Roson Walnut Market Analysis To Be Discussed Background Market Power Price Factors Regression Model Case Studies Background Walnut Background Walnut Fruit Two major varieties of walnuts are grown for their seeds ID: 440464
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Slide1
Group member: Jessica, Tai, Zoe, Roson
Walnut Market AnalysisSlide2
To Be Discussed
Background
Market Power
Price FactorsRegression ModelCase StudiesSlide3
BackgroundSlide4
Walnut BackgroundSlide5
Walnut FruitSlide6
Two major varieties of walnuts are grown for their seeds:
Categories
In every category, walnut has two basic form:Slide7
Climate requirement
Warm weather
Sunshine
Average annual temperature range: l0-14 ℃ Minimum temperature :-16 ℃
Maximum
temperature not :38
℃Slide8
Processes
Farmer Process (Whole)
Seedling graft
Trees planted, irrigation
system installed
Trees pruned, irrigated and fertilized
( Year 4, first crops)
Trees produce full crops
Farmer Process( Annual)Slide9
ProcessorsSlide10
Technology
Grafting
Grafting is used to increase nut production on otherwise healthy trees and should be preformed when the host tree is fairly youngSlide11
Technology CON’T
Insecticide
Slide12
Nutritional Value
ElementsSlide13
Alpha-
Linolenic
Acid(
the plant-based omega-3 essential fatty acid)
Antioxidants(
slow down the process of ageing)
Main Benefits
Nutritional ValueSlide14
Walnut Market BackgroundSlide15
Leading producer
Leading consumer
Metric
Tons
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide16
Leading Exporters
Leading Importers
Metric Tons
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide17
World Market thickness
Year
Exports
Production
Thickness
2007/08
296,900
1,037,450
28.6%
2008/09
357,000
1,184,700
30.1%
2009/10
416,200
1,285,700
32.4%
2010/11
466,800
1,335,600
35.0%
2011/12
474,100
1,455,700
32.6%
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide18
Country
2011/12
China
700,000
United States
418,200
Ukraine
115,000
Turkey
80,000
Total
1,455,700
CR4
90.2%
Country
2011/12
China
758,200
EU
171,300
United States
142,200
Turkey
117,300
Total
1,407,600
CR4
84.5%
Producers
Consumers
Exporters
Country
2011/12
United States
275,400
Ukraine
100,400
Chile
36,500
China
17,300
Total
474,100
CR4
90.6%
Importers
Country
2011/12
EU
125,000
China
75,500
Turkey
51,500
Japan
29,500
Total
434,900
CR4
64.7%
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide19
Regulation and Policy AnalysisSlide20
Walnut
Marketing Board Slide21
The role of the Board Slide22
Policy Analysis: Volume RegulationSlide23
Policy Analysis: Grade and size RegulationsSlide24
Policy
Analysis: Control
over Substandard walnuts Slide25
The US is earning high profit from walnut export constantly.
Dose Regulation Work? Slide26
Price FactorsSlide27
Factors affect priceSlide28
Factors affect priceSlide29
Factors affect price
Supply Parts
Factors affect priceSlide30
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.Slide31
Factors affect price: PolicyNew Regulation
1.Ending product are
Inspected and certified
2.By-product are inspected and certifiedSlide32
Eliminating the need for multiple inspection for the same product (walnut meal).
Improve processor efficiencies by eliminating duplicative inventory tracking.
The price of walnut meal will decreased.
Factors affect price: Policy
Impact: improve the manufacturing process bySlide33
Market Access Program(MAP)
Factors affect price: PolicySlide34
Factors affect price: Policy
Source :http://www.fas.usda.gov/info/factsheets/mapfact.aspSlide35
Impact:
Factors affect price: PolicySlide36
Factors affect price: Policy
Source: USDA ERSSlide37
Factors affect price
Demand part
Factors affect priceSlide38
New Function of WalnutImpact: increase consumers incentive to buy walnut.
Indian Case
Factors affect price:
Healthy informationSlide39
Factors affect price:
Substitution goodsSlide40
Factors affect price:
Substitution effect
Correlation rate:
0.783542
Source: FAO STATSlide41
Factors affect price:
Exchange rate
Exchange rate(RMB/$)
http://www.oanda.com/lang/cns/currency/historical-rates/Slide42
Econometrical AnalysisSlide43
Econometrical Analysis Data Selection
Data
Collection
http://faostat.fao.org
http://data.worldbank.org
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1377Slide44
log(Pw) = β0 +
β
1
log(e1) + β2log(e2) + β3export% + β4
GovtF +
u
0
Most important factor is the export percentage that the board imposed can affect price change, which support our conclusion.
Econometrical Analysis: LOG RegressionSlide45
Pw = β0 +
β
1
e1 + β2e2+ β3exportQty +β4P
w
g
+
β
5
P
a
+ v
0
Most important factors for price level are exchange rates.
But export quantity dose not affect price level a lot.
Econometrical Analysis: Linear RegressionSlide46
Case Study: The Walnut StorySlide47
US Storage of Walnuts VS. PricesSlide48
The Walnut Story in EUSlide49
EU Walnut Market Overview
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide50
Stable and High Demand in EUSlide51
Domestic Production:France : Net exporter, 85% export to EU Italy
Spain
Import: 69
% walnut supply from the USStable Supply in EUSlide52
Promotions: Non price promotionTrade Shows Education Guide
Walnut Market in EUSlide53
The Walnut Story in ChinaSlide54
China Walnut Market Overview
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide55
Popularity of walnuts increases Awareness
:
increasing
knowledge of nutritional values of walnutsPerception: American walnuts perceived of better qualityTaste: American walnuts taste less bitterIncome increases over the years, more disposable income
Demand from middle class and young adults increases tremendously, drives up the price
Rising Demand in China
Result
: Import from California doubled from 2008 to 2009
Price doubled over 3 years period between 2008 to 2011Slide56
Consumption VS. Production Increasing consumption and production
consumption demand exceeds production
Increasing
imports, shrinking exports Used to be a net exporter, became a net importer since 2008Weak US dollars VS. strengthening RMBChanging direction from export driven to consumption drive economy in China
Demand VS. Supply in ChinaSlide57
China Walnuts Import & Export
Source: http://www.fas.usda.gov/psdonline/circulars/TreeNuts.pdfSlide58
Cultural, Climatic, Geographical ChallengesHigh investment, low return in the first few years
Preventing the production to meet internal demand
Production Challenges in ChinaSlide59
Production is expected to increase dramatically in 5 - 10 years (esp. in Yunnan Province) Poverty Alleviation Program Forestation Program
Cropland conversion Program
Production
increases is expected by improving Technology motivated by government supportWalnut Drying technology Traditional wood or coal fire oven VS. modern technology (improve taste) Making walnut milk and walnut
oil
Production Improvement in ChinaSlide60
Market Outlook in ChinaSlide61
EU MarketMatureRoom to expandChina Market
Growing
Lots of room to expand
Opportunities in Walnut MarketSlide62
Don’t miss your chance
to
InvestSlide63
Thank you !Slide64
Gift time