Italy Tree Nuts 2011

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

Posted on: 31 Oct 2011

The Italian tree nuts sector has experienced significant restructuring over the last decade, which has reduced both planted areas and production and eroded Italy’s share of world production. sources estimate MY 2011/12 Italian tree nut production at 3,100 MT for pistachios, 5,000 MT for almonds, 10,500 MT for walnuts, and 110,000 MT for hazelnuts.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 10/5/2011 GAIN Report Number: IT1148 Italy Post: Rome Italy Tree Nuts 2011 Report Categories: Tree Nuts Approved By: Jim Dever Prepared By: Stefano Baldi Report Highlights: The Italian tree nuts sector has experienced significant restructuring over the last decade, which has reduced both planted areas and production and eroded Italy?s share of world production. sources estimate MY 2011/12 Italian tree nut production at 3,100 MT for pistachios, 5,000 MT for almonds, 10,500 MT for walnuts, and 110,000 MT for hazelnuts. 40% 1961-1964 35% 140 1976-1979 30% 120 1996-1999 25% 2006-2009 Almonds 100 20% Hazelnuts 80 Walnuts 15% 60 10% General Information: The Italian tree nuts sector has experienced sign4ificant restructuring 0over the last decade, which has reduced both planted areas and production and eroded Italy?s share of world production. This restructuring is mainly due to a lack of organization among farmers, decreasing investments, strong competition from other countries, incl5uding the United St%ates. As a result, Italy is no longer self-sufficient in nut production but has become a net tree nuts importer. [Note: This report uses planted area data from the National Bureau of Statistics (ISTAT) even though most traders believe ISTAT data over estimates area due to the ongoing unreported uprooting of the oldest, less productive trees, while the planting of new orchards remains minimal.] Italian Tree Nuts Production Share on World Production 20 0% Almonds Hazelnuts Pistachios Walnuts 0 *Values refer to in-shell production. Source: FAOSTAT. Tree Nuts Harvested Area Trend (1961=100) Source: FAOSTAT. 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Italians generally consume during the winter months following the harvest. Nuts are especially popular during Christmas in sweets and bakery products. Unpackaged sales comprise a small part of overall nut sales I. PISTACHIOS Production, Supply and Demand (ha, MT) 2009/2010 2010/2011 2011/2012 Pistachios, In shell Basis MY Begin: Sep 2009 MY Begin: Sep 2010 MY Begin: Sep 2011 Current post data Current post data Current post data Area Planted 3.537 3.600 3.650 Area Harvested 3.515 3.550 3.590 Beginning stocks 200 800 200 Production 3.109 2.500 3.100 Imports 11.603 11.000 10.800 Total Supply 14.912 14.300 14.100 Exports 721 830 900 Domestic consumption 13.391 13.270 13.000 Ending stocks 800 200 200 Total Distribution 14.912 14.300 14.100 Sicily, especially the Bronte area, produces more than 90 percent of Italy?s pistachio nuts. The majority of Italian pistachios are the Bianca variety (also called Napoletana), which is normally harvested in September. Pistachios from the Bronte area are sold under a PDO (Protected Designation of Origin) label issued by the EU Commission in 2010. To qualify as a PDO product, farmers must follow specific production methods, which guarantee a high quality level but also higher harvesting costs. In recent years, pistachio production has slightly expanded to other areas in Sicily, where newer, less labor and input intensive orchards have been planted. Production Pistachio trees production is cyclical, bearing heavily in alternate years. MY 2011/12 will be a higher bearing year, with production estimated at 3,100 MT. Despite relatively abundant harvest, domestic demand is expected to be sufficiently strong to maintain prices at high levels (?30- 40/kg). Consumption Italian in-shell pistachios are consumed as a snack food; shelled pistachios are used by bakeries and food companies, while milled pistachios are mainly used by ice-cream makers. In MY 2011/12, pistachio consumption is expected to level off at about 13,000 MT. Trade Italian pistachios production is not sufficient to cover domestic demand resulting in significant imports from Iran (via Germany and Belgium) and the United States MY 2011/12 imports are expected to decline slightly because of the larger domestic harvest. Shelled almonds In-shell almonds 1.3 3.25 1.2 3 2008 2008/2009 2009/2010/2009 2009/2010 II. ALMONDS Product 10/ 11 11/ 2ion, Supply and Demand (Ha, MT) 2010/2011 2011/2012 2009/2010 2010/2011 2011/2012 Almonds, Shelled Basis MY Begin: Sep 2009 MY Begin: Sep 2010 MY Begin: Sep 2011 Current post data Current post data Current post data 1.1 A .75rea Planted 79.562 77.098 75.000 Area Harvested 79.464 75.917 73.500 Beginning stocks 1.000 1.000 1.000 Production 6.000 6.000 5.000 Imports 