India. Tree Nuts Annual. Sep 2014 Sept. 22, 2014
Indian almond imports during marketing year (MY) 2014/15 are forecast to decline to 58,000 metric tons (MT) (shelled basis) due to higher market prices and the weak rupee. India imported 63,510 MT of almonds in MY 2013/14, which was eight percent below previous year. Indian walnut production is forecast at 38,000 MT (inshell basis), a 12-percent decrease from the previous year. Walnut imports could increase given lower local production and increasing consumption.
Almonds, Shelled Basis
India’s almond production for MY 2014/15(August/July) is forecast at 1,200 MT (kernel weight basis) due to an uptick in the production cycle. In India almonds are primarily grown in the states of Kashmir and Himachal Pradesh. Annual yields per tree are typically low and range between 1,000 -1,500 nuts. Shelling rates generally vary between 20 and 30 percent for hard-shell varieties, and about 40 percent for thin-shelled varieties.
Consumption estimates for MY 2013/14 are lowered from 75,000 MT to 70,000 MT to due to higher almond prices (up 16 percent over the previous year) and a weak India rupee relative to the dollar. Almond consumption in MY 2014/15 is further forecast to drop and additional ten percent to 63,000 MT because of expected, continued higher prices. Total almond supplies in MY 2014/15 are anticipated to drop 12 percent below current year supplies.
Many Indian consumers choose to eat almonds because they perceive almonds as being a high-energy foodstuff which is well suited for physically active people, children, and recovering patients. As a result, more Indian food companies are increasing their usage of almonds in a broader variety of product categories, to include snack foods, health foods, sweets, bakery products, and confectionaries. Moreover, there is a growing industrial demand for lower quality almonds from the cosmetic and health care industries, which extract almond oil from the kernels for use in their products. India’s growing population and expanding middle class continue to support consumption of dried fruits and nuts. Generally, demand for nuts typically peaks during the annual festive season, which runs from September to January. Besides the traditional non-pareil, Indian consumers are buying almonds from different origins, indicating an openness to trying new varieties. Historically, Indian consumers have preferred Californian non-pareil almonds based on price, size, the uniform ‘eye’ shape, and sweetness. Australian non-pareil and Carmel varieties also account for a growing segment of the Indian market. Iranian varieties like Mamra and Qumi are popular in the western and northwestern regions of India (e.g. Rajasthan and Gujarat) and often command a price premium.
Average almond prices in India increased by 16 percent in MY 2013/14 and are expected to remain strong on anticipated high demand during the festive season, tighter international supplies, and a weakened rupee.
Almond imports in MY 2014/15 are forecast to decline for a second consecutive year to 58,000 MT due to higher costs and tight international supplies. In MY 2013/14 Indian almond imports reached 63,510 MT (shelled basis), an eight percent decline from MY 2012/13. During the same period, absolute market share of U.S. almonds declined by10 percent and accounted for 73 percent of India’s total volume of trade, while Australia’s market share increased by seven percent to a achieve 20 percent of total market share. Imports from non-traditional suppliers such as Italy, Malaysia, Thailand, South Korea, South Africa, Japan, and Taiwan were negligible for a second consecutive year. Almond imports from the United States and Australia are mostly in-shell, non-pareil or Carmel varieties and are shelled locally. Almonds from other origins are typically already shelled. Most almonds in India are sold by weight in loose form, and only about five percent of retail sales are packaged.
Trade Policy & Marketing Opportunities
While India does not maintain quantitative restrictions for almond imports, U.S. almonds face tariffs of INR35/kg (inshell) and INR 66.95/kg (shelled). In 2006, India’s Directorate of Plant Protection, Quarantine and Storage amended Order 2003, requiring that phytosanitary certificates reflect that phosphine fumigation occurred at the country of origin prior to shipment.
India is currently the fourth largest export market for U.S. almonds (behind Spain, China/Hong Kong, and Germany). Market development opportunities remain, particularly among school children and young adults. Additional marketing opportunities exist among medium and large bakery, pastry, food processing, and institutional end users. Regions of southern and eastern India may also present additional marketing opportunities.
Walnuts, Inshell Basis
Indian walnut (Juglans spp.) production is expected to reach 38,000 MT (inshell basis) in MY 2014/15, down 12 percent from the previous year. Although weather conditions during the bloom period (March-April) in the Kashmir valley were reported to be favorable, since May, precipitation in the valley was 36 percent below the annual average. Post expects that the unusually dry weather will negatively affect the production and delay the harvest by 15 to 20 days. Typically the walnut harvest runs from the end of August through September, with market arrivals peaking in late October. Indian walnuts are cyclical in terms of production, with yields varying from five to 20 percent depending on the prevailing weather. The production estimate for MY 2013/14 has been revised up eight percent to reflect latest trade estimates.
Long gestation periods, poor orchard management, and uneven yields (estimated at 18-50 kg/tree/year with nut sizes varying from 24-32 mm) keep walnut production relatively stagnant. Moreover, India’s walnut production areas are mostly confined to Jammu and Kashmir, Himachal Pradesh, and Uttarakhand. Indian walnuts are classified as hard, medium, or thin shell (kaghazi/paper thin) and the average shelling rate is 40 percent.
Indian walnut consumption in MY 2014/15 is expected to grow eight percent to 28,000 MT due to stable supplies and strong domestic demand. Presently, an estimated 50 to 60 percent of Indian walnut supplies are consumed domestically, of which nearly half are consumed during the festive season. Industry sources estimate that upwards of 10 percent of domestic consumption is by the bakery, confectionary, and ice cream industries. An additional three to four percent of walnuts (typically nuts that are already rancid) are used by soap and cosmetic manufacturers, who extract the oil for use in their various products.
A growing awareness of the health benefits associate with eating walnuts (e.g. reducing cholesterol) has encouraged higher consumption, particularly in form of snacking. The wider usage of attractive consumer packaging (vacuum packs) is improving the shelf life and quality of walnuts, and has also encouraged year-round consumption as ready-to-eat snacks are more broadly available. Increased usage of walnut as ingredient for bakery and confectionary products is also supporting consumption growth. Major processing facilities for shelling and packing walnuts are located in State of Jammu and Kashmir.
Strong export demand in MY 2013/14 along with production concerns for upcoming crop has lifted walnut prices by more than 45 percent over last year. Industry and trade experts believe that walnut prices will continue to remain strong through MY 2014/15 on strong festive demand. However, average walnut prices remained relatively stable throughout CY 2013.
Growing domestic consumption, coupled with a decline in domestic production in MY 2014/15, should lower exports of Indian walnuts by 16 percent to 13,500 MT. Additionally, tighter domestic supplies should encourage walnut imports, which are forecast at 1,000 MT. As the United States is the only country which currently meets India’s quarantine requirements, U.S. walnuts are likely to be exclusively imported. In MY 2013/14, higher than anticipated domestic production and strong export demand lifted walnut exports. Incidentally, Vietnam outpaced the United Kingdom as the single largest buyer of Indian walnuts, as it bought 15 percent of India’s total walnut exports, followed by the UK at 11 percent. India’s traditional walnut markets (Vietnam, United Kingdom, Netherland, Egypt, Spain, France, and Germany) bought almost 55 percent of India’s exports in MY 2013/14. 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 walnuts from the United States, Mexico, Chile, Turkey, China, and Ukraine compete with India on the international market (particularly shelled).
Last year the Government of India allowed import of walnuts from the United States, provided that U.S. shippers provide additional declarations and meets special fumigation conditions. Walnuts are imported into India without quantitative restrictions under the Open General License (OGL) program. Imports are subject to an effective import duty of 30.9 percent 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