Almond and Walnut Annual

An Expert's View about Agriculture and Animal Husbandry in Chile

Posted on: 12 Oct 2011

Almond production and exports are expected to fall this year mainly due to unfavorable weather conditions. Meanwhile walnut production will increase in MY2010/2011 compared to the previous year due to a significant increase in planted area over the last few years.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 9/12/2011 GAIN Report Number: CI1034 Chile Tree Nuts Annual Almond and Walnut Annual Approved By: Rachel Bickford, Agricultural Attaché Prepared By: Luis Hennicke, Agricultural Specialist Report Highlights: Almond production and exports are expected to fall this year mainly due to unfavorable weather conditions. Meanwhile walnut production will increase in MY2010/2011 compared to the previous year due to a significant increase in planted area over the last few years. Executive Summary: Chile?s walnut production and exports in MY2010/11 are expected to increase over the last year because planted area has expanded significantly in the last few years and new orchards are coming into production. For the outer years, output should continue to expand as a result of improved technologies, replacement of uprooted orchards with improved varieties and a significant increase in planted area. Commodities: Walnuts, Inshell Basis Production: Walnut production has expanded over 15 percent during the last 3 years as a result of a significant expansion in planted area with newly developed varieties coupled with the replacement of old, low production orchards that originated with trees from seeds. Also, an increasing number of producers are adopting improved technologies like pruning and drip irrigation. Additionally, the use of a chemical called ?retain? which prevents the blooms from aborting due to an excess of pollen, has eliminated the alternate bearing effect in walnut production. As a result, walnut output will continue to increase, with minor dips and peaks, due to an expansion of the new planted area which is coming into production. In 2012, the industry expects output to be at the level of 44,000 metric tons and over 60,000 MT in 2015. Walnuts are planted from the Third Region (Copiapo) down to the Ninth Region (Temuco), with over 90 percent of the crop planted in the central areas, specifically Region Five (San Felipe-Los Andes), the Metropolitan Region (Santiago) and Region Six (Rancagua). Region IV (Ovalle area) has seen the biggest expansions in area planted during the last 2 to 3 years. The two main factors for an overall increase in planted area during the last 3 to 5 years are a continuous deterioration in the profitability of alternative fruit crops and the relatively good prices and economic returns obtained by walnut producers. An industry source indicated that total planted area of walnuts will keep increasing in the coming years mainly due to the labor shortage which is affecting the whole fruit production sector in Chile, walnut production can be mechanized and a large number of producers are reportedly switching to walnuts after their table grape orchards are finishing their production cycle and need to be replanted. Inputs All commercial walnut orchards are planted on irrigated land. However, until now only an estimated 60 percent of the planted area has modern irrigation systems. As a result, when there is not enough water supplied from wells, rivers and streams flowing from the Andes Mountains, water availability becomes an important factor limiting production, mainly in Regions V and VI. The average orchard size is 10 to 15 hectares, which is double the size of orchards in France and half the size of orchards in the U.S. Although a large percentage of Chilean walnut trees in production originate from seeds, budding and grafting of new and improved varieties like Serr and Chandler has increased in recent years. Industry sources report that there is still an estimated 30 percent of the total planted area that originated from seeds, but declining fast as producers have been replacing these orchards during the last few years. Increasing labor costs are an important factor affecting walnut production and processing. Chile has a competitive quality advantage in shelled walnuts, since almost all shelled walnuts are hand-cracked. Although the premium Chile obtains from this quality advantage has thus far continued to encourage hand-shelling; increased labor costs may mean that Chile could lose this advantage in coming years. In the case of walnut production, labor represents 70 % of total costs. As reported by some producers, production costs for walnuts are estimated to be between US$2,300 and US$2,500. Consumption: As with most other Chilean fruits, domestic walnut consumption is a residual of the export market. If international prices are low, exports fall off and domestic consumption increases as the larger supply drives domestic prices down. However, domestic demand does not drive consumption or determine market prices. Trade: The EU countries lead by Italy, Spain and Turkey are Chile?s main export market for walnuts, they accounts for more than 60% of total exports. Post predicts that as production continues to expand in the coming years total exports will expand as well. Varying amounts of mostly shelled walnuts are being imported by the Chilean confectionary industry. Stocks: There is no trade or official statistics available on Chile?s average stocks. However, exporters normally try not to carry over-stocks. Policy: There are no specific Government policies regulating or benefiting tree nut production in Chile. The general import duty on walnuts is 6 percent except for countries with which Chile has signed trade agreements. As a result of the US-Chile Free Trade Agreement trade of walnuts between both countries face a zero duty. Production, Supply and Demand Data Statistics: Walnuts, Inshell Basis Chile 2009/2010 2010/2011 2011/2012 Market Year Begin: Mar 2010 Market Year Begin: Mar 2011 Market Year Begin: Mar 