29.719 33.000 33.500 Total Supply 36.719 40.000 39.500 Exports 6.191 6.500 5.500 Domestic consumption 29.528 32.500 33.000 Ending stocks 1.000 1.000 1.000 Total Distribution 36.719 40.000 39.500 Production M Y 2011/12 almond production is expected to decrease from the previous year to around 5,000 2 1.5 MT. Due to strong competition from competitively priced Californian almonds, almond cultivation in Italy is becoming less and less profitable. Almond orchards are often located in less favored areas, where mechanization is not always feasible, additionally, old orchards, lack of investments and traditional production techniques have not allowed for high and constant yields over the years. Moreover, due to decreasing profitability, many farmers have been abandoning this crop or shifting to other crops (e.g., citrus fruit, wine grapes, horticultural products) that allow them to earn higher margins. For these reasons, planted area is forecast to further decline in the future. Italian Almonds Farm Gate Price Trend (?/kg) 2.25 0.9 SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG Source: Ismea. Consumption MY 2011/12 almond consumption is forecast to remain stable. In-shell almonds are mainly sold for fresh consumption. Shelled almonds are milled and used by the confectionery industry and bakeries, especially companies producing ?confetti? (traditional sugarcoated almonds). Trade MY 2011/12 almonds imports are forecast to increase because of competitively priced almonds coming from the United States and Spain. Italy exports its almond production to Northern European markets (mainly Germany, France, and the UK). Italian Shelled Almonds Imports (MT) 2008/2009 2009/2010 Sep/Jun 2009/2010 Sep/Jun 2010/2011 EU-27 8,202 11,859 10,628 11,381 Spain 4,779 9,570 8,568 9,217 Germany 1,238 880 729 798 UK 1,167 563 546 401 Netherlands 215 369 324 158 Extra EU-27 17,271 17,500 15,436 17,025 United States 15,864 16,767 14,797 16,157 World 25,473 29,359 26,064 28,406 Source: GTA. III. WALNUTS Production, Supply and Demand (Ha, MT) 2009/2010 2010/2011 2011/2012 Walnuts, In shell Basis MY Begin: Oct 2009 MY Begin: Oct 2010 MY Begin: Oct 2011 Current post data Current post data Current post data Area Planted 4,000 4,100 4,000 Area Harvested 3,500 3,600 3,500 Beginning stocks 2,000 300 2,000 Production 12,000 14,000 10,500 Imports 38,373 40,500 42,000 Total Supply 52,373 54,800 54,500 Exports 4,419 4,600 4,500 Domestic consumption 47,655 48,200 49,000 Ending stocks 300 2,000 1,000 Total Distribution 52,373 54,800 54,500 Italy lost its walnut market leadership a few decades ago and is now a major importer, mainly from the United States. Most walnuts are cultivated in southern Italy (i.e., the Campania region), where the main varieties are Sorrento and Malizia. Because farmers generally grow walnut trees for both timber and nuts, nut yields and quality have suffered. Higher input costs and lower prices have negatively affected crop profitability. As a result, Italian walnut production supplies about 20 percent of domestic requirements and the remainder is imported. Some farmers in northern have established efficient and profitable walnut orchards, where orchards planted with the Chandler and Lara varieties yield about 4.2 MT/ha (in shell, dried). Production The MY 2011/12 walnut harvest is forecast at about 10,500 MT. On average, quality is expected to be good despite some quality problems (dried and shrunken kernels) due to hot weather. Experts estimate that normally around 25 percent of northern harvest is only suitable for processing. At the beginning of MY 2011/12, farm gate prices ranged from ?1.5 per kg for the Sorrento variety to ?4.8 per kg for the Lara variety. In general, prices are forecast to remain stable due to growing demand from China. Consumption MY 2011/12 walnut consumption is expected to remain stable at approximately 49,000 MT. In- shell and shelled walnuts for fresh consumption are mainly purchased during the winter months. However, more consumers are increasingly purchasing walnuts all year round due to their perceived nutritional benefits. According to a recent survey, walnuts account for more than 16 percent of total Italian large retailers? tree nuts sales. Trade Italy mainly imports in-shell walnuts (mainly the Hartley variety) from the United States until June. After June, walnuts are imported mainly from South America (Chile and Argentina) and Australia. France is also a major supplier to the Italian market. Additionally, new suppliers, such as Ukraine and Bulgaria, have been gradually increasing their walnuts shipments to Italy for the last three years. Italian in-shell Walnuts Imports (MT) 2008/2009 2009/2010 Oct/Jun 2009/2010 Oct/Jun 2010/2011 EU-27 3,376 5,775 5,679 6,233 France 2,592 4,788 4,724 5,187 Germany 315 428 404 310 Extra EU-27 16,051 18,202 16,443 17,989 United States 12,861 14,640 14,555 15,758 