Tree Nuts Annual 2012

An Expert's View about Tree and Bush Fruits and Nuts in India

Posted on: 9 Oct 2012

Assuming normal market conditions, India is expected to import a record 80,000 tons of almonds (in-shell basis) in marketing year 2012/13 (August/July).

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: 9/28/2012 GAIN Report Number: IN2121 India Tree Nuts Annual 2012 Approved By: David Leishman Prepared By: Amit Aradhey Report Highlights: Assuming normal market conditions, India is expected to import a record 80,000 tons of almonds (in- shell basis) in marketing year 2012/13 (August/July). Indian walnut production is forecast at 35,000 tons (kernel weight basis), down 12.5 percent over the previous year. Increasing international demand for Indian walnuts will likely push exports to 14,000 tons, up 10 percent from last year. Commodities: Almonds, Shelled Basis Production: Assuming normal weather in the major growing regions of Kashmir and Himachal Pradesh, India’s almond production for Marketing Year (MY) 2012/13 (August/July) is forecast at 1,200 tons (kernel weight basis) due to a peak in the production cycle. Indian almond yields are typically low, ranging around 1,000 to 1,500 nuts per tree per year. Shelling rates also vary from 20 to 30 percent for hard shell varieties to about 40 percent for thin-shelled varieties. Consumption: Assuming normal market conditions, Indian almond consumption in MY 2012/13 is forecast to increase to 75,000 tons, 15 percent higher than the previous year. While almond prices were strong throughout MY 2011/12, consumption nevertheless grew as competing nuts remained relatively more expensive. Indian demand for nuts typically peaks during festive season, from September through January. Traditionally, almonds have been an integral part of Indian culture. Indian consumers buy almonds from different origins, indicating a willingness to explore new varieties beyond the traditional non- pareil. Growing awareness of the nutritional and health benefits of almonds has contributed to increased sales in snack foods, health products, and confectionary. In addition, there is also a growing demand for lower quality almond kernels used for oil extraction by the cosmetic and health care products industry. Indian consumers typically consider almonds to be a ‘high energy food, particularly ideally suited for children, physically active people 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 are preferred in regions of western and northwest India (e.g. Rajasthan and Gujarat), often commanding a higher price premium. Prices In MY 2011/12, the Indian rupee depreciated by more than 25 percent against the U.S. dollar. The depreciation had an effect on almond imports as domestic market prices remained firm during the first three quarters of 2011/12. Since August 2012, domestic almond prices have trended upward, reflecting upcoming festive demand. Figure 1. India: Average Wholesale Prices of Almonds (shelled) in Delhi Wholesale Market Source: Industry and trade sources Trade: In MY 2011/12, Indian almond imports reached a record 74,600 tons (in-shell basis), up 38 percent over the previous year. Strong domestic demand has driven the import California almonds. Assuming normal market conditions, Indian almond imports are forecast to reach 80,000 tons in MY 2012/13, up 7.2 percent from the previous year. Indian importers and traders have been building stocks since the beginning of the marketing year, and while export sales to date have been slower than expected, this will likely change as the festive season gets under way. U.S. almonds account for about 72 percent of India’s total import requirement. Australia, China, Afghanistan, Iran and Syria are also leading suppliers (Table 5). Non-traditional suppliers based from Italy, Malaysia, Thailand, South Korea, South Africa, Japan, and Taiwan can account for up to 10 percent of the market. Almond imports from the U.S. and Australia are mostly in-shell non-pareil or carmel varieties that are shelled locally; almonds from other origins are typically already shelled. In India, most almonds are sold by weight in loose form, and only about 5 percent of retail sales are in package form. 