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Walnut Market Analysis

Walnut Market Analysis. Group member: Jessica, Tai, Zoe, Roson. To Be Discussed. Background Market Power Price Factors Regression Model Case Studies. Background. Walnut Background. Walnut Fruit. Categories. Two major varieties of walnuts are grown for their seeds:.

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Walnut Market Analysis

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  1. Walnut Market Analysis Group member: Jessica, Tai, Zoe, Roson

  2. To Be Discussed • Background • Market Power • Price Factors • Regression Model • Case Studies

  3. Background

  4. Walnut Background

  5. Walnut Fruit

  6. Categories • Two major varieties of walnuts are grown for their seeds: • In every category, walnut has two basic form:

  7. Climate requirement • Warm weather • Sunshine • Average annual temperature range: l0-14 ℃ Minimum temperature :-16 ℃ Maximum temperature not :38℃

  8. Processes Farmer Process (Whole) Farmer Process( Annual) Trees produce full crops Trees pruned, irrigated and fertilized ( Year 4, first crops) Trees planted, irrigation system installed Seedling graft

  9. Processors

  10. Technology • Grafting Grafting is used to increase nut production on otherwise healthy trees and should be preformed when the host tree is fairly young

  11. Technology CON’T • Insecticide

  12. Nutritional Value • Elements

  13. Nutritional Value • Main Benefits Alpha- Linolenic Acid(the plant-based omega-3 essential fatty acid) Antioxidants(slow down the process of ageing)

  14. Walnut Market Background

  15. Leading producer MetricTons Leading consumer Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdf

  16. Leading Exporters Leading Importers Metric Tons Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdf

  17. World Market thickness Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdf

  18. Producers Consumers Importers Exporters Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdf

  19. Regulation and Policy Analysis

  20. Walnut Marketing Board 

  21. The role of the Board 

  22. Policy Analysis: Volume Regulation

  23. Policy Analysis: Grade and size Regulations

  24. Policy Analysis: Control over Substandard walnuts

  25. Dose Regulation Work? The US is earning high profit from walnut export constantly.

  26. Price Factors

  27. Factors affect price

  28. Factors affect price

  29. Factors affect price Factors affect price Supply Parts

  30. Factors affect price: Policy • The Rules and Regulations (Effective Data: Jan 1,2011) Original Regulation 1. All shelled walnuts are inspected and certified by DFA of California. 2. By-products are inspected and certified Walnut meat: pieces smaller than 3.175 millimeters.

  31. Factors affect price: Policy • New Regulation • 1.Ending product are • Inspected and certified • 2.By-product are inspected • and certified

  32. Factors affect price: Policy Eliminating the need for multiple inspection for the same product (walnut meal). Impact: improve the manufacturing process by The price of walnut meal will decreased. Improve processor efficiencies by eliminating duplicative inventory tracking.

  33. Factors affect price: Policy • Market Access Program(MAP)

  34. Factors affect price: Policy Source :http://www.fas.usda.gov/info/factsheets/mapfact.asp

  35. Factors affect price: Policy • Impact:

  36. Factors affect price: Policy Source: USDA ERS

  37. Factors affect price Factors affect price Demand part

  38. Factors affect price: Healthy information • New Function of Walnut Impact: increase consumers incentive to buy walnut. Indian Case

  39. Factors affect price: Substitution goods

  40. Factors affect price: Substitution effect Correlation rate: 0.783542 Source: FAO STAT

  41. Factors affect price: Exchange rate • Exchange rate(RMB/$) http://www.oanda.com/lang/cns/currency/historical-rates/

  42. Econometrical Analysis

  43. Econometrical Analysis Data Selection Data Collection http://faostat.fao.org http://data.worldbank.org http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1377

  44. log(Pw) = β0 + β1log(e1) + β2log(e2) + β3export% + β4GovtF + u0 Econometrical Analysis: LOG Regression Most important factor is the export percentage that the board imposed can affect price change, which support our conclusion.

  45. Econometrical Analysis: Linear Regression Pw = β0 + β1e1 + β2e2+ β3exportQty +β4Pwg + β5Pa + v0 Most important factors for price level are exchange rates. But export quantity dose not affect price level a lot.

  46. Case Study: The Walnut Story

  47. The Walnut Story in EU

  48. EU Walnut Market Overview Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdf

  49. Stable and High Demand in EU

  50. Stable Supply in EU • Domestic Production: • France : Net exporter, 85% export to EU • Italy • Spain • Import: 69% walnut supply from the US

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