Dear Readers,
Welcome to the October 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. The weekly market reports and updates help you stay ahead of the curve with timely, easy-to-consume updates. All in all, our reports seek to uncover the latest trends, developments, and market insights shaping the world of macadamias. Our commitment to keeping you informed remains steadfast.
We hope you enjoy reading our October monthly report and look forward to sharing more updates with you soon. If you’re not receiving our emails straight to your inbox, subscribe to our reports with this form. Previous reports are available on our website.
Overview
Market shortages defined the October period as trading thinned and buyer enquiries quietened after a decent number of observed transactions in September. Partially, the October slowdown may reflect buyer positions being covered for the immediate term, but it may also be the result of an increasingly bearish sentiment among buyers. MSM’s engagements with industry players at the recent SIAL international food exhibition in Paris revealed that macadamia supply was still viewed as unpredictable, unreliable, and already speeding towards the high end of nut prices in comparison to depressed nut prices in other nut segments, at least in Europe. Those engaged were also not convinced that current prices would attract additional supply at the moment. Reduced enquiries have led to stabilised, predictable prices in observed trades for Style 1, Style 4L, and Style 5 (whereas some price volatility was observed in Style 0, Style 1L, Style 1S, and Style 2 transactions).
Kenya continues to seek to stabilise its macadamia industry and balance improving farm-gate prices with improved processor export competitiveness. Its recent announcement to ban harvesting of the late season crop until March 2025 (to prevent a repeat of large amounts of immature nuts coming to market), will push out a significant volume of supply to April 2025. Global supply is expected to increase next year as large plantings come to fruit, but estimations of 2025 production volumes will only firm up into the new year. Meanwhile, uncertainty over global supply towards the end of this year—China’s crop is less than expected and what will Malawi and Hawaii contribute to supply this year?—has some buyers adopting a wait-and-see approach, focusing on 2025.
Latest US trade figures for August