A study from Chile's Office of Agricultural Studies and Policy (ODEPA) has shown the country's boom in hazelnut, walnut and almond exports over the last decade can be attributed to both comparative and competitive advantages.

In its report, ODEPA pointed to the country's ideal climatic conditions with autumns that are generally dry and appropriate for harvesting, with flat plains that are ideal for mechanized productive processes and irrigation systems.

It added the benefits of an industry that takes an entrepreneurial approach to these crops, as well as a lack of phytosanitary problems.

The report highlighted the clear advantages of counterseasonal production in trading the nuts with tariff preferences in most major markets.

"In addition Chilean nuts have superior organoleptic characteristics which allows them to find high quality market niches," the report said.

Walnuts driving export growth

Chilean nut exports have more than doubled in value over the last three years reaching US$274 million in 2011, which is mainly because of a sharp rise in walnut shipments, jumping from US$80 million in 2009 to US$200 million last year.

The increased planting of the walnuts will also likely lead to further export growth.

Turkey and the United Arab Emirates have become the most important markets for Chilean walnuts with shells, accounting for 60% of the total.

However, trade difficulties with Iran have led to challenges as it is a major market for Turkish walnut traders. The report added that a possible oversupply in the Middle East last year meant that the export season has been slower in 2012.

"Exports of walnuts with shells have experienced a significant drop of 50.2% during the first half of 2012, compared to the same period in 2011," the report said.

"This decrease is heavily influenced by exports to Turkey, which has witnessed a fall of 55.4%, and the United Arab Emirates - a market that reports the best prices - which also shows a substantial fall of 88%.

Closer to home, Brazil remains the top importer of Chilean shelled walnuts, while imports have risen in Europe with the exception of Italy. Russia imported 453,494 metric tons (MT) of walnuts last year.

The South Korean market also opened for Chilean walnuts in 2011, starting imports of the product in May this year and it has become the second-largest market for Chilean shelled walnuts, overtaking Germany.

Hazelnuts and Almonds

The report said shelled almond exports were expected to be stable but would not show such dynamic progress over the medium term, with relatively low plantation growth compared to the rest of the sector.

Neighboring Latin American countries hold the most growth potential for the product, given the European market has shown significant deterioration.

In contrast, an increase in plantings in the last three years will likely lead to high growth for hazelnut export volumes.

The report said Italy was the natural market for shelled hazelnuts but the U.S. was emerging as a market of interest.

Further potential

Chilean authorities are currently negotiating to open up new markets in Asia, particularly India and China, who are both big producers and consumers of walnuts.

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