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The 2025 season became a true turning point for Ukraine’s nut industry — one that many already, without exaggeration, call a crisis. A combination of climate anomalies, structural shifts in global trade, and internal economic challenges effectively brought an end to the era of the so-called “wild” market, where rules were formed situationally and prices were often determined not by economics but by informal agreements.
Today, the industry finds itself at a crossroads: either stagnation with a gradual loss of competitiveness, or a full transition to global standards of pricing, quality, and processing.
Everything began with the climate, which in 2025 became a real stress test for walnut growers. Spring frosts struck precisely during the critical vegetation phase — the flowering period of lateral and terminal buds. For walnuts, this meant the worst possible scenario. On average, yields dropped by 60–70%, while in some regions losses reached 90%. In practice, this was not merely a poor harvest but a systemic shortage of raw material. The nuts that still entered the market from households were often small in caliber and had a low percentage of light kernel, automatically reducing their export attractiveness.
Against this backdrop, prices began to respond quite rapidly. Whereas the basic farm-gate purchase price for in-shell walnuts had recently remained within 30–35 UAH per kilogram, the 2025 season formed a steady upward trend. Increasingly, the Ukrainian walnut market forecasts that the 50 UAH/kg mark by spring is not speculation but a realistic scenario under conditions of high-quality raw material shortages.
However, the crisis exposed a much deeper issue than simply crop failure. It revealed a systemic weakness of the Ukrainian market — the disconnect between domestic pricing and global indicators. While the global market relies on international indices, particularly reports from the *INC (International Nut and Dried Fruit Council)* as pricing benchmarks, as well as the Californian walnut market, Ukraine’s internal market operated for years under a “regional pricing principle.” Large collectors effectively set prices locally, and this model appeared workable — until the crisis struck. The 2025 season clearly demonstrated its unsustainability.
Today, the market increasingly calls for a transition to a transparent pricing formula. This refers to a model in which the purchase price is derived from the export price according to the principle: “*FOB or *CIF price minus logistics and processor margin.” This approach not only makes the market more transparent but also restores economic motivation for producers. At the same time, quality standards are evolving. The industry is gradually moving away from buying “by weight” toward buying based on “kernel yield.” Kernel color, size, and the percentage of light kernel are becoming the new currency of the market, creating premiums for producers who invest in technology.
The global context further strengthens these transformations. Ukraine exports up to 80% of its walnut production and is therefore fully dependent on external market conditions. The European Union currently maintains stable demand, but a new powerful and rather aggressive player has emerged on the horizon — China. Chinese walnuts, represented by industrial varieties such as Chandler or 185 (a Chinese industrial cultivar), are actively dumping prices in Middle Eastern and Turkish markets. Although Ukrainian walnuts are traditionally valued for their higher oil content and richer flavor, they noticeably lag behind in batch uniformity and commercial appearance. Global buyers increasingly choose standardized products, even if they are slightly inferior in taste characteristics.
Therefore, a key conclusion for the industry is the need to form large, uniform batches of varietal walnuts. This, in turn, is impossible without cooperation among small farmers, who currently operate in a fragmented manner and cannot independently ensure industrial volumes of consistent quality.
At the same time, the crisis has triggered another irreversible process — a technological revolution in processing. Labor shortages caused by war and migration, combined with rising labor costs, have made manual processing economically unviable. The market has begun rapidly investing in industrial drying technologies that ensure kernel stability and minimize aflatoxin risks. Optical sorting machines are becoming widespread — essentially the only tool capable of achieving color sorting at the level required by the EU market and separating shell fragments from kernels without manual labor. Meanwhile, more companies are moving toward deep processing — producing nut flour, oil, pastes, and confectionery ingredients — allowing them to compensate for losses caused by low prices for in-shell walnuts.
Interestingly, against the backdrop of the walnut crisis, interest in hazelnuts has grown rapidly. Prices ranging from 100–200 UAH per kilogram have made hazelnuts one of the most profitable horticultural crops. Investors are actively planting new orchards, but the industry is trying not to repeat past mistakes. Production is immediately oriented toward the requirements of major international processors, which means orchard certification under *GlobalG.A.P. (Good Agricultural Practices)* standards and operation under long-term contracts.
Ultimately, the 2025 crisis became a kind of “bitter medicine” for Ukraine’s nut business — one without which maturation would have been impossible. It clearly demonstrated that behind-the-scenes pricing must become a thing of the past, intensive varietal orchards with irrigation and frost protection must replace backyard collection, and technological advancement together with deep processing must become the new norm.
The industry is effectively moving to a new level of competition, where success is determined not simply by volumes but by quality, supply stability, and the ability to compete in the global market according to its rules. The transformation triggered by the 2025 crisis will determine whether Ukrainian walnuts can preserve and strengthen their position in the world.
Either market forces will eventually put the walnut market in order, or market participants will find common ground and align pricing with global market prices.
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*INC (International Nut and Dried Fruit Council)* — an international industry organization uniting participants of the global nut and dried fruit market. It publishes production statistics, export data, supply-and-demand balances, and analytical reports used as benchmarks for assessing global market conditions.
*FOB (Free On Board)* — an international trade term (Incoterms) meaning the price of goods delivered to the seller’s port and loaded onto a vessel. It includes production, processing, domestic logistics, and export clearance costs but excludes ocean freight and insurance to the buyer’s country. Essentially, it is the “price at export departure.”
*CIF (Cost, Insurance and Freight)* — an international trade term (Incoterms) meaning the price of goods including product cost, insurance, and freight to the buyer’s destination port — effectively a “delivered price.”
*GlobalG.A.P. (Good Agricultural Practices)* — an international agricultural certification standard confirming that products are grown safely, traceably, and in accordance with globally accepted practices.
