Tree Nuts Annual

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

Posted on: 12 Oct 2011

India?s almond imports for the 2011/12 (August/July) marketing year are forecast to reach a record 65,000 tons (in-shell basis), with continuing strong demand for California almonds. Indian walnut production for MY 2011/12 (August/July) is forecast at 45,000 tons (kernel weight basis), up 50 percent over the previous year. Rising international demand for walnuts will likely push Indian walnut exports to a record 28,000 tons in MY 2011/12, up 115 percent from last year.

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: 9/16/2011 GAIN Report Number: IN1189 India Tree Nuts Annual 2011 Approved By: David Leishman Prepared By: Amit Aradhey Report Highlights: India?s almond imports for the 2011/12 (August/July) marketing year are forecast to reach a record 65,000 tons (in-shell basis), with continuing strong demand for California almonds. Indian walnut production for MY 2011/12 (August/July) is forecast at 45,000 tons (kernel weight basis), up 50 percent over the previous year. Rising international demand for walnuts will likely push Indian walnut exports to a record 28,000 tons in MY 2011/12, up 115 percent from last year. Commodities: Almonds, Shelled Basis Production: Assuming normal weather conditions, India?s almond production for Marketing Year 2011/12 (August/July) is forecast at 1,100 tons (kernel weight basis), down 8 percent from the previous year. Indian almonds yields are typically low, ranging from 1,000-1,500 nuts/tree/year. Shelling rates also vary from 20 to 30 percent for hard shell varieties to about 40 percent for thin-shelled varieties. Consumption: Given steady growth in domestic demand, Indian almond consumption for 2010/11 is estimated at 58,000 tons, up from 48,000 tons in the previous year. Assuming competitive prices and normal availability, Indian almond consumption for 2011/12 is forecast to reach 65,000 tons. Almonds are an integral part of the Indian culture, and continue to be one of the most preferred nuts in India. With increased willingness to try new varieties other than the traditional non-pareil, Indian consumers are buying almonds from different origins. Over the last few years, competitive prices (vis-à-vis other nuts), growing demand for confectionary, snack and health products, and an increasing awareness of the nutritional and health properties of almonds have driven consumer demand, particularly with the growing middle class. However, concerns over rising food inflation could affect sales during the Deepawli festive season, which traditionally is a period of peak sales. Almonds are widely perceived to be a ?high energy food,? especially recommended for children, athletes and recovering patients. Consumers have indicated a preference for Californian non-pareil almond variety due to price (Table 4), size, uniform ?eye? shape and sweetness. Australian non-pareil and carmel varieties also account for a growing segment of the market. Iranian varieties like Mamra/Qumi (an Iranian variety) are preferred in regions of western and northwest India (e.g. Rajasthan and Gujarat), often commanding a higher price premium. Prices Tight stocks and holiday demand have kept Indian domestic almond prices firm during first quarter of 2010/11. Increasing supplies have helped contain rising prices in the second and third quarter of 2010/11 (Chart 1); however almond prices are increasing again in the last quarter, reflecting increasing demand during the festive season (September, 2011 ?January, 2012). Chart 1: Average Wholesale Prices of Almonds (shelled) in Delhi Wholesale Market Source: Industry and trade sources Trade: India?s almond imports for 2010/11 are estimated at 60,000 tons (in-shell basis), up 29 percent