Exports to Hong Kong were also down almost 60% in November of 2014 compared to 2013. Other international importers are buying less, too. Percentages are down in major import countries like Turkey and Italy as well as smaller buyers like Australia, Thailand, Germany, and Brazil. As a result of the sudden changes in demand, prices are being affected. The cost of walnuts has fallen 14% between November 2014 and January 2015, and could continue to drop another 10% in the coming year.
On the other hand, Vietnam is one of the few export destinations for California walnuts which has not reduced imports. The country has imported seven million more pounds of walnuts than China in the first three months of the 2014/15 season. Vietnam is currently the 12th largest agriculture export market for the US and the two countries have recently celebrated a 9316% increase in two-way trade since 1995. The Trans-Pacific Partnership (TPP) currently in discussion, of which the US and Vietnam are both members, is expected to further expand trade relations.
The California walnut industry accounts for 99% of production in the United States and supplies two-thirds of the international walnut trade. The industry is made up of more than 4,000 growers in California’s Central Valley where it supports roughly 60,000 American jobs.
Nate Schlabach is a Research Intern at the East-West Center in Washington and a graduate student at the Center for Justice and Peacebuilding at Eastern Mennonite University.
Doris Xu is a Research Intern at the East-West Center in Washington and an undergraduate student at the University of Sydney.