Foreword
Dear readers,
August is a quiet marketing news patch for Southern Hemisphere macadamia industries. South African and Australian harvests are tapering off, processors are focusing on fulfilling commitments, taking smaller orders, and calculating to what extent they respond to enquiries for kernel supply. It is also a time of planning and positioning for the period ahead. The macadamia landscape is not static. The next six months will bring news of Northern Hemisphere supply and the size of China’s domestic crop will be known. Dynamic times require a dynamic response from both buyers and suppliers who can read the market well.
The MSM trading platform is a solution for today’s macadamia market, and registering to offer and bid for product will prepare your company for the season ahead. While key marketing decisions lie ahead it is good for industry players to “sharpen the axe now”. Engage with us to learn how the platform can position your business in the season ahead.
Macadamia Price Trends
The two graphs below compare average prices in reported trades for the most recent five-week period (Weeks 29-33) with the five-week period that preceded it (Weeks 24-28). The most recent average kernel prices continue to show strong increases over the earlier period, with Style 1L prices edging towards US$15.00/kg CIF. Average NIS prices in reported trades remain flat as buyers wait on news of China’s crop before making further bids. This holding off suits processors who are using intake for kernel processing where they can.
Market sentiment
This week listed Zimbabwean agribusiness, Tanganda Tea Company, reported a 61% increase in macadamia production against its previous financial year. It is one of several public African agribusinesses reporting improving yield and volume from maturing orchards. Growing macadamia production offers an important diversification for African farming investments traditionally focused on tea, coffee, tobacco, and sugar. Uganda’s Amafh Farms recently initiated an outgrower programme that targets the further planting of 25 million trees by over 250,000 smallholder farmers. In September last year, Sasini, an integrated agricultural supplier in Kenya, reported it still had over 40,000 trees in infancy stage. Meanwhile, despite a tough year, Crookes Brothers’ maturing orchards in Mozambique produced volumes exceeding 1,000t DNIS for the first time in its history as production and yield improved. Kenyan agribusiness giant, Kakuzi, doubled its macadamia plantings to 1,128ha from 621ha in the last five years to 2023, and plans to expand further. SAMAC reports that South Africa exported 338,000 macadamia trees to Zambia in 2023 (407,000 in 2022). Tridge, an online commodity marketer, expects Zambia macadamia production to triple in the next five years. Just under a third of both Kenya and South Africa’s macadamia trees are not yet in full production.
Expanding production will require increased processing capacity, especially in South Africa which is an established route-to-market for grower countries such as Malawi, Mozambique, Zambia, and Eswatini. The latest edition of The Macadamia notes plans for two new processors on South Africa’s north coast in KwaZulu-Natal. The 2024 annual report of the Crookes Brothers ties the future of its macadamia operations in Mozambique to its own processing investment there. Sasini has reported investing in throughput improvements in its factory while Kakuzi has recently invested in macadamia oil pressing capabilities in its factory to diversify income sources.
This is not an easy journey. The 2023 macadamia price collapse together with rising costs makes responding to increasing production a tricky endeavour. Kakuzi and Sasini, historically dependent on the US market, have been hindered by its lack of sales recovery since 2022. Sasini has sought to supplement its traditional export markets with a greater focus on the Middle East and Asia. Processing expansion will require improved demand, better prices, cost containment, and improved supply. While the 2022 and 2023 seasons were not conducive to this, perhaps 2024 represents a turning point.
In The News…
16 August 2024: Macadamia Boom Mitigates Tanganda’s Tea Dip.
15 August 2024: EU tightens control over food safety, affecting Vietnamese farm.
15 August 2024: Global nut and crop update – July 2024.
15 August 2024: Macadamia prices surged by 5 times.
14 August 2024: High costs to hit Sasini Plc’s full year profit.
11 August 2024: NARO to map soils for macadamia farming across Uganda.
10 August 2024: Greek farmers experimenting with tropical crops.