Good crop to boost walnut exports

Indian walnut exports are expected to increase to 17,000 tons in 2004-05 from 15,000 tons in 2003-04. Production in the current year was likely to be higher at 33,000 tons while domestic consumption would stagnate at 16,500 tons.

Walnut exports would depend on demand and domestic prices. Exports in 2003-04 was 15,000 tons, unchanged from 2002-03 levels following tight domestic supplies. The bulk of India's exports of shelled walnuts went to European countries like Spain, Greece, Germany, and France.

Assuming normal weather, the 2004-05 walnut crop was likely to be higher at 33,000 tons as it would be on the higher yielding phase of the alternating bearing pattern. As much as 98 per cent of the Indian walnut crop came from Jammu and Kashmir, grown under rocky, rainfed conditions.

Prices received by growers have stagnated. This and continued violence in Kashmir have discouraged additional plantings.

The expected recovery in exports would be aided by availability of lower priced almonds. Domestic walnut prices were firm in 2002-03 and 2003-04 on tight domestic supplies.

Exports in 2002-03 dipped to to 15,000 tons on tight domestic supplies, strong domestic demand and diminished export competitiveness owing to rise in the value of the Indian rupee. The value of the Indian rupee compared to the US dollar improved by 5-6 per cent during 2002-03.

Major export in fiscal 2001 and 2002 were Spain, Germany, France, U.K., Greece, Egypt, Netherlands, Denmark, and Italy.

Walnuts were mostly exported from October through March. More than 95 per cent was shipped as kernels, comprising 40 per cent light halves, 20 per cent amber halves-broken and the balance broken, in vacuum packs.

The government has removed all restrictions on walnut exports. Export subsidies have been eliminated as well.

Walnuts, like most other dry fruits and nuts, can be imported without restriction under the Open General License (OGL), subject to an effective import duty of 35.2 percent except for walnuts produced in South Asian Association for Regional Cooperation (SAARC) countries and Afghanistan.

Given the robust domestic crop and high tariffs, import volumes were likely to be negligible.

According to a report by the United States department of agriculture (USDA) foreign agricultural service (FAS) wing, -04 the 'down' phase of the alternating bearing pattern of the trees would be experienced in the 2003-04 October-September walnut season.

However, the crop would still be higher at 31,000 tons in shell basis owing to favourable weather conditions.

Market sources said the nut size was up by 10 per cent this season compared to the previous year's harvest. Nut size would typically be in the 24-32mm range. Average yields were however still rather low owing to the lack of irrigation facilities and low soil fertility. Indian yields were in the range of 18-50 kg per tree per year.

Indian walnuts were classified as either hard, medium or thin shell (kaghazi). The average shelling rate was 40 per cent, but could go as high as 70 per cent in the case of the thin-shelled 'bakshi' variety.

Despite tight supplies, walnut consumption in 2003-04 was higher at 16,500 tons on improved domestic demand and expected higher prices of other nuts like almonds.

Better consumer packaging (vacuum packs) encouraged middle class consumers to buy walnuts round the year for use as a snack.

Walnut usage by the confectionery and ice-cream industry was expected to continue to increase as walnut prices were competitive with other nuts like almonds, cashew nuts, and pistachios. Around 2-3 per cent of the walnut crop would be rancid nuts and these were used to extract oil bought by soap and cosmetic manufacturers.