Foreword
Dear readers,
Lack of information and transparency around price determination can be one of the most serious matters affecting farmers, processors and buyers, especially those smaller in scale. The result is an industry at the mercy of speculative forces characterised by volatile trade cycles. The South African Grain Information Services (SAGIS) is a perfect example of how information and transparency through a trading platform can assist an agri-sector in achieving price stability. Trading platforms allows farmers, processors, traders, and buyers to better project revenue and costs in their future planning and investment decisions.
Further, market participants need access to a level legal playing field, pricing transparency, and accurate and reliable market intelligence when negotiating international transactions. Ecommerce offers many answers, including the setting of rules of engagement prior to trading. The MSM platform is designed to provide transparency. Users can view price, volume, and trends in real-time. Armed with this information market participants have the tools to evaluate their position before incurring risk.
Our platform affords the macadamia industry an opportunity to move into the e-commerce world – similar to other agricultural industries – to reap the benefits of modern consumer behaviour, marketing, and trade trends.
This week’s market review, packed with vital market information, expresses our commitment to providing the industry with critical insights that support effective decision-making. We trust you find it helpful.
Latest macadamia transactions
The two graphs below compare the most recent five-week period (Weeks 23-27) with the five-week period that preceded it (Weeks 18-22). There has been an increase in reported trades for kernel styles in the first week of July. Under strong demand, the volume of transactions has increased in the recent five-week period over the previous period. Snacking styles are showing strong average price increases.
In line with what was seen during June, the number of observed transactions have been slowing down while price increases have been limited to the NIS 20-22 size.
Market sentiment
The Australian macadamia industry revised its crop estimates downwards this week to 50,830t (at 3.5% moisture) from the 56,000t estimated earlier this year. Weather conditions are named as the key reason for the lower-than-expected harvest. Australia’s Ruralbank also notes that last year’s low prices have led to reduced fertiliser application and orchard management which has affected yields. South Africa’s harvest, which is later than usual this year, is similarly expected to be lower than originally estimated. The downward crop estimate revisions are driving demand by buyers and wholesalers as global inventories are already low and the market attempts to cover its positions.
The buoyancy this demand brings to supplier prices is being tempered by views that end consumers won’t easily accept higher prices. Ruralbank expects this year’s prices to ultimately average 20% higher than 2023. This is slightly less optimistic than estimates made earlier in the year which anticipated a 30% rise in kernel prices for 2024. With most early season NIS commitments now fulfilled by South African and Australian suppliers, the final harvesting months of July and August will bring clarity from these two grower countries on the extent of product available for both NIS and kernel markets.
Trade trends
SAMAC recently released its first quarter export review, comparing January-to-March 2024 against trends for comparative first-quarter periods back to 2020. The report, which examines both export origin and destination trends, notes the following regarding kernel exports:
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- South African kernel exports to China exploded to 734t in Q1 2024 (compared to 43t for Q1 2023). This was a 1,607% increase. Exports to the rest of Asia have seen a 70% increase in Q1 2024 against the same period in 2023. Meanwhile South Africa’s exports to the United States for Q1 2024 dropped by 21% against volumes recorded in Q1 2023.
- Australia’s kernel exports to Asia (excluding China) in Q1 2024 dropped by 27% when compared against volumes for Q1 2023. Australia exported less kernel in Q1 2024 to each of its top four destinations than it did in Q1 2023.
- China’s kernel exports to Australia in Q1 2024 dropped by 51%, compared to volumes for Q1 2023. While China’s exports to the US have increased, they remain small in volume. China’s Q1 2024 kernel export to Europe continued first quarter declines seen for the last five years.
- In Q1 2024, Guatemala exported only 17% to Europe of what it sent to the continent during Q1 2023. In an unusual production year, Guatemala had exported an annual total 289t to the US and 268t to Europe during 2023.
- Kenya’s Q1 2024 exports to the US declined by 69% (to 213t) against Q1 2023, while first quarter kernel exports to China increased dramatically by 989% (to 860t).
- Malawi similarly reduced its exports to the US in Q1 2024, compared to Q1 2023 (a 56% drop). However, it increased its Q1 2024 kernel exports to Europe by 347% compared to Q1 2023.
The full SAMAC report can be accessed by clicking here.
In The News…
9 July 2024: Australian agriculture outlook 2024: Horticulture.
8 July 2024: 2024 Australian macadamia crop forecast revised amid weather challenges.
4 July 2024: El Nino takes toll on Ariston operations.
4 July 2024: The Rise of Macadamia Milk: A New Plant-Based Sensation.
2 July 2024: USDA – Insurance options enlarged for specialty, organic growers.