Report Highlights: 

The United States is the most important supplier of nuts to the European Union, which imported $2.3 billion of tree nuts in 2013, of which $1.4 billion were almonds. Therefore the lifting of the special EU Import Conditions for U.S. Almonds effective September 3, 2014 is excellent news. With the removal of special import conditions for U.S. almonds, the presence of a VASP (Voluntary Aflatoxin Sampling Plan) certificate will no longer be a pre-condition for import into the EU. However, the Almond Board of California encourages continued use of VASP certificates.

Abbreviations and definitions used in this report 

Conversion factors: conversion factor is used to convert shelled to in-shell tree nuts. 

Almonds: 0.6 

Walnuts: 2.34 

Pistachios: 2.0 

GTA Global Trade Atlas 

Ha hectare; 1 ha = 2.471 acres 

HS Codes: Harmonized System codes for commodity classification used to calculate trade data. 

Almonds: Shelled 080212; In-shell 080211 

Walnuts: Shelled 080232; In-shell 080231 

Pistachios: 080250 (until December 2011); In-shell 080251, Shelled 080252 (since January 2012) 

MT Metric ton = 1,000 kg 

EU MS European Union Member State(s) 

MY Marketing year 

Almonds: September/August 

Walnuts: October/September 

Pistachios: September/August 

USD U.S. Dollar (Exchange rate at time of publishing €1=US$ 1.32) 

Executive Summary: 

US and EU: important trading partners 

In 2013, the EU was the primary export destination for U.S. tree nuts, closely followed by East Asia. The most important destinations for U.S. tree nuts in 2013 were: the EU-28 (31 percent), East Asia (30 percent), Middle East (11 percent), North America (10 percent) and the South Asia (5 percent). Within the EU, the most important trade partners for US tree nuts are in order of importance Spain, Germany and the Netherlands. It is interesting to note that East Asia includes Hong Kong and China, which jointly account for 21 percent of total U.S. tree nut exports. 

Last year, EU-28 imports of tree nuts totaled 754,653 MT. The US continues to be the largest supplier by far, with almost 40 percent of the market share. Turkey ranks second with a market share of 15 percent, followed by Vietnam, the Philippines and India. Almost 30 percent of EU tree nuts total imports concern the import of almond and another 17 percent hazelnuts. The US is especially an important trade partner to the EU for supplying almonds, pistachios and walnuts where the US has a market share of respectively 91, 73 and 55 percent. 

Food processing and snack industry are key buyers of tree nuts 

The European food processing and snack industry are the large users of tree nuts. Almonds are mainly used as an ingredient for producing marzipan, nougat, turron (Spanish typical Christmas confection) and many other pastries and sweets. They are also used to manufacture almond butter and paste. Hazelnuts are mainly used in confectionary to make praline and also, in combination with chocolate, for chocolate truffles. Due to the fact that hazelnut oil is strongly flavored and the kernels of walnuts are rich in oil, both are often used for manufacturing cooking oil. Pistachio nuts are used as an ingredient for manufacturing ice cream and confectionary products (such as baklava and mortadella). 

When roasted, salted or mixed, tree nuts are a popular snack. Due to changing lifestyles, people are more and more realizing that nuts can be enjoyed at various occasions and different places. Dinner for instance offers potential for tree nuts, where they can be used as an ingredient and as garnish due to their taste, quality, versatility and convenience. 

The pressure of recession is pushing snack companies to be more creative and innovative, adding exotic and new flavors combinations and to increase the use of premium packaging. Due to the mature European market, manufacturers will likely focus their strategies on launching new value-added innovative products rather than volume sales. 

Expanding business in EU market 

Since the EU is an important market for US tree nuts, exporters are exploring ways to expand their overseas business. Trade shows are an excellent opportunity both to know the market and to meet potential importers. Some of Europe’s leading trade shows for tree nuts are: Fruit Logistica in Berlin, Germany; Alimentaria, in Barcelona, Spain; Sial in Paris, France or Anuga in Cologne, Germany. Other important interesting shows include Food Ingredients, Health Ingredients, Vitafoods, PLMA Amsterdam and Biofach. Finally, it would be advisable for new-to-the-market exporters to have a look at the EU-28 Food and Agricultural Import Regulations and Standards report and Exporter Guides produced at the various EU FAS Offices. 

US cooperators active in the EU 

Trade associations like the Almond Board of California, the California Pistachio Export Council, Western Pistachio Association/CalPure Pistachios and California Walnut Commission are extremely active in the EU market. These trade associations, or so-called cooperators, in cooperation with FAS offices all over Europe, continuously work to further develop the market for tree nuts. 

Almonds, Shelled Basis

Production: 

The EU is one of the world’s leading producers and consumers of almonds. In terms of origin, the United States is by far the largest producer. California is responsible for approximately 80 percent of world’s almond production and 100 percent of the U.S. supply. Annually, California production is exported to 90 countries worldwide, and the EU-28 represents approximately one third of California’s almond exports. 

