Challenges and Opportunities in Chile's Walnut Industry for 2024

Chilean Walnut Production Outlook for 2024 Amidst Weather Challenges

Chile's walnut production faces significant challenges in 2024 due to adverse weather conditions in the Central and South Valleys, with an anticipated decrease in volumes of 15% to 25% compared to the previous season. Factors such as insufficient winter chill, a cold spring, irregular flowering, and disease outbreaks are expected to lower production volumes compared to 2023. Despite these challenges, diligent irrigation and soil management practices aim to uphold Chile's renowned walnut quality standards.

In Apr-24, the harvest was delayed by 10 to 15 days, further complicating the situation. Despite the previous season's robust production of 181.64 thousand metric tons (mt), the current outlook suggests a decline. Quality parameters remain relatively stable, with a slight decrease of approximately 1% in pulp yield. The Chilean Nut Producers and Exporters Association (Chilenut) plans to provide updated information in the coming weeks as processes progress.

Anomalous Flowering Patterns Impact Walnut Production in Chile's Central Valley

The Central Valley of Chile, including the Santiago Metropolitan Region, O'Higgins, Maule, and Ñuble Regions, experienced anomalies in flowering patterns that are expected to result in a varied size spectrum among walnuts, potentially leading to a projected 10 to 15% reduction in overall production. Furthermore, the abundance of water reserves from a wet winter and the successful mitigation of soil chloride levels are anticipated to foster optimal soil conditions for walnut cultivation.

Challenges in South Valley Regions Threaten Walnut Production in Chile

Weather-related adversities, coupled with disease outbreaks, are likely to precipitate a substantial 20% decline in walnut output in the South Valley, in the Regions of Bio Bio, La Araucanía, Los Ríos, and Los Lagos, posing formidable challenges to production. Despite the anticipated diminished production, meticulous attention to irrigation and nutritional protocols aims to preserve quality standards.

Chile’s Walnut Industry Insights & Global Market Dynamics

Organized by ChileNut, EXPONUT 2023 previously highlighted the significant growth and global prominence of Chilean walnut production. The President of ChileNut emphasized the collaborative efforts within the industry, positioning Chile as a leading walnut producer in the Southern Hemisphere. An international panel discussed the future of walnuts in India, shedding light on shifting market dynamics and opportunities for Chilean exporters. Experts underscored India's transition from a predominantly California walnut market to a significant consumer of Chilean walnuts.

While Europe was traditionally the focus for Chilean walnut exporters, Asia, particularly India, and the Middle East, notably Türkiye, have emerged as key markets, with an increase of 87% year-on-year (YoY) of in-shell exports to India with 48.96 thousand metric tons (mt) and a 27% YoY decrease in exports to Türkiye but still maintaining high levels with 23.25 thousand mt. Chile ranks third globally in walnut exports, behind China and the United States (US). There are ongoing efforts to diversify and promote Chilean walnuts in international markets, with targeted promotional activities planned for India, Türkiye, and Spain in 2024. In addition, the Chilean Minister of Agriculture pledged continued government support for the thriving nut industry, citing impressive export figures. Walnuts in shell accounted for a substantial portion of Chile's nut exports, showcasing the sector's robustness.

Valparaíso Region Driving Growth in Chilean Walnut Exports to India

The walnut industry in Chile is experiencing significant growth, with the Valparaíso region emerging as a key player in boosting shipments to India. According to Chilenut, walnuts are the second-largest planted fruit tree, covering 46.23 thousand hectares (ha) across eight Regions, with Valparaíso ranking fourth in planted ha.

In 2023, the Valparaíso Region witnessed remarkable growth in walnut exports to India, recording a substantial 162% increase compared to 2022, totaling USD 14 million. Other leading regions contributing to this surge include the Metropolitan Region (101% increase), O'Higgins (65.9% increase), and Maule (60.8% increase). This upward trend was fueled by strategic initiatives such as a trade mission and a Business Roundtable organized by 12 Chilean companies in New Delhi. A total of 111 meetings were conducted, making it the largest business conference organized in India for Chilean trade.

Figure 1. Chilean Walnut Exports to India

Chilean exporters projected business opportunities worth approximately USD 6.4 million, with walnuts emerging as the top product of interest, alongside dried plums, apples, kiwis, and cherries. These efforts signify a concerted push to expand Chile's presence in the Indian market and support local companies in their internationalization endeavors.

Continued Growth Forecasted for Chile's Walnut Exports to India

Chile's walnut exports to India are set to continue growing despite production challenges, driven by increasing demand and strategic initiatives. The Valparaíso region's significant role, along with efforts to promote other Chilean products, will fuel this expansion. Overall, sustained growth in exports to India across various product categories is forecasted, cementing Chile's presence in the Indian market.