MSM Market Report: 29 April – 3 May 2024 | Week 18

Latest macadamia transactions: 29 April to 3 May 2024

April trading ended quietly this week (Week 18) after an active start to the month. Prices in observed transactions were also down on the previous week. Despite the softening of prices this past week, averages prices for the month of April exceed those of March. There were no kernel transactions finalised during the week. NIS transactions concluded for Week 18 were limited to NIS20-22 and NIS22+ sizes.

Market sentiment

Speculation abounds on the price trajectory of NIS products while the market awaits the greater part of the South African and Australian harvests. The market has been influenced by the surge in lower priced NIS from Kenya, made available by that country’s government’s temporary lifting of the export ban on unprocessed nuts late last year.

While the past month confirmed expectations for a recovery in European kernel demand, US appetite for macadamias has yet to take shape in 2024. Kernel imports to the US (mainly ingredient styles) dropped by 62% between 2019 and 2023, and domestic (Hawaiian) production has also declined. In 2022, production fell to 2018 levels while harvest unit value (cents/lb) fell to 2014 levels, according to the US Department of Agriculture. Processing capacity has also declined. In 2022, market leader Hawaiian Host temporarily closed its processing factory to fix boilers that violated emissions regulations, repairs then expected to last into 2024. In 2023, the company consolidated the domestic market through acquiring the Australian-owned MacFarms, a processor also located on Hawaii Island. Hawaiian Host reportedly purchases a third of all macadamia nuts domestically produced, sourcing locally before looking internationally. Favouring imports is an attractive option for marketers. Hawaiian Host has said that local product in 2023 cost 35% more than imported Australian nuts.

Reduced production and processing capacity into 2024, under expectations of demand recovery, could mean increased opportunity for imports to the US. The prospect of premium US macadamia brands, such as those sold by Hawaiian Host, containing imported nuts while being sold as Hawaiian products, has prompted the state government to develop legislation to make labels-of-origin mandatory in a move to protect local growers. Approved by lawmakers in the first week of May, the bill is yet to be signed into law by the governor.

Trade trends

The United States has been an important destination in macadamia trade for several years. Recent macadamia price and demand disruptions were first experienced in US markets as pandemic economic restrictions shut down the country’s baking and confectionary industry in 2020. The US imports mainly ingredient styles. Despite declining international macadamia prices of the past three years, however, demand has not recovered to pre-pandemic levels. Substitutionary buying can have a marked effect on macadamia demand when prices compare unfavourably to alternative ingredient nuts.

Market observers anticipate that, as domestic production and processing capacity has reduced since 2022, kernel demand recovery in 2024 could favour increased trade into the US. That said, the year has started quietly as first quarter 2024 kernel imports to the US are significantly lower year-on-year in dollar terms compared to 2023. Imports peak during the third and fourth quarters of each year.

In The News…

4 May 2024: Macadamia exports in 106pc upswing… harvesting reaches home stretch www.herald.co.zw/macadamia-exports-in-106pc-upswing-harvesting-reaches-home-stretch

3 May 2024: Macadamia market report: price trends and regional developments www.commodity-board.com/macadamia-market-report-price-trends-and-regional-developments

2 May 2024: Hawaii’s ‘famous macadamia nuts’ threatened by cheaper, undisclosed Australian imports www.watoday.com.au/world/north-america/hawaii-s-famous-macadamia-nuts-threatened-by-cheaper-undisclosed-australian-imports-20240429-p5fnfd.html

29 April 2024: Hawaii is known for its macadamia nuts. Lawmakers want to keep it that way www.spectrumlocalnews.com/hi/hawaii/news/2024/04/29/hawaii-is-known-for-its-macadamia-nuts–lawmakers-want-to-keep-it-that-way

26 April 2024: Macadamia growers wait for fair crack at the farmgate www.queenslandcountrylife.com.au/story/8604112/australian-macadamia-industry-insights

26 April 2024: Macadamia prices recover www.zinio.com/za/article/farmers-weekly/26-april-2024-i639647/macadamia-prices-recover-a128888

25 April 2024: Kenya-US trade talks inching closer to completion www.agoa.info/news/article/16457-kenya-us-trade-talks-inching-closer-to-completion-cabinet-sec-miano.html

25 April 2024: Global Macadamia Production Increases as Exports to China Soar  www.producereport.com/article/global-macadamia-production-increases-exports-china-soar 24 April 2024: Macadamia prices surged by 5 times www.otl.trade/blog/94671658171

DISCLAIMER:

While we strive for accuracy and reliability in our market review newsletters, MSM cannot be held responsible for any decisions or actions based on the information provided, as market conditions can change rapidly.

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