Spanish production has historically fluctuated greatly and is not expected to increase its production significantly in the long term. This is due mainly to the declines in EU agricultural support programs and the continuing urbanization of traditional production areas. Furthermore, farmers complain that the almond crops are less profitable each year due to the pressure coming from the California almonds and tend to abandon less profitable crops in search for more profitable ones. 

For MY 2014/15, the latest official forecast published by the Ministry of Agriculture, Food and Environment (MAGRAMA) shows an estimated production figure of 54,848 MT (shelled basis), an increase of 21 percent compared to previous year’s crop. This sharp increase is due to the fact that last year’s production figure was the lowest since 2004, but the long term trend will continue to be limited to no new plantings. 

According to the MAGRAMA statistics, the main producing regions have increased their production figures compared to previous marketing year. Aragon (+78 percent) Andalucia (+47 percent), Catalonia (+47 percent) and Castilla-La Mancha (+18 percent). 

Italy’s MY 2014 almond production is forecast to increase significantly from the previous year to approximately 7,000 MT. Quality is expected to be exceptional. However, due to strong competition from competitively priced Californian and Australian almonds, cultivation in Italy has become less profitable. Therefore, many farmers have been abandoning this crop or shifting to more rewarding cultivations (i.e., citrus fruit, wine grapes, horticultural products). Furthermore, almond orchards are often located in areas where mechanization is not always feasible. For all these reasons, planted area is forecast to further decline in the years to come. 

Consumption: 

Almonds represent an important component of the Mediterranean diet. In-shell almonds are mainly sold for fresh consumption. Shelled almonds are milled and generally used as a raw material for confectionary and bakery food companies. 

Traditionally almonds are characterized by their good taste and high quality and are regarded as a healthy snack. Consumption patterns depend on factors such as dietary habits, income level and tradition. EU almond consumption absorbs not only domestic production, but also imported quantities. Tree nuts imports are indispensable for EU consumers. 

Trade: 

Imports 

In MY 2012/13, the percentage of almonds originating in the United States is extremely high, making the U.S. the number one almond supplier to Europe. U.S. almonds face competition in the EU from locally grown almonds, particularly from Spain. U.S. almonds will likely continue to enter the EU market with highly competitive prices. 

The major EU-28 importers of U.S. almonds by volume are Spain, Germany and the Netherlands in this order. Almond imports are mainly destined for the confectionary, ice cream and chocolate industries. 

Nut crops are less perishable than other fruits. Therefore, in many countries, almond imported quantities are destined not only for domestic consumption, but - after being stored, processed, and packaged - they are re-exported to third countries throughout the year. 

Exports 

The top destinations for EU-28 almonds in MY 2012/13 were the United States, Switzerland and Ceuta (an Autonomous city of Spain in the North of Africa). The largest almond exporter is Spain and Spanish exports are destined mainly for other EU MS, though there has been a significant increase of Spanish exports of almonds to the United States since 2011. 

Walnuts, Inshell Basis

Production: 

In France, production and exports are increasing on the long run: exports rose by 70 percent in ten years. The vast majority of walnuts produced in France are exported in-shell. However, France is a net importer of shelled walnuts. Due to high domestic processing costs, some French walnuts are shelled abroad then imported back. Imports and consumption of shelled walnuts are on an upward trend. 

Walnut production is increasing on the long run, and export is by far the main outlet. Average production increased by 37 percent in ten years (2011-2013 vs 2001-2003), and in 2013, 80 percent of total production was exported in-shell (26,766 MT). In 2013, as in the previous years, the bulk of exports was directed to the EU (88 percent), mainly to Italy (31 percent of total exports), Spain (27 percent) and Germany (17 percent). 

Walnuts intended for processing are believed to represent seven to ten percent of the production. Most of them are exported to Moldova in-shell, then imported back, shelled. In 2013, 6 percent of the production was exported to Moldova in-shell. This country remained the leading market outside of the EU. In the first half of 2014, French exports of in-shell walnuts were 9 percent lower than in the first half of 2013, but destinations remained the same. For MY 2014/15, the walnut harvest production figure for France is expected to reach 35,000 MT, an average production. 

Italy’s MY 2014 walnut harvest is forecast to stay flat at approximately 10,000 MT. Quality is expected to be good. Italy lost its walnut market leadership a few decades ago and now is a major importer, mainly from the United States. 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. Most walnuts are cultivated in Campania (Southern Italy), where the main varieties are Sorrento and Malizia. Some farmers in Northern Italy have established efficient and profitable walnut orchards planted with the Chandler and Lara varieties. 

In Spain, the MAGRAMA has not yet published the official walnut production data for MY 2014/15. Therefore, if weather conditions are favorable, we can expect an average production of 14,000 MT for current MY. 

Consumption: 

Walnuts are mainly purchased in winter time both in-shell and shelled for fresh consumption. More consumers are increasingly purchasing walnuts all year round due to their perceived nutritional benefits. The continued release of studies and research showing the cardiovascular benefits have made walnuts very popular among health-conscious consumers 

In this sense, California Walnuts has been conducting very appropriate consumer advertising campaigns focusing on the health benefits of walnuts as well as the key messages of origin, quality and/or versatility. These actions have a very positive impact in the image of California Walnuts and increased the education on the health benefits of the product. 