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, amended in 2006, requires an official phytosanitary certificate and phosphine fumigation at origin. As India has overtaken Germany, becoming the third largest export market for U.S. almonds (behind China and Spain), it is clear that there are still significant opportunities for further market development, particularly in southern and eastern India where more and more consumers are becoming aware of the health benefits of almond consumption. Production, Supply and Demand Data Statistics: Table 1: Commodity, Almond, PSD Table Almonds, Shelled Basis 2010/2011 2011/2012 2012/2013 India Market Year Begin: Aug Market Year Begin: Aug Market Year Begin: 2010 2011 Aug 2012 USDA SDA A Ol O Old New U ffici Po O Old New USD ffici st Post Po O d New ffici st Post Pos Post al al al t Area Planted 0 19,00 19,00 0 19,00 19,00 19,000 (HA) 0 0 0 0 Area Harvested 0 17,00 17,00 0 17,00 17,00 17,000 (HA) 0 0 0 0 Bearing Trees 0 1,160 1,160 0 1,160 1,160 1,160 (1000 TREES) Non-Bearing Trees 0 200 200 0 200 200 200 (1000 TREES) Total Trees 0 1,360 1,360 0 1,360 1,360 1,360 (1000 TREES) Beginning Stocks 0 11,93 11,93 0 15,13 13,13 23,833 (MT) 3 3 3 3 Production 1,200 1,200 1,200 1,100 1,100 1,100 1,200 (MT) Imports 52,200 60,00 54,00 60,000 65,00 74,60 80,000 (MT) 0 0 0 0 Total Supply 53,400 73,13 67,13 61,100 81,23 88,83 105,03 (MT) 3 3 3 3 3 Exports 0 0 0 0 0 0 0 (MT) Domestic 53,400 58,00 54,00 61,100 65,00 65,00 75,000 (MT) Consumption 0 0 0 0 Ending Stocks 0 15,13 13,13 0 16,23 23,83 30,033 (MT) 3 3 3 3 Total Distribution 53,400 73,13 67,13 61,100 81,23 88,83 105,03 (MT) 3 3 3 3 3 Commodities: Walnuts, Inshell Basis Production: Indian walnut production is expected to reach 35,000 tons (in shell basis) in MY 2012/13, down 12.5 percent from previous year. An extended winter in Kashmir during peak flowering period (April through May) had an adverse effect on production. Recent heavy rain in the Kashmir valley is unlikely to affect the crop size but may have some impact on quality. The typical harvesting season extends from August through September, but this year will carry into the first week of October, with market arrivals peaking later in the month. In India, walnuts are generally grown in the rocky terrains of Jammu and Kashmir, and to a lesser extent in Himachal Pradesh, Uttarakhand and the Northeastern India. Trees grow under rainfed conditions and geneally suffer from poor orchard management. Poor quality of planting material and the resulting uneven yields mean that a typical tree will produce somewhere between 18 to 50 kg /tree /year with nut sizes varying from 24 to 32 mm. With better economic prospects in growing apples or other fresh fruit, walnut cultivation has generally stagnated. 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. Consumption: Walnut consumption in MY 2011/12 is estimated to have reached 22,000 tons, with about 32 percent of domestic production dedicated to the export market. Assuming normal market conditions, walnut consumption is expected to grow to 25,000 tons in MY 2012/13. About 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 3 to 4 percent of walnuts (typically lower quality nuts) 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. The use of vacuum packs has improved the shelf-life and quality of walnuts, and has also encouraged consumer taste for ready-to- eat snacks. Major processing facilities for shelling and packing walnuts are located in State of Jammu and Kashmir. Prices Domestic walnut prices dropped more than 50 percent in MY 2011/12 as poor export demand led to an accumulation of domestic supply (Figure 2). Figure 2. India: Average Wholesale Prices of Walnuts (In shell) in Delhi Wholesale Market Source: Industry and trade sources Trade: Indian walnut exports are forecast to reach 14,000 tons in MY 2012/13 as export demand begins to recover. Traditional buyers (Europe, Egypt, China, United States, Kuwait, Australia, and United Arab Emirates) purchased 12,720 tons of Indian walnuts in My 2011/12 (Table 8). More than 95 percent of Indian walnuts are exported as kernels (35-40 percent light halves; 35-40 percent amber halves/light broken; and the balance as amber halves) in vacuum packs. Market sources report that the U.S., Mexico, Ukraine and Chile compete with Indian walnut exporters selling to the EU. Trade 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 in table 9) except for imports originating from the South Asian Association for Regional Cooperation (SAARC) countries