over the previous year. Assuming normal weather and stable exchange rates, Indian almond imports in 2011/12 are forecast to grow by 5,000 tons to 65,000 tons. Trade data for the first five months of 2010/11 (Table 5) indicate increasing imports of U.S. almonds, while import growth from other countries like Australia, Afghanistan, Syria, Iran, and China have slowed. Imports from the U.S. and Australia are mostly in-shell non-pareil, carmel and other varieties that are shelled locally. Imports from other origins are mostly shelled almonds. In India, most almonds are sold by weight in loose form. Only about 5 percent of almond retail sales are in package form. Policy: Trade Policy & Marketing Opportunities While there are no quantitative restrictions on imports, U.S almonds face a Rs 35/kg tariff for inshell almonds and a Rs. 66.95/kg for shelled almonds (Table 9). India?s Plant Quarantine Order 2003 and as amended in 2006 requires an official phytosanitary certificate and phosphine fumigation at origin. India is the fourth largest export market for California almonds (after Spain, China and Germany). As more consumers become aware of health benefits of almonds, there are increasing opportunities for market development in southern and eastern India. Production, Supply and Demand Data Statistics: Table 1: Commodity, Almonds, Shelled Basis, PSD 2009/2010 2010/2011 2011/2012 Almonds, Shelled Basis, Market Year Begin: Aug Market Year Begin: Aug Market Year Begin: India 2009 2010 Aug 2011 USDA New USDA New USDA O New Post fficial Post Official Post Official Area Planted 19,000 19,000 0 19,000 19,000 (HA) Area Harvested 17,000 17,000 0 17,000 17,000 (HA) Bearing Trees 1,150 1,150 0 1,160 1,160 (1000 TREES) Non-Bearing Trees 210 210 0 200 200 (1000 TREES) Total Trees 1,360 1,360 0 1,360 1,360 (1000 TREES) Beginning Stocks 0 12,275 0 11,933 15,133 (MT) Production 1,200 1,100 1,000 1,200 1,100 (MT) Imports 42,100 46,558 50,000 60,000 65,000 (MT) Total Supply 43,300 59,933 51,000 73,133 81,233 (MT) Exports 0 0 0 0 0 (MT) Domestic Consumption 43,300 48,000 51,000 58,000 65,000 (MT) Ending Stocks 0 11,933 0 15,133 16,233 (MT) Total Distribution 43,300 59,933 51,000 73,133 81,233 (MT) TS=TD 0 0 0 Commodities: Walnuts, Inshell Basis Production: Indian walnut production has reached a peak in the production cycle. Assuming normal weather conditions, walnut production is expected to reach a record 45,000 tons (in shell basis) in 2011/12 (August/July), a 50 percent increase from the last year. However, adverse weather conditions could always lower the crop estimate by 5 to 20 percent, as reflected in last year?s (2010/11) production. A combination of heavy rains during the peak flowering phase coupled with abnormal weather conditions through August, 2010, reduced production by about 30,000 tons. India?s walnut production areas are concentrated in Jammu and Kashmir, and to a lesser extent in Himachal Pradesh, Uttarakhand and the Northeast. A lack of high yielding varieties, long gestation periods, poor orchard management, and uneven yields (estimated at 18-50 kg /tree /year with nut sizes varying from 24-32 mm) have kept walnut production almost stagnant. Better revenues from apples and fresh fruit orchards have limited the development of additional cultivation area for walnuts. Indian walnuts are classified as hard, medium or thin shell (kaghazi) and the average shelling rate is approximately 40 percent. The typical harvest season runs from the end of August through September, with market arrivals peaking in late October. Consumption: Walnut consumption in 2010/11 is estimated at 16,000 tons, slightly lower than expected; as more production was diverted to export. Assuming stable supplies and prices, consumption in 2011/12 is forecast at 18,000 tons. Normally 