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 23,000 0 25,000 28,000 Area Harvested 0 15,000 0 18,750 21,000 Bearing Trees 0 3,000 0 3,750 4,200 Non-Bearing Trees 0 1,600 0 1,250 1,400 Total Trees 0 4,600 0 5,000 5,600 Beginning Stocks 1,521 1,521 2,121 1,151 1,171 Production 32,500 32,500 35,000 38,200 44,200 Imports 700 560 0 200 200 Total Supply 34,721 34,581 37,121 39,551 45,571 Exports 28,900 29,600 32,000 34,380 39,800 Domestic Consumption 3,700 3,830 3,500 4,000 4,300 Ending Stocks 2,121 1,151 1,621 1,171 1,471 Total Distribution 34,721 34,581 37,121 39,551 45,571 HA, 1000 TREES, MT Export Trade Matrix Country Chile Commodity Walnuts, In shell Basis Exports for: 2010 2011 Time Period Jan-Dec Units: M.T. Units: Volume Value Volume Value U.S. 95 280 U.S. 24 77 Others Others Turkey 7,370 33,751 Turkey 9,687 41,636 Brazil 7,190 37,466 UAEmirates 3,080 15,922 Italy 3,843 19,801 Italy 2,262 12,651 Germany 2,525 15,212 Brazil 1,459 8,503 Spain 1,491 8,697 Germany 1,382 8,914 Netherlands 1,061 6,081 Spain 1,050 6,040 Portugal 1,025 6,329 Russia 479 3,281 Switzerland 895 5,902 Switzerland 339 2,480 Argentina 783 3,764 Netherlands 316 2,023 UA Emirates 523 3,084 Austria 272 1,678 Total for Others 26,704 20,326 Others not Listed 2,792 1,405 Grand Total 29,591 159,701 21,755 111,222 Note: 2011 data is from January through July only. Commodities: Almonds, Shelled Basis Production: Unfavorable weather conditions during the winter of CY2010 combined with lower temperatures than normal prevented bees from working efficiently during pollination, all resulted in a lower than previously estimated production of almonds in MY2010/2011. For next year industry sources have indicated that production could result even lower as weather during the last few months in all production areas has again not been favorable for almond production. Crop Area Although almond trees are planted from Region IV (Ovalle) down to Region VIII (Chillan), over 80 percent of the total planted area is in the central regions, specifically Region VI (Rancagua) and the Metropolitan Region (Santiago). The largest increases during recent years of new planted orchards are in Region IV (Ovalle) area, as was indicated by industry officials. Almonds are planted on irrigated land and average yields are estimated to be between 800 Kg to slightly over one metric ton per hectare. An estimated 60 percent of the production comes from medium size producers who have from 6 to 25 hectares planted with average production of 2 to 3 thousand Kilos per hectare, although there are also some with less than 1,000 Kg. per hectare. Industry sources report that although many producers are increasing their plantings, total planted area in Chile will most probably not exceed 15,000 hectares, as almonds compete with avocados and citrus for the best production areas. These crops have the same constraints: soil and weather (rainfall and frost). New avocado and citrus (mainly tangerines) plantings have exploded during the last few years as a result of excellent economic returns. Although Chile has no special advantages in almond production, industry sources indicate that in the next 5 to 7 years an estimated 500 hectares will be planted every year. Out of this total approximately 100 hectares will replace old aging orchards and 400 hectares will correspond to new-planted area. Inputs: Nonpareil is the main variety planted, accounting for 48 percent of the total planted area. Other varieties like Carmel, Merced, Solano and Price are used mainly for pollination. Industry sources have indicated that an increasing number of producers are planting new varieties developed from varieties coming from Spain like Madera and Allinone. All commercial almond orchards are planted on irrigated land. However, only an estimated 40 percent of the planted area has modern irrigation systems (drip irrigation). Trade: Most almonds exported are shelled and sent to markets where Chile has tariff preferences like Mexico, Argentina, Brazil, Colombia, Venezuela and the European Union (Spain, Italy and the Netherlands). Chile also imports almonds, mainly from the United States. Industry sources indicated that imports are mainly used by the confectionery industry and are of a smaller size than the ones produced in Chile. Policy: There are no specific Government policies regulating or benefiting almond production in Chile. The general import duty on almonds is 6 percent. However, as a result of the US-Chile Free Trade Agreement, U.S. almonds enter Chile duty free. Production, Supply and Demand Data Statistics: Almonds, Shelled Basis Chile 2009/2010 2010/2011 2011/2012 Market Year Begin: Dec 2009 Market Year Begin: Dec 2010 Market Year Begin: Dec 2011 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 8,400 0 8,900 9,200 Area Harvested 0 6,250 0 6,590 6,624 Bearing Trees 0 2,223 0 2,344 2,356 Non-Bearing Trees 0 677 0 729 821 Total Trees 0 2,900 0 3,073 3,177 Beginning Stocks 1,950 1,950 450 1,164 264 Production 6,500 6,000 10,000 8,000 7,000 Imports 2,900 3,752 3,500 1,300 2,500 Total Supply 11,350 11,702 13,950 10,464 9,764 Exports 7,500 6,538 8,000 7,000 6,400 Domestic Consumption 3,400 4,000 5,000 3,200 3,100 Ending Stocks 450 1,164 950 264 264 Total Distribution 11,350 11,702 13,950 10,464 9,764 HA, 1000 TREES, MT Export Trade Matrix Country Chile Commodity Almonds, Shelled Basis Exports for: 2010 2011 Time Period Jan-Dec Units: M.T. Units: Volume Value Volume Value U.S. 25 132 U.S. - - Others Others Brazil 1,428 5,914 Mexico 958 6,045 Mexico 1,381 6,049 Brazil 800 4,849 Argentina 977 3,845 Argentina 492 2,851 Italy 950 4,360 Spain 399 1,873 Spain 642 2,445 Venezuela 254 1,654 Venezuela 540 3,715 Colombia 179 1,201 U.Arab E. 357 1,453 Italy 113 729 Colombia 261 1,148 Netherlands 69 386 Turkey 243 1,024 Turkey 61 392 U.K. 174 757 Ecuador 60 411 Total for Others 6,953 3,385 Others not Listed 1,209 308 Grand Total 8,187 36,425 3,693 22,247 Note: 2010 data is from January through July only.
Posted: 12 October 2011

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