and Afghanistan. Given the strength of Indian domestic production and the relatively high level of tariffs, walnut export opportunities to the Indian market are limited. Production, Supply and Demand Data Statistics: Table 2: Commodity, Walnut, PSD Table Walnuts, Inshell Basis 2010/2011 2011/2012 2012/2013 India Market Year Begin: Market Year Begin: Market Year Begin: Aug 2010 Aug 2011 Aug 2012 USD USD USD Ol A Old New A Old New A d New Offici Post Post Offici Post Post Offici Po Post al al al st Area Planted 0 36,6 36,6 0 36,6 36,6 36,6 (HA) 00 00 00 00 00 Area Harvested 0 30,8 30,8 0 31,0 31,0 31,0 (HA) 00 00 00 00 00 Bearing Trees 0 1,40 1,40 0 1,40 1,40 1,40 (1000 0 0 0 0 0 TREES) Non-Bearing 0 200 200 0 200 200 200 (1000 Trees TREES) Total Trees 0 1,60 1,60 0 1,60 1,60 1,60 (1000 0 0 0 0 0 TREES) Beginning Stocks 1,850 1,22 1,22 350 2,14 625 5,90 (MT) 5 5 5 5 Production 30,00 30,0 30,0 45,00 45,0 40,0 35,0 (MT) 0 00 00 0 00 00 00 Imports 0 100 100 0 0 0 0 (MT) Total Supply 31,85 31,3 31,3 45,35 47,1 40,6 40,9 (MT) 0 25 25 0 45 25 05 Exports 12,00 13,1 12,7 20,00 28,0 12,7 14,0 (MT) 0 80 00 0 00 20 00 Domestic 19,50 16,0 18,0 25,00 18,0 22,0 25,0 (MT) Consumption 0 00 00 0 00 00 00 Ending Stocks 350 2,14 625 350 1,14 5,90 1,90 (MT) 5 5 5 5 Total Distribution 31,85 31,3 31,3 45,35 47,1 40,6 40,9 (MT) 0 25 25 0 45 25 05 Author Defined: Table 3: Commodity, Almond, Prices Table Prices Table Country India Commodity Almonds, Shelled Basis Prices in Rupees per uom 100 Kg Year 2011 2012 % Change Jan 36300 38000 5 Feb 35300 38500 9 Mar 35700 39500 11 Apr 35400 40000 13 May 35000 43000 23 Jun 37300 40500 9 Jul 37800 40000 6 Aug 38700 41500 7 Sep 36000 -100 Oct 38000 -100 Nov 39000 -100 Dec 39500 -100 Exchange Rate Rs 55.42 Local Currency/US $ Date of Quote 9/7/2012 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 2011/12 MY 2010/11 MY 2009/10 California almonds 370-430 350-390 310-370 Mamra Almonds (Iran) 800-1200 650-1050 800-1100 Qumi Almonds (Iran) 450-600 350-450 500-550 Gulbandi Almonds (Afghan) 300-400 250-300 350 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: 2010 2011 U.S.A 48,196 U.S.A 54,078 ‘Others’ ‘Others’ Australia 3,912 Australia 6,481 Afghanistan 370 China 2,970 Syria 280 Afghanistan 1,287 Iran 324 Iran 753 China 603 Syria 782 Total for ‘Others’ 5,489 12,273 Others not Listed 303 8,283 Grand Total 53,988 74,634 Source: Estimates derived from official GOI sources (2010/11), trade sources (2011/12) and California Almond Board Statistics (2010/11 and 2011/12). Please note that the data available from trade sources were for 11 months. Table 6: Commodity, Walnut, Price Table Prices Table Country India Commodity Walnuts, Inshell Basis Prices in Rupees per uom 100 Kg Year 2011 2012 % Change Jan 19000 15000 21 Feb 19600 12000 39 Mar 20250 12000 41 Apr 21000 10000 52 May 21500 12000 44 Jun 21750 12500 43 Jul 22250 12500 44 Aug 23500 13000 45 Sep 20000 -100 Oct 18000 -100 Nov 17500 -100 Dec 17000 -100 Exchange Rate Rs 55.42 Local Currency/US $ Date of Quote 9/7/2012 MM/DD/YYYY Source: Trade and Industry sources (average week-end prices in the Delhi Wholesale Market) Table 7: Walnut Prices PRICE UNITS 2011/12 2010/11 2009/10 Wholesale Price of FAQ Walnut in Kashmir (Rs/Kg) 100-150 80-150 75-150 Export Price (C&F Europe) 1. Light Halves US$/MT 4000-9000 7500-11000 6000-8700 2. Light Broken/Amber Halves US$/MT 6800-8000 6800-10000 4300-6500 3. Amber Broken US$/MT 4500-7000 6000-9300 2800-5000 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: 2010 2011 U.S.A 165 U.S.A 233 ‘Others’ ‘Others’ France 1,570 Spain 1,785 Germany 1,528 Germany 1,658 Egypt 1,391 Netherland 1,438 Netherland 1,325 Egypt 1,405 Spain 1,290 United Kingdom 1,355 United Kingdom 1,031 France 1,078 China 423 Denmark 473 Denmark 383 UAE 375 Greece 350 Kuwait 342 Australia 350 Austrlia 335 Kuwait 270 Sweden 295 Nepal 250 Greece 283 Total for ‘Others’ 10,161 10,822 Others not Listed 2,372 1,665 Note: MY 2010 refers to Indian Fiscal Year (IFY) 2010/11 (April-March) as most exports happen during October through March. Source: MY 2010 - Export figures from DGCIS, Ministry of Commerce. MY 2011 - Provisional Trade Estimates Table 9: Almond and Walnut Tariffs Commodity Total Code Descript rt Basic Education ion Impo 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: 09 October 2012

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