40 to 50 percent of Indian walnut production is consumed domestically, of which nearly half is consumed during the festive season (September-January). An estimated 10 percent of domestic consumption goes to the bakery, confectionary and ice-cream industries. Roughly 2 to 3 percent of walnuts (typically nuts that are already rancid) are used for oil extraction by soap and cosmetic manufacturers. Typically, walnuts are consumed domestically in raw form for snacking purposes. A growing awareness of the health benefits of walnuts, along with a wider use of attractive consumer packaging (vacuum packs), has prompted Indian consumers to buy walnuts year round. Major processing facilities for shelling and packing walnuts are located in State of Jammu and Kashmir. Prices The domestic prices of walnuts during the festive season (September, 2010 to January, 2011) were relatively flat, but up 32 percent compared to corresponding period last year (Chart 2). Strong export demand coupled with short domestic supply kept walnut prices firm during latter part of 2010/11. Chart 2: Average Wholesale Prices of Walnuts (In shell) in Delhi Wholesale Market Source: Industry and trade sources Trade: Indian walnut exports are forecast to reach 28,000 tons in 2011/12 as domestic supplies will be sufficient to meet both export and domestic demand. Despite a short crop in 2010/11, strong international demand from Europe, Egypt, Greece, China, the U.S, Kuwait, Australia, and United Arab Emirates (Table 8) pushed up Indian walnut exports to 13,000 tons. More than 95 percent of Indian walnuts are exported as kernels (40 percent light halves; 40 percent amber halves/light broken; and the balance as amber halves) in vacuum packs. Market sources report that the U.S. (California), Mexico, Ukraine, Chile and China are the major competitors to the Indian walnuts in the EU. Policy: Walnuts are imported into India without quantitative restrictions under the Open General License (OGL). Imports are subject to an effective import duty of 30.9 percent (see tariff table 9) except for imports originating from the South Asian Association for Regional Cooperation (SAARC) countries and Afghanistan. Given a strong domestic production and relatively high tariffs, there are only limited opportunities for importing walnuts. Production, Supply and Demand Data Statistics: Table 2: Commodity, Walnut, Inshelled Basis, PSD Wa 2009/2010 2010/2011 2011/2012 lnuts, Inshell Basis, Market Year Begin: Aug Market Year Begin: Aug Market Year Begin: India 2009 2010 Aug 2011 USDA New USDA New USDA O st fficial Post Official Post O New Pofficial Area Planted 36,600 36,000 0 36,600 36,600 (HA) Area Harvested 30,800 30,800 0 30,800 31,000 (HA) Bearing Trees 1,400 1,380 0 1,400 1,400 (1000 TREES) Non-Bearing Trees 200 220 0 200 200 (1000 TREES) Total Trees 1,600 1,600 0 1,600 1,600 (1000 TREES) Beginning Stocks 3,850 3,850 1,850 1,225 2,145 (MT) Production 37,000 36,000 40,000 30,000 45,000 (MT) Imports 0 0 0 100 0 (MT) Total Supply 40,850 39,850 41,850 31,325 47,145 (MT) Exports 22,500 22,125 25,000 13,180 28,000 (MT) Domestic Consumption 16,500 16,500 16,500 16,000 18,000 (MT) Ending Stocks 1,850 1,225 350 2,145 1,145 (MT) Total Distribution 40,850 39,850 41,850 31,325 47,145 (MT) TS=TD 0 0 0 Author Defined: Table 3: Commodity, Almond, Prices Table Prices Table Country India Commodity Almonds, Shelled Basis Prices in Rupees per uom 100 Kg Year 2010 2011 % Change Jan 37000 36300 -2 Feb 36800 35300 -4 Mar 39500 35700 -10 Apr 35000 35400 1 May 37500 35000 -7 Jun 35000 37300 7 Jul 35500 37800 6 Aug 37000 38700 5 Sep 37600 Oct 37000 Nov 36500 Dec 36000 Exchange Rate Rs 48.32 Local Currency/US $ Date of Quote 9/10/2010 MM/DD/YYYY Source: Trade and Industry sources (average week-end prices in the Delhi