Dear Readers,
Welcome to the November edition of our MSM Monthly Market Report. These monthly reports give a broader summary of market dynamics to complement our weekly reports.
This is our last monthly report for 2024. We would like to take this opportunity to wish you a wonderful festive season and assure you of MSM’s commitment to providing market intelligence and trading solutions aimed at growing the industry through innovative evolution. Contact us to learn more about how you and your business can benefit from this in 2025.
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Overview
Trading picked up in November as buyers sought to secure stock for the December retail period and the Chinese New Year. International NIS trading remained thin as Chinese buyers were supplied by domestic production. Various sources report that China is well supplied for its New Year trading season while the immediate needs of European retailers have been met.
Average prices for some kernel styles continued to climb during November. Average prices for Style 0 in observed transactions climbed steeply from the end of October, continuing an upward trend seen since September. Average prices for Styles 1 and 1S in reported transactions cooled after climbing in early November, while Style 4L prices rose during the month. The month also saw renewed demand for Style 5, leading to higher prices.
Supply was affected by the Kenyan government’s ban on macadamia harvesting from November 2024 to March 2025. The ban was instituted to prevent producers from marketing immature nuts in the upcoming season. This practice was widespread during 2024 as farmers rushed to sell NIS to Chinese brokers at improved prices, resulting in a drop in quality and volume this year. The harvesting ban was subsequently successfully challenged in court by producers when a high court judge suspended the government’s action. Supply uncertainties persist as the Kenyan government continues to try to balance improving farm-gate prices with processor competitiveness and Kenya’s reputation as a source of quality macadamias.
Should Kenyan kernel and NIS exports be delayed to April next year, buyers may continue to face global shortages in the first half of 2025. Surplus stocks from 2022 and 2023 were quickly depleted during this year under renewed demand at low prices. South Africa and Australia’s harvests will only reach the market in the second and third quarters of the year, leaving a first-quarter supply gap if Kenyan harvests are delayed.
Immediate Outlook
Demand for macadamias has recovered this year. The recovery was first sparked by strong Chinese NIS demand at the end of 2023, taking advantage of low global prices to supply both its in-shell consumer snacking market and its growing processing industry. Farmers and processors, desperate for cashflow after two tough marketing years, committed substantial stocks to NIS contracts in response. This resulted in a kernel supply shortage and a strong upward movement in shelled macadamia prices. During the demand dip in 2023, European and US buyers had kept relatively low inventory stocks and were back in the market in 2024, now struggling to ensure they were covered for the season.
Meanwhile, changes within the Chinese macadamia industry meant that a lid was kept on price increases of NIS sizes. Firstly, domestic processors in China were taking up a greater percentage of imported NIS than previously as low prices were driving growing demand for value-added macadamia snacking products. In addition, expectations for a larger domestic crop meant that Chinese buyers had options for securing well-priced orders ahead of the country’s New Year’s celebrations. The market has observed a growing kernel/NIS price spread this year, incentivising producers and processors to commit more crop to kernel markets in 2025.
| Average Monthly $/kg CIF Prices for Observed Macadamia Transactions 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | |
| Style 1 | $11.65 | $11.34 | $12.68 | $12.95 | $13.48 | $14.68 | $14.05 | $15.44 | $15.08 |
| Style 4L | $6.79 | $7.96 | $9.87 | $9.07 | $9.23 | $8.25 | $11.56 | $10.93 | $11.53 |
| NIS22+ | $3.35 | $3.10 | $3.19 | $3.14 | $3.05 | $3.30 | $3.22 | – | $3.29 |
| NIS20-22 | $2.34 | $2.45 | $2.18 | $2.58 | $2.49 | $2.70 | $2.25 | $2.25 | $2.55 |
Includes all origins, all destinations; and prices reported off date of trade. Source: MSM/Development Research Projects
Immediate Caution
The kernel price trajectory, however, is unlikely to sustain into the new year. Key consumer markets such as the United States, Europe, and China, are all showing signs of slowdown. Having faced spiralling inflation the past two years, US and EU central banks raised interest rates in recent years. This year both markets showed contraction, leading to efforts to stimulate their economies. The US’s growth rate is expected to decline this year already, while Europe may manage to only just exceed 1% growth. Despite being not as affected by inflation, China’s economy is also showing signs of slowdown. Consumer spending is likely to remain constrained, as the European Commission noted in its November review of the economy: “Households… appeared reluctant to consume their extra income. With high inflation still fresh in mind, purchasing power remaining below its mid-2022 peak and the opportunity to reap greater financial returns from high interest rates, households kept saving an increasing share of their income.”
The tightening of the US’s trade tariff policy has begun under the new Trump administration as expected. This might lead to another round of tariff wars between the US, EU, and China, which may cause a rise in prices without the related rise in GDP growth. While these economies are likely to avoid recession, growth is expected to be stabilised at best and remain tepid until 2026.
Economic slowdown in key global markets, plus an expectation of increased kernel supply, points towards a stabilising of kernel prices next year. Suppliers will have to price themselves carefully in the new year, taking advantage of the kernel/NIS spread while responding to market signals among final markets in the US, EU, and China.
Trade Trends
In The News…
5 December 2024: Kenya temporarily lifts raw macadamia export ban to clear existing stock
5 December 2024: Chelmer Foods Macadamia Market Update
4 December 2024: [Kenya] Govt Directs Farmers to Sell Macadamia Nuts Within 30 Days
28 November 2024: [Kenya] Kakuzi hosts World Macadamia Organisation CEO, Jillian Laing
27 November 2024: [Kenya] Kakuzi forecasts over 25% drop in annual net earnings
25 November 2024: [Tanzania] TAHA crowns macadamia as future crop jewel
11 November 2024: China’s Surging Nut Consumption: Per-Capita Intake Set To Double by 2030
6 November 2024: [Australia] Why growers jumped from vegetables to macadamias
4 November 2024: Kenya’s macadamia farmers overcome market hurdles, embrace export growth
31 October 2024: [Zimbabwe] Tanganda eyes VFEX… turn to shareholders to raise US$7m
31 October 2024: [Kenya] State targets brokers with Sh100 minimum macadamia price
30 October 2024: [Kenya] Could macadamia be the new coffee?
12 October 2024: South Asian Snack Trends: Insights Driving Innovation in the Region
Undated: Australia Macadamia Society Production figures, 2013 to 2023