Dear Readers,
Welcome to the February edition of our MSM Monthly Market Report. These monthly reports complement our weekly reports by providing a broader summary view of market dynamics.
MSM is committed to providing market intelligence and trading solutions that are aimed at growing the industry through innovation. By all accounts, the industry is in a period of growth—but at what prices and how will risks in a very uncertain trading year be managed? This is where the innovation of the MSM platform comes in. It is a timely intervention providing international traders with what they need to navigate the market. Contact us to learn more about how you and your business can benefit from MSM in 2025.
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Overview
February was an active month for the kernel market, signalling a positive marketing year ahead. Supplier price expectations for whole nuts cooled for a second month after the bold offers observed in January and earlier, and a strong uptick in reported trades was seen this month. The strong rise in kernel prices witnessed last year has incentivised suppliers to commit a greater proportion of this year’s expected harvest to cracking. This is particularly the case as the price spread with NIS has widened on the latter category’s less impressive price rises.
The NIS market, as expected, has not moved much so far this year in the immediate wake of China’s and Vietnam’s New Year celebrations. Various sources report that China still holds inventory after its festive season. Together with the country’s increasingly strict requirements for imported unshelled macadamias, with the growth of its own production, and with the growing proportion of imported NIS that is now domestically processed, the further presence of inventory casts a question mark over the extent to which suppliers can negotiate prices upwards this year. Still, the country’s retail sector enjoyed its best festive season since the pandemic as China’s consumer sentiment unexpectedly strengthened, showing that China continues to be an extremely important market for supplier countries. Its domestic snack market is highly competitive leading to constant innovation in products sold to stimulate demand. Meanwhile, the Indian macadamia market has begun to open with Australian suppliers celebrating the actioning of their country’s recent trade agreement with India. The recent MEWA trade show held in Mumbai reinforced the exciting prospects for nuts and dried fruit supply to the country.
Early crop forecasts for South Africa and Australia have been published, and expectations for high-quality, growing harvests are high.
Growth in both regions is being driven by new plantings coming to fruit. Meanwhile, important secondary grower regions such as Zimbabwe and Mozambique are also expected to increase their production with maturing new plantings off the back of a strong 2024. Mozambique has the added advantage of a recent trade deal with China giving it direct, tariff-free access to the world’s biggest inshell market. Guatemala is expecting a good crop after excellent conditions during flowering and nut set. The Central American country, an important contributor to global supply, appears to have settled its diplomatic spat with China which threatened its macadamia exports during mid-2024 and Guatemalan-origin shipments were successfully entering China in the second half of last year.
This news of growing supply will be an important balance to the current market position of shortages which has pushed up prices. As the global macadamia industry exits a period of price correction experienced over the past few years, it does so as a different industry. While supplier prices remain below pre-pandemic levels, the drop in prices since the pandemic has attracted many new buyers and stimulated downstream product innovation. Rising price levels constitute a threat to this new wave of demand which is finding the product expensive despite macadamias currently being sold at historically competitive levels
Immediate Outlook
There are early signs that kernel markets are shifting towards a period of increased supply at a time when inventory rebuilding is being prioritised by global buyers. Having enjoyed easy access to rollover stocks at lower prices in recent years, buyers were able to shorten their positions and find stock in late-season spot purchases. The rapid switch shortages experienced last year have changed this and left wholesalers and retailers exposed for the year ahead. This, together with the prospect of kernel prices at least sustaining their current levels, is likely to cause a shift towards buyers adopting longer positions. If this trend towards larger kernel production and larger buyer inventories plays out, it will contribute to improving supply and price stability which can be key to stimulating further demand and product innovation. For now, however, the global industry needs to wait out March and April to get a firmer sense of trends for the year ahead.
Early crop forecasts are in and announcement of notional farm-gate prices by handlers will follow, giving insight into prices processors believe are achievable this year. The first quarter is also often a time in which large European tenders for supply are released, giving the period strong visibility to buyer sentiment.
This period will also bring clarity to expectations for NIS trade for the year ahead. While many have a sense of which way the market will go given China’s position, what will happen in Kenya is just taking shape. The country’s ban on raw exports was confirmed this past week and harvesting started on 1 March, with the potential for an increase in product available for kernel markets. Forced late harvesting in Kenya may at least assist in reducing the presence of immature, low-quality nuts experienced last year.
Available on the MSM Trading Platform
| Single Style Offers Available | |||
| Style | Quantity (kg) | Containers | Avg Opening Price per kg (USD EXW) |
| Style 1 | 131544 | 8 | 15.31 |
| Style 1S | 51030 | 3 | 13.75 |
| Style 4L | 68040 | 4 | 11.50 |
| Style 4S | 145152 | 9 | 10.53 |
| Style 5 | 39599.28 | 3 | 9.18 |
| Style 6 | 14560.56 | 2 | 7.20 |
| Mixed Style Offers Available | ||
| Style | Quantity (kg) | Avg Opening Price per kg (USD EXW) |
| 10.1% Style 0, 50.6% Style 4S, 10.1% Style 5, 10.1% Style 6, 10.1% Style 7, 9.2% Style 8 | 16839.90 | 9.1 |
| 2.9% Style 0, 97.1% Style 1S | 3485.58 | 13.05 |
| 39% Style 1, 61% Style 1S | 3980.34 | 14.2 |
| 51.5% Style 0, 48.5% Style 1S | 5375.16 | 15.03 |
| 7.1% Style 1S, 92.9% Style 4S | 5465.88 | 10.64 |
| 76.8% Style 5, 23.2% Style 6 | 9514.26 | 8.66 |
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Trade Trends
The graphs below superimpose import volume and import value timelines for key macadamia nut markets for the past 20 months. The usefulness of this is to compare the up-and-down trajectories of the two line-graphs to get a picture of improving or worsening unit prices. Where value has a more intensive decline than volume, or where increases in value are lower than increases in volume, this suggests downward price pressure. Publication of trade statistics lags by some months, so trends will only become clearer as this year progresses.
The prospect of a global tariff war looms under protectionist moves by the Trump administration in the United States. It is still unclear how global nut and dried fruit trade will be affected by this. Despite the uncertainty facing free trade, Brazil celebrated improved market access to the US after a decision in February by the latter to allow macadamia imports from Brazil without requiring a phytosanitary certificate.
In The News…
28 February 2025: [Kenya] Macadamia harvest kicks off as export ban remains in place
27 February 2025: [Zimbabwe] Tanganda moves to process macadamia nuts as global prices dip
February 2025: [United States] 2025 State of the Industry Survey Report
26 February 2025: [United States] USDA forecasts growth in tree nut production through 2034
20 February 2025: Australian horticulture production value reaches A$17bn
17 February 2025: [South Africa] AGOA benefits & ‘tariff war’: Trump holds the upper hand
11 February 2025: [INC] Latest Trade News and Agreements: February 2025
7 February 2025: U.S. grants market access to Brazilian agricultural products