Wholesale Market). Table 4: Wholesale Almond Kernel Prices (Rs/Kg), Delhi Market Type (Origin) MY 2010/11 MY 2009/10 MY 2008/09 California almonds 350-390 310-370 325-350 Mamra Almonds (Iran) 650-1050 800-1100 1000-1200 Qumi Almonds (Iran) 350-450 500-550 400-500 Gulbandi Almonds (Afghan) 250-300 350 375-425 Source: Trade sources Table 5: Commodity, Almond, Import Trade Matrix Import Trade Matrix Country India Commodity Almonds, Shelled Basis Time Period Aug/July Units: Metric Tons Imports for: 2009 2010 U.S.A 38,151 U.S.A 35,573 ?Others? ?Others? Australia 4,155 Australia 2,442 Afghanistan 1,920 Afghanistan 753 Syria 905 Iran 694 Iran 697 China 347 China 403 Syria 238 Total for ?Others? 8,080 4,474 Others not Listed 327 119 Grand Total 46,558 40,166 Source: Estimates derived from official GOI sources (2009/10), trade sources (2010/11) and California Almond Board Statistics (2009/10 and 2010/11). Please note that trade data for 2010 are only for the period (September, 2010 through January 2011) for which data was available. Table 6: Commodity, Walnut, Price Table Prices Table Country India Commodity Walnuts, Inshell Basis Prices in Rupees per uom 100 Kg Year 2010 2011 % Change Jan 15000 19000 27 Feb 15000 19600 31 Mar 15000 20250 35 Apr 16000 21000 31 May 16000 21500 34 Jun 16500 21750 32 Jul 17000 22250 31 Aug 18000 23500 31 Sep 18000 Oct 18000 Nov 18200 Dec 19500 Exchange Rate Rs 48.32 Local Currency/US $ Date of Quote 9/10/2010 MM/DD/YYYY Source: Trade and Industry sources (average week-end prices in the Delhi Wholesale Market). Table 7: Walnut Prices PRICE UNITS 2010/11 2009/10 2008/09 Wholesale Price of FAQ Walnut in Kashmir (Rs/Kg) 80-150 75-50 40-80 Export Price (C&F Europe) 1. Light Halves US$/MT 7500-11000 6000-8700 4500-8000 2. Light Broken/Amber Halves US$/MT 6800-10000 4300-6500 3000-6000 3. Amber Broken US$/MT 6000-9300 2800-5000 2200-5000 Source: Market Sources Table 8: Commodity, Walnut, Export Trade Matrix Export Trade Matrix Country India Commodity Walnuts, In Shell Basis Time Period April-March Units: Metric Tons Exports for: 2009 2010 U.S.A 180 U.S.A 321 Spain 2330 France 1,504 Egypt 2260 Netherlands 1,374 China 2223 Spain 1,372 United Kingdom 2207 Germany 1,368 France 2138 Egypt 1,342 Germany 1755 United Kingdom 1,006 Netherlands 1319 Greece 424 Greece 983 China 390 United Arab Emirates 845 Denmark 355 Hong Kong 843 Kuwait 325 Kuwait 538 Australia 296 Italy 450 United Arab Emirates 273 Total for ?Others? 17,889 10,028 Others not Listed 4,058 2,831 Grand Total 22,127 13,180 Note: MY 2009 refers to Indian Fiscal Year (IFY) 2009/10 (April-March) as most exports happen during October through March. Source: MY 2009 - Export figures from DGCIS, Ministry of Commerce. MY 2010 - Provisional Trade Estimates Table 9: Almond and Walnut Tariffs Commodity Import Basic Education Total Co Description de Policy Duty/2 Cess Applicable Duty /5 HC 0802.11 Almonds Inshell OGL /1 Rs 35/kg Exempted /3 Rs 35/kg HC 0802.12 Almond Kernel OGL /1 Rs 65/kg 2+1% Rs. 66.95/kg HC 0802.31 Walnut Inshell OGL /1 30/20% /4 2+1% 30.9/20.6% /4 HC 0802.32 Walnut Shelled OGL /1 30/20% /4 2+1% 30.9/20.6% /4 Notes on Tariff: /1: OGL (Open General License) ? no quantitative restrictions. /2: Under the Indo Afghan Preferential Trade Agreement, a tariff concession of 50 percent is applied on the basic import duty for these goods if imported from Afghanistan. /3: Almonds in-shell are exempted from the education cess. /4: Preferential duty for SAARC countries (Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan). /5: Method for computing Total applicable duty: A: CIF Value of Good B: Basic Duty = Basic Duty Rate * A C: Education Cess (EC) = EC Rate * B Total Applicable Duty = B+C
Posted: 12 October 2011

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