Dear Readers,
Welcome to the January edition of our MSM Monthly Market Report. These monthly reports give a broader summary view of market dynamics to complement the weekly reports we release.
We would like to wish you well in the year ahead and to assure you of MSM’s commitment to providing market intelligence and trading solutions that are aimed at growing the industry through innovative evolution. Contact us to learn more on how you and your business can benefit from MSM in 2025.
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Overview
Kernel prices performed well in January, rising beyond the strong recovery in prices seen during 2024. Some early trades were observed despite this upward movement in prices. While there are concerns expressed at a continued rise in supplier prices, the global market is characterised by shortages that are keeping prices buoyant. Carryover stocks are very low while some buyers in Europe and the United States do not yet have their positions covered for the 2025 season. Further, it is not clear to what extent Kenya will supply the market during the first quarter because of regulatory uncertainty as its government tries to balance farmer and processor interests. These factors may leave buyers exposed until well into the second quarter when South African and Australian product comes to market. Sensing opportunity, suppliers have been slower to make significant early commitments this year while they have been bold in their offers.
Suppliers are further encouraged by the growing kernel/NIS price spread, which incentivises cracking a greater percentage of product over exporting it as nut in shell. The NIS market has been quiet in January, as is typical on the eve of China’s New Year celebrations. The verdict is still out on how NIS prices will perform this year. Market observers will need to wait until March/April for clarity on how inventory rebuilding will be approached by buyers for Chinese consumers. By then, there will also be a clearer perspective on what to expect from the continual evolution of the country’s domestic supply. As China continues its shift to processing imported NIS and satisfies an increasing portion of its domestic demand through local supply, it may become more demanding in its international purchases.
It is expected that kernel offers will temper into the first quarter as buyer sentiment is more visibly expressed in the market. Macadamia procurement has been more closely tied to downstream food and cosmetic markets in recent times leading to the appeal that suppliers be cognisant of a larger value chain when setting prices. On top of that, poor consumer confidence in key markets such as the United States, Europe, and China, will raise questions about affordability into the year ahead, especially since these regions registered poor Q4 2024 growth figures.
Immediate Outlook
Early indications are that 2025 will produce a good crop, larger than 2024, with both South Africa and Australia reporting good rains and dam levels, despite some disruptive weather early in the summer. Supplier confidence as it is this year will cause an increase in global kernel supply. If Kenya’s processors manage a better year against competition from NIS exports, then kernel supply will certainly increase.
During the abundant, low-cost supply of 2022 and 2023, buyers could reduce inventory levels and rely on spot purchasing to meet late-season needs. However, with shortages and upward price trends, buyers are adopting longer positions and are focusing on inventory rebuilding.
If both kernel supply increases and buyers increase inventory holdings, this will contribute to price and supply stability in the market and go a long way to cementing the market’s recovery in 2024 and sustaining momentum in downstream macadamia product innovation. For this to work, however, stronger information flow up and down the value chain is needed and more visible market signals from both suppliers and buyers are needed.
At this stage of the year, more time is required to understand the market’s direction. January and February are typically quieter months in the global market with trading intensifying in March and April as the Southern Hemisphere industry releases its crop estimates for the year, sets notional farm-gate prices, and concludes early commitments.
Available on the MSM Trading Platform
| FCL and LCL Single Style Offers | |||
| Style | Quantity (kg) | Containers | Avg Price per kg (USD EXW) |
| Style 1 | 131544 | 8 | 15.31 |
| Style 1S | 51030 | 3 | 13.75 |
| Style 4L | 68040 | 4 | 11.5 |
| Style 4S | 145152 | 9 | 10.53 |
| Style 5 | 39599.28 | 3 | 9.18 |
| Style 6 | 14560.56 | 2 | 7.20 |
| LCL Mixed Style Offers | ||
| Style | Quantity (kg) | Avg Price per kg (USD EXW) |
| 2.92% Style 0, 97.08% Style 1S | 3485.5758 | 13.05 |
| 39.04% Style 1, 60.96% Style 1S | 3980.34 | 14.2 |
| 51.48% Style 0, 48.52% Style 1S | 5375.16 | 15.03 |
| 7.06% Style 1S, 92.94% Style 4S | 5465.88 | 10.64 |
| 76.76% Style 5, 23.24% Style 6 | 9514.26 | 8.66 |
| 10.07% Style 0, 50.5% Style 4S, 10.07% Style 5, 10.07% Style 6, 10.07% Style 7, 9.2% Style 8 | 16839.9 | 9.1 |
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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 lag by some months, so trends will only become clearer as this year progresses.
Suppliers will be encouraged to see a reignition in import demand by the United States where volumes imported have increased despite recovering prices during 2024. China’s import activity towards the end of Q4 2024 was quieter than the previous year, for both NIS and kernel trade. Japanese, Dutch, Spanish, United Kingdom and South Korean markets are all displaying rising demand at improved prices. Volumes imported by Germany didn’t show much volume growth during 2024, but trade was at a higher value.
In The News…
2 February 2025: [United States] Not all ‘processed’ food is bad
29 January 2025: [Zimbabwe] Firm export prices boost Tanganda’s earnings
24 January 2025: Macadamia farming: Why now is the best time to invest in Kenya’s ‘Brown Gold’