Macadamia prices are recovering back from historic lows last year. As the 2024 harvest is about to commence in South Africa, there is optimism about the road ahead. But industry experts caution that now more than ever, the sweet spot for macadamia nut prices needs to be established to keep the sector as a whole sustainable over the long term.
Global Macadamias, a large processor and exporter based in South Africa, saw its sales team traverse the globe over the last few months, stopping in all the major macadamia nut markets in Asia, the Middle East, Europe and the United States. "The feedback we received was consistent: demand has increased, leading to higher prices," said Roelof van Rooyen, director of Global Macadamias.
Indications across the market are that inshell and kernel prices for macadamias are set to rise by between 10% to 30% depending on crackout style, size and quality. Van Rooyen explained after macadamia prices the world-over reached historic low levels in 2023, buyers especially in China rapidly bought up stock, clearing out warehouses. "Since much inshell is being sent to China, demand for this segment is increasing, leading to higher prices. Kernel stocks on the other hand are set to remain low since more product is being sent inshell to China. Many buyers are finding that the supply of macadamias they thought would be there is not, prices are picking up in light of the low starting supply."
He believed the peak prices of 2018 would likely have diminished demand for macadamias, because at US$6 per kilogramme of inshell, the industry was busy pricing itself out of the market. "Last year's prices however were not sustainable for growers. But I believe we are now entering a phase of greater stability in supply and demand boding very well for the future of all macadamia nut stakeholders," van Rooyen said.
Inshell dynamics
Low macadamia prices paid last year has spurred many farmers to sell directly to China, who are the world largest buyers of inshell macadamias. Buyers often offered immediate payments, aiding cash-strapped farmers. However this has brought a concerning dynamic to the sustainability discussion.
Shane Hartman, CEO of Global Macadamias, cautioned against South Africa 'exporting processing capacity' to China, to the detriment of the long term sustainability of the local industry. "Meeting China's demand for macadamias was positive for the industry last year as it helped to clear warehouse stocks. But over the long term South Africa needs to maintain a robust processing industry so that we are not over reliant on a single market, which in the case of China, is increasingly becoming self sufficient."
Industry outlook
South Africa's crop is expected to increase by nearly 14% this year, from 78 091 tons dry-nut-inshell last year to 90 135 tons, keeping the country in the number one spot for macadamia nut production.
For more information:
Lindi Botha
Tel: +27 82 494 8005
Email: pr@globalmacadamias.co.za
www.globalmacadamias.co.za