Xinjiang Walnut Harvest Begins with Positive Feedback from Farmers

Walnut Kernel

Published Oct 20, 2023

The harvest season for Xinjiang walnuts has begun, with farmers reporting positive feedback on the quantity and quality of the upcoming harvest. Higher yields per hectare and larger fruit sizes have been observed across much of Xinjiang. Currently, local governments are encouraging walnut processing factories to sign purchasing contracts with farmers at a competitive price to protect the farmers’ benefits. Despite China's walnut exports experiencing a significant decline in 2021/22 due to the COVID-19 pandemic, the export industry is predicted to recover in the coming months due to various factors. The top export destinations for Xinjiang walnuts are the UAE, Kazakhstan, and Kyrgyzstan. However, China's walnut quality is still not at par with US and Chilean products, and finding new markets is crucial for the industry.

Bumper Crop Expected in Xinjiang

The Xinjiang walnut harvest season started at the end of August in the main walnut-producing bases, including Aksu, Hotan, and Kashgar City. Xinjiang walnuts generally mature in August to September, begin to be on the market at the end of September, and start to be sold in large quantities in mid-October. Even though the harvest is still on the way, farmers report positive feedback on the quantity and quality of the upcoming crops. Higher yields per hectare (ha) and larger fruit sizes have been observed across much of Xinjiang. This can be attributed to the improvement of the walnut variety and the use of machinery in recent years.

In Aksu, the biggest production base in Xinjiang, the official guide farmgate price for mixed grade walnuts (in-shell basis) is RMB 12 to 15 (USD1.70 to 2.00) per kilogram (kg) differing in quality and varieties, which is slightly higher than the previous year. Xinjiang is China’s biggest commercial walnut producer, making up 22.15% of the national production. Considering Xinjiang’s large contribution to the total crop, the bumper harvest in Xinjiang will definitely have a positive impact on the country’s total output.

China’s Total Production

According to the latest United States Department of Agriculture (USDA) estimates, Chinese commercial production for in-shell walnuts in the 2023/24 marketing year (MY) is 1.4 million metric tons (mmt), unchanged from last season's record production. Although production may plateau in the upcoming years, it's noteworthy that it surged from a mere 418,000 metric tons (mt) a decade ago to 810,000 mt just five years ago.

The increased production can be attributed to the rapid expansion of walnuts cultivated between 2010 and 2015. As these trees have matured, they have now entered a high production period. Furthermore, the introduction of modern nut varieties and mechanization of growing and harvesting has led to higher yields and increased kernel weight, making China more competitive in both domestic and international markets.

After 2015, the expansion in walnut areas slowed significantly. Furthermore, due to the global price decline in the last three years, the country's total cultivation area is expected to remain unchanged or slightly decrease. As a result, Tridge predicts the country’s total production will remain at 1.4 to 1.5 mmt over the next few years.

China's Export Surge Set to Level Off

China’s 1.4 million mt in-shell crop is equivalent to around 616,000 mt on a kernel basis. Of this number, around 75% was consumed domestically in 2022/23. While domestic walnut consumption increased over the last decade, it grew at a slower pace than production. As a result, China’s walnut exports have soared but could level off in 2023/24.

For the 2022/23 marketing year, which concluded on August 31, China exported approximately 97,411 mt of walnuts (measured on a kernel basis). Benefiting from its distinct geographical and climatic conditions, Xinjiang stands as China's premier commercial walnut producer and primary exporter. A significant reason for this prominence is the direct road exports to neighboring countries like Kazakhstan and Kyrgyzstan. In 2022 alone, Xinjiang exported 43,000 mt of walnut products, making up 33.59% of China's total walnut exports.

China’s decision to abandon its zero-COVID policy, the depreciation of the yuan against the US dollar, and an increase in shipping lines are positive for exports. Additionally, the modernization of Xinjiang’s walnut industry has led to improved quality. However, Chinese walnuts may still face challenges in competing with the higher-quality walnuts from the US and Chile, especially in markets like Europe. Global markets have ample supplies of lower-quality walnuts, putting them in direct competition with China's products. Although a significant portion of China's exports head to the UAE, Kazakhstan, and Kyrgyzstan, the country must explore additional markets for further export expansion. For the 2023/24 season, exports are projected to be similar to or slightly lower than those in 2022/23, falling within the range of 94,000 to 98,000 mt.