Chile 2,284 1,798 523 597 Argentina 827 1,019 799 1,019 World 19,427 23,977 22,122 24,222 Source: GTA. IV. HAZELNUTS Production, Supply and Demand (ha, MT) 2009/2010 2010/2011 2011/2012 Hazelnuts, In shell Basis MY Begin: Sep 2009 MY Begin: Sep 2010 MY Begin: Sep 2011 Current post data Current post data Current post data Area Planted 72,039 70,464 70,000 Area Harvested 70,526 67,270 68,000 Beginning stocks 23,000 12,000 10,000 Production 95,000 90,000 110,000 Imports 61,826 77,000 62,000 Total Supply 179,826 179,000 182,000 Exports 32,687 24,000 30,000 Domestic consumption 135,139 145,000 145,500 Ending stocks 12,000 10,000 6,500 Total Distribution 179,826 179,000 182,000 Italy is the second largest hazelnut producer in the world (13.5 percent of total output) ahead of the United States but behind Turkey, whose huge supply dominates the world market. Italian hazelnut producers have increasingly improved their production techniques (irrigation, fertilization, pesticide use, and mechanization) enhancing yield and maintaining Italy?s competitiveness in the world market. The average farm net revenue fluctuates between ?2,500 and 3,000/ha. Hazelnut production is spread around Italy with concentrations in the Piedmont region in the north, Viterbo province in the center, and the Sicily region, and Avellino province in the south. Production MY 2011/12 hazelnut production is forecast to increase sharply from the previous year to 110,000 MT. Although planted area is expected to remain stable, Italian hazelnuts growers should enjoy an excellent crop thanks to good temperatures (no major frosts occurred) and timely rains during the season. The production increase is also due to the cyclical swings in yields and MY 2011/12 is supposed to be an abundant year. Prices are expected to increase to ?23-24 per MT due to a lower harvest in Turkey. Consumption MY 2011/12 hazelnut consumption is forecast at 136,000 MT, slightly lower than in MY 2010/11. Hazelnuts in Italy are sold both in-shell and shelled. In-shell hazelnuts are generally sold as a snack for fresh consumption while shelled ones (both whole and milled nuts) are usually used as a raw material for confectionary and bakery food companies. Furthermore, low quality shelled hazelnuts are often used by cosmetic companies. Approximately 90 percent of the Italian harvest goes to processing companies whereas fresh consumption represents the remaining 10 percent. Trade The MY 2011/12 hazelnuts trade balance is expected to improve slightly due to the enhanced domestic harvest. Figures show a stable trend over the years, with imports of shelled hazelnuts mainly imported from the world leader Turkey and but also increasingly from Azerbaijan and Georgia. Exports of shelled products are destined to Germany, France, and Switzerland. Policy In May 2011, the Italian Ministry of Agriculture allocated ?12 million to the tree nuts sector. This amount represents Italy?s co-financing of EU area payments, which will be on average 241.5 ?/ha. Around 90,000 hectares cultivated with tree nuts could benefit from these payments. Quan Valuetity Walnuts Other Other 16% nuts/dried Walnuts nuts/dried Shelled pine fruit 20% fruit seeds 17% 17% 2% Toasted Shelled pine Pumpkin seeds seeds Peanuts 12% 2% 13% Hazelnuts Toasted 3% Pumpkin Peanuts Almonds seeds 20% 6% 2% Prunes Hazelnuts Toasted 12% 4% Pistachios Marketing Almonds Producers and nutritionist have promoted widely the tree nuts consumption in Italy for the last few years highlighting nuts perceived nutritional and health benefits, despite their high fat content. According to a recent Synphony IRI Group (a market research company) survey, tree nuts consumption increased by 12.3 percent between 2007 and 2009. Nevertheless, industry 7% representatives believe tree nuts consumption remains negligible as only 45 percent of the Italian households consume tree nuts at least once a year. 8% Large retailers, which have increasingly focused on consumer nut sales, are now responsible for about 95 percent of this market. However marketing strategies are not always well targeted and there is still room for improvements. Da Toasted tes and figs Prunes Italian Large Retailers Tree Nuts Sales by Product (2010) Dates and figs 10% Pistachios 13% 7% 10% Source: Nucis Workshop (Italy, 2011). Abbreviations and Definitions Used in this Report Conversion factors used to convert shelled to in-shell tree nuts: Almonds: 3.3 Hazelnuts: 2.03 Walnuts: 3.3 Pistachios: 1.5 HS Codes: Almonds: Shelled 080212; In-shell 080211 Walnuts: Shelled 080232; In-shell 080231 Filberts/Hazelnuts: Shelled 080222; In-shell 080221 Pistachios: 080250 Ha hectare; 1 ha = 2.471 acres MT Metric ton = 1,000 kg MS EU member state(s) MY Marketing Year Almonds, Hazelnuts and Pistachios: September/August Walnuts: October/September
Posted: 31 October 2011

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