Walnut consumption in the EU falls into several categories: as a snack; an ingredient in home cooking; by-products for further processing and as ingredient in the pastry and bakery industry. 

Trade: 

Imports 

The wide gap between EU walnut production and imports provides excellent opportunities for walnut exporters. The United States is the number one supplier of walnuts, both in-shell and shelled. 

The EU imports various types of nuts for direct consumption as well as for further processing and re-export within the region in different forms, such as salted, baked, fried and mixed nuts. 

Exports 

The top destinations for EU-28 walnuts in MY 2012/13 were Turkey, Switzerland and the United States. 

Pistachios, Inshell Basis

Production:

Pistachio is a traditional crop in Italy, especially in Sicily region (Bronte area), where more than 90 percent of the production is located. Bianca (also called Napoletana) is the main pistachio variety grown in Italy and is normally harvested in September. In recent years, pistachio production has slightly expanded to other areas in Sicily and Basilicata, where newer and input intensive orchards have been planted. Since 2004, pistachio from Bronte has been awarded by the European Commission as a PDO (Protected Designation of Origin), distinguishing it from all other pistachio varieties worldwide. Pistachio trees production is cyclical, bearing heavily in alternate years. MY 2014 will be a “lower” bearing year. Moreover, continuous rain during flowering in April impaired pollination. Quality is expected to be good. 

Consumption: 

Domestic EU pistachio production is not sufficient to cover domestic demand, resulting in significant imports from Iran and the United States. 

The overall pistachios use can be split among many different ones starting from the in-shell basically traded as a snack food or as an ingredient employed by restaurant, shelled pistachios are used by bakeries and food companies (bakeries, cosmetic companies, sweet food companies and so on) while ice-cream makers mainly employ milled pistachios. 

Trade: 

Imports 

The EU is a net importer of pistachios due to very limited EU production. The main suppliers for the European market are the United States and Iran, who together account for nearly 100 percent of total imports. U.S. pistachios continue to be the main source of pistachios in the EU, as they have a higher quality image than their major competitor. 

Exports 

EU-28 exports of pistachios are very limited. The top destinations for EU-28 pistachios in MY 2012/13 were Switzerland and Melilla, an autonomous Spanish city located in the North of Africa. The major pistachio exporters are Greece, Italy and Spain. 

Policy: 

Between 2004 and 2011, almonds, hazelnuts, walnuts, pistachios and locust beans benefited from the direct support schemes for farmers established by European Council Regulation (EC) No 73/2009 under the Common Agricultural Policy (CAP). 

Since 2012, the EU aid was separated from production (decoupling), though MS are allowed to continue to provide with a national aid. The budget for the EU program for 2014 is expected to decrease to 12.79 M€. In the case of Spain, the national aid will be co-financed by the MAGRAMA and the Autonomous Regions. According to the Spanish Agricultural Guarantee Fund (FEGA), in 2014, Spain 463,160 hectares requested the aid in Spain. The total national aid has been shrinking since 2012, when total aid was 13,61 M €, to 4-4.5 M € in 2014. 

Aflatoxin Certification for Tree Nuts 

Aflatoxin certification is an import instrument for U.S. exports to the EU of almonds, pistachios and peanuts. Information on the product specific programs is available from the respective commodity groups as well as from the USDA Agricultural Marketing Service (AMS) 

Special EU Import Conditions for U.S. Almonds 

Special EU Import Conditions for U.S. Almonds are no longer applicable after September 3, 2014 following the publication of Commission Implementing Regulation (EU) No 884/2014 of 13 August 2014 imposing special conditions governing the import of certain feed and food from certain third countries due to contamination risk by aflatoxins and repealing Regulation (EC) No 1152/2009. With the removal of special import conditions for U.S. almonds, the presence of a VASP (Voluntary Aflatoxin Sampling Plan) certificate will no longer be a pre-condition for import into the EU. However, the Almond Board of California will strongly advise its members to continue to use the VASP certificate. The lifting of special measures will have no effect on testing levels for shipments with a VASP as those as those had already been lowered to random levels in January 2010. Shipments without a VASP will likely be subject to higher than random import control levels. With the complete removal of special import conditions, the use of the Common Entry Document and the prior notification of goods to the competent authorities at the designated port of entry will no longer be mandatory. 

Levels of Aflatoxins 

Commission Regulation (EU) No 165/2010 increased the maximum aflatoxin levels for almonds and pistachios, as well as apricot kernels, hazelnuts and Brazil nuts, bringing them in line with the Codex Alimentarius levels for tree nuts adopted in July 2008. As a result of both new EU regulations, EU aflatoxin levels are in line with existing Codex maximum aflatoxin levels and sampling plans. However, EU legislation has a more extensive product coverage and also includes separate maximum limits for aflatoxin B1.