India is buying more California walnuts than it ever has, but West Coast farmers see a vast potential for even more trade as they wrap up a new media campaign in the Asian giant that is home to 1.3 billion people.
In one of the new ads produced by the California Walnut Commission to win over Indian consumers, a young girl plucks a walnut from a bowl and pops it into her hesitant father’s mouth and then smiles when he approves. It’s part of a campaign funded by the USDA’s Agricultural Trade Promotion Program, which is meant to counter the effects of foreign tariffs and India has plenty of those.
“India is definitely one of the markets where we are facing tariffs and we felt that we could do an advertising program based on research we had done,” says Pamela Graviet, senior marketing director for the California Walnut Commission. That research, she added, showed that “if consumers saw walnuts on television, they were more inclined to purchase them.”
It’s unclear how big of a factor the television ads will be, but it’s plain to see that Indians can’t get enough of walnuts and the country is importing millions of tons of them despite very high tariffs.
India lifted a ban on walnut imports about seven years ago and the country has been a major market for California farmers ever since.
They shipped 15,857 short tons of their 2016-17 (Sep-Aug) crop to India in what looked like just another year of increasing trade, but that wasn’t the case. Sales of the 2018-19 crop to India dropped sharply after India raised its tariffs sharply, said Graviet.
India was just one of the countries that the U.S. hit with steel and aluminum tariffs. India was also one of many countries that retaliated with its own tariffs and it coupled that retaliation with a drastic increase to its base Most-Favored-Nation tariff that applies to all of the country’s walnut imports.
India slapped a 20% tariff on U.S. walnuts, among other U.S. commodities. India also raised its base MFN duty from 30.9% to a whopping 100%.
Hit with tariffs totaling 120%, California exported only 11,539 tons of its 2017-8 walnut crop to India and that dropped further to 7,241 tons for the 2018-19 crop.
But that’s when the situation changed. India’s middle class has been on the rise, injecting more disposable income into the market and it was during the pandemic that consumption of walnuts – deemed a healthy treat in a country that loves fruits and nut – began increasing.
California sold 10,806 tons of its 2019-20 crop to India, reversing the downward slide.
“India is a country that has been going through socio-economic changes over the last 15 years,” Graviet said. “You have a large middle class and those consumers are looking for a wider variety of quality foods … We know there is a large growing middle class that is looking for healthy food options for themselves and their families and walnuts are one of those options.”
Interested in more coverage and insights? Receive a free month of Agri-Pulse West.
It is apparently an option that more and more Indians are choosing. The U.S. has already exported more walnuts in the first seven months during the 2020-21 crop year that it exported for the entire 2015-6 crop year. The latest data tracked by the California Walnut Commission shows India imported 20,345 tons of U.S. walnuts from Sept. 1 through March 31, said Graviet.
Even with Indian walnut consumption and U.S. exports on the rise so sharply, the media campaign is important for the push to get more people in the country eating the nuts, says Graviet. She pointed to data from the International Nut and Dried Fruit Council that shows that India’s per capital consumption of walnuts is the lowest in the world.
The Commission says its “goal is to educate consumers on the health benefits of walnuts and how to incorporate them into everyday life.”
Still, India’s tariffs remain a major barrier that the Commission hopes will be removed.
“We’re still arguing that those need to be addressed,” Graviet said. “With the second largest population in the world, overall consumption is really low and there’s tremendous room for growth.”