Foreword
Dear readers,
Standardising delivery and acquisition units through collaborative trade can offer huge advantages to both suppliers and buyers in the macadamia market. MSM’s trading platform offers this opportunity through its affiliated macadamia delivery hubs which serve as standard unit distribution depots (SUDDs), which will soon be available. Providing aggregation at a single-entry point, the delivery hubs will standardise product in terms of moisture content, cultivar, size, maximum unsound levels, minimum crack-out percentages, and batch volumes. This renders immediate value to delivery units to serve as collateral and allows for the entry of entities such as trade financiers with clearing facilities and instruments that provide competitive supply chain solutions and end-to-end control over stock. Importantly, the platform and its affiliated hubs make efficiency and stability-boosting vendor-managed inventory possible.
As suppliers prepare for an optimal start to the 2025 marketing season, we want to draw your attention to the stability and maturity that MSM’s platform can bring to macadamia trade. Our industry desperately needs a more strategic focus. Collaborative solutions across the value chain attend to the longer-term future of macadamia supply, rather than the fragmentation we’ve seen in the past year.
Engage with us and find out more about the solutions MSM offers to your business’s adaptation to the changing macadamia industry.
We trust you enjoy the update below, which is offered less frequently now, but will return to weekly outputs as macadamia trading heats up in the coming months.
MSM is on the road!
Let’s make contact!
MSM will be at the SIAL Paris from 19-23 October, and the Expoalimenta in Porto from 24-26 October. Please contact us to arrange face-to-face meetings. Let’s talk about how MSM can help to unleash your macadamia trade. Simply reply to this email.
Take note of the Polaris Nuts & Dried Fruits Event offering an exclusive gathering of buyers and suppliers. Suppliers are provided with private rooms to host pre-arranged appointments in a relaxed, collaborative atmosphere, and are offered shared meals to foster networking opportunities.
The 2025 edition of this event will be held at the Hyatt Regency Barcelona Tower Hotel on March 25-26, 2025.
Macadamia Price Trends
The two graphs below compare average prices in reported trades for the most recent five-week period (Weeks 33-37) with the five-week period that preceded it (Weeks 28-32). Average kernel price increases in reported trades have slowed as suppliers have begun to respond to enquiries and bids and make offers of their own.
In a period of supply shortages, the uptick in kernel order fulfilment has put upward pressure on NIS prices.
Market sentiment
It is not always easy to gain clarity on supply availability from key origins in the macadamia market. In less than a year, the global industry has gone from excess supply to shortages, which has supported price recoveries for both shelled and unshelled macadamias. As year-end holidays approach, origin countries are keenly aware that China’s own harvest likely won’t satisfy that country’s demand to the extent that was expected earlier this year. Similarly, retailers in the US, China, and Europe—key kernel markets—are said to be low on inventories. This will be to the advantage of Southern Hemisphere suppliers who still have stock into the second half of the year and Northern Hemisphere suppliers who harvest towards the end of the year.
The extent to which the Kenyan industry participates in kernel supply in the period ahead may have a significant impact on stock availability. The Kenyan government prohibited the export of unprocessed nut-in-shell since 2009 in an effort to force onshore processing and job creation. In 2023, however, in response to the global price and demand crash, the government temporarily lifted the ban to assist struggling farmers to find new markets to sell their unprocessed nuts (as processors were not purchasing in sufficient quantities). Chinese brokers, active in the Kenyan market prior to 2009, quickly re-entered the market. Kenyan authorities set a floor price for NIS purchases in 2024 which was up to five times what farmers were offered in 2023, which changed producers’ fortunes.
However, while farmers have increased their sales this year at improved prices, the processing industry has been seriously disrupted. Chinese brokers only accepted nuts from grafted trees and used X-ray machines to weed out inferior nuts before purchase. This resulted in processors having to pay elevated prices for nuts but only being able to choose from what was left of farm supply: nuts from unimproved trees and rejected nuts. The processing of these lower-quality nuts (at lower volumes) raised processing costs and reduced revenues. The nature of broker purchasing has been that farmers have experienced high post-harvest losses while handler associations report that 5,000 processing jobs in the industry have been lost.
With Kenya unable to fulfil kernel orders in the US and Europe, the associations lament that buyers have turned to other origin countries. Meanwhile, macadamia byproduct associations have complained that a drop in the availability of waste shells has harmed their business. Amidst this fierce debate, the government is presently deliberating whether to reinstate the prohibition or to do away with it permanently. Farmers fear a return to low prices under the prohibition while processors fear an industry collapse without it. The government appears to be seeking a way to avoid both outcomes by considering a minimum price for farmers.
Trade trends
US import of shelled macadamias spiked in July, showing a strong increase for the first time this year. Historically the biggest market for macadamias, US demand has been in decline since 2019. It didn’t recover in 2023 despite the drop in prices. Imports for the January-to-July period in 2021, 2022, and 2023 all posted values in excess of US$60m. This year, the same seven-month period has only seen kernel imported to the value of US$32m. Macadamia shipping to the US typically climbs in the second half of the year, and market analysts will be hoping the July figures signal demand recovery and a good H2 2024 period ahead.
In The News…
5 September 2024: A Changing Macadamia Market Needs New Solutions.
12 September 2024: [South Africa] Avocado and macadamia exports soar, but citrus faces struggles.
10 September 2024: 2023 Macadamia Innovation List: What Will Be the Next Snack Nut Industry Leader?
9 September 2024: Macadamia Nut Farming Boosts Kenya’s Position as Top Exporter, AGRA Report.
7 September 2024: [Kenya] Thika: Farmers oppose lifting of ban on raw macadamia exports.
6 September 2024: Camellia swings to loss in tough first half.
6 September 2024: Zimbabwe welcomes protocol on avocado exports to China.
5 September 2024: China grants zero-tariff treatment to three more Mozambican products: cashew, macadamia and pigeon peas.
5 September 2024: [Vietnam] Joining hands to promote regional linkage in e-commerce development in the Central Highlands provinces.
5 September 2024: UK Slashes Inspections on Kenyan Horticulture as Trade Relations Blossom.
5 September 2024: Xi Jinping Meets with President of Mozambique Filipe Jacinto Nyusi.
4 September 2024: Australian almond and macadamia outlook [Podcast].
4 September 2024: Macadamias: Kenya’s farmers demand law change.
4 September 2024: Kenya’s macadamia nut market woes
3 September 2024: [Kenya] Nuts Association Calls For Gov’t Intervention To Safeguard Local Macadamia Nut Processing Industry.
3 September 2024: [South Africa] Mac crop disappoints as processors balance infrastructure growth.