Foreword
Dear readers,
China is a very important market for macadamia suppliers. The growth of this market over the past fifteen years has brought huge benefit to growers and processors around the world. But there are shifts and developments in its demand patterns that are worth taking note of. Its domestic crop is playing a larger role each year in its annual consumption of macadamias. It is processing more imported NIS to meet changing consumer patterns, which are evolving towards value-added products.
These new developments are already affecting average NIS prices, limiting their recovery. Meanwhile, the spread between kernel and NIS prices is growing. As crop volumes grow in seasons ahead, suppliers need to show agility in their marketing to keep servicing the Chinese NIS market while also diversifying towards kernel markets. But they also need to approach such weighty matters with an ability to assess risks, to examine market signals, and vet new buyers. Given processing capacity constraints, kernel opportunities may have to be taken up in collaboration with other players. The MSM trading platform offers this support, enabling agility while reducing risks and the transaction costs of finding new buyers. Providing vetting of both buyers and sellers while assuring quality of product offered, the platform is an ideal tool for the changing world of macadamia trade.
It is a timely intervention assisting the industry in developing a longer-term, more strategic approach towards a more optimal NIS/kernel marketing mix, bringing prosperity and sustainability to the industry.
Demand and supply shifts cannot be ignored but they need not bring panic and can be tackled proactively. We would love to explain more and show you how your business can position itself for the future through the MSM trading platform. Reach out to us and let’s discuss.
Macadamia Price Trends
The two graphs below compare the most recent five-week period (Weeks 26-30) with the five-week period that preceded it (Weeks 21-25). There has been an increase in reported transactions of ingredient styles, and an increase in average prices along with this. Style 0, Style 1, and Style 4L continue to show average price increases over the comparison periods.
NIS prices remain flat over the comparison periods, as prices appear to have settled around an average of US$3.10/kg CIF for NIS 22+ and around US$2.50/kg CIF for NIS 20-22.
Market sentiment
The World Macadamia Organisation (WMO) published its July crop forecasts this past week and downward revisions by grower countries abound. South Africa’s 2024 estimate has been revised down by 15% to 76,753 metric tons. This is actually 3.7% lower than 2023’s harvest. Volatile weather events in Mpumalanga, Limpopo, and KwaZulu-Natal growing regions had an impact. Farmers were also constrained by poor cashflow from the season before to maintain levels of orchard management. Australia had earlier revised its crop estimate downwards but still at 5% higher than 2023. Again, hot and wet weather conditions affected yield. Extreme weather events in Kenya resulted in its earlier 46,000mt forecast being revised to 44,000mt (still 3.5% higher than 2023). The WMO reports of a big 24% drop in Guatemala’s expected harvest compared to 2023. The Central American country’s 2023 crop was already an 8.5% drop on the previous year.
Farmers have exited the industry or left their crop unharvested this year, according to the WMO. Malawi’s crop has also been reported elsewhere as declining this year against 2023 volumes.
The lower-than-expected harvests together with the extensive NIS commitments, made early this year, have meant that suppliers have struggled to respond to new enquiries for macadamia nuts across categories. Direct NIS selling by grower groups has also meant that processors in some cases have struggled to get access to stock for kernel processing. The sense of shortages in the market concerns kernel buyers more as they try to rebuild inventories for the retail season ahead while NIS buyers are banking on China and Vietnam’s crops, which come to market in the last quarter of the year. This is reflected in average kernel prices which continue to rise, while average NIS prices remain steady.
In The News…
26 July 2024: Food and Beverage News and Trends [USA].
25 July 2024: AgTrends Show Sector To Boom In 2024-25 [Australia].
24 July 2024: Macadamias: good prospects in South Africa.
24 July 2024: Crop Forecast Update for WMO Member Countries – July 2024.
18 July 2024: Food on the Move: Flexible Logistics in the Food & Beverage Industry.
16 July 2024: The Diplomatic Chess Between China and Guatemala.