China’s buying of raw materials may be slowing, but an appetite for healthier living among the country’s fast-growing middle class has stoked demand for nuts, sending prices of cashews and other snacks to record levels.
“Chinese nut consumption is growing so fast, prices have rocketed during the last 12 months,” says Giles Hacking, managing director of London based nut trader CG Hacking and chairman of the International Nut and Dried Fruit Foundation.
Cashews, walnuts and pecans, for example, are at record highs, with cashew kernels trading at $4.55 a pound, up more than 60 percent from a year ago. Walnuts in their shells have risen 43 percent and pecan kernels are up 38 percent.
The Chinese have always enjoyed nuts as snacks but a growing awareness about their health benefits has contributed to the higher demand. Walnuts are considered to be good for the kidneys and the brain and recent news reports in China that pistachios prevent prostate cancer has triggered a rush for the nuts.
Ma Wenfeng, an analyst with Beijing Orient Agribusiness, says: “As Chinese people become richer and their living standards rise, they are consuming more diversified foods, including more nuts. Nuts are popular and have been attracting attention because they are rich in vitamin E, oils and proteins.”
Chinese demand has started to affect food producers who use nuts in their products and will probably become more noticeable from the autumn, says Chuck Crain, who runs Crain Walnuts Shelling in California.
In the case of walnuts, imports from California doubled from 42 million pounds in 2009 to 98 million last year. China, which used to be a net exporter, is now a net importer and producers have seen a near doubling in the price over the past three years. One well-known company has stopped promoting its walnut brownie mix, notes Mr Crain.
With pecans, before 2007, “the U.S. shipped barely more than 1 million pounds of pecans to China a year”, says Bruce Caris of Green Valley Pecan in Arizona. Then, in a year when the walnut crop was poor, the Chinese discovered pecans and account for more than 25 percent of U.S. exports.
The rise of direct Chinese buying from growers has exacerbated price rises.
But sharp price increases in one category of nuts will lead to Chinese importers and buyers switching to other types of nut, says Cheng Hung Kay of nut broker and processor CHK Trading in Hong Kong. Almonds, which are cheaper than most nuts, will probably take the place of cashews, for which prices have rocketed, he says.
But on a per capita basis, Chinese consumption remains low compared with developed countries, so there is further room for growth, say nut exporters. “You go to food festivals in China and a there are still a lot of people who don’t even know what almonds are, so it’s encouraging,” says Warren Cohen, worldwide sales director of California’s Blue Diamond Almonds.
China has become the biggest market for Californian almonds. Imports are up 30 percent to date over last year, having risen 35 percent the year before and 100 percent the year before that. But prices have remained relatively stable due to strong growth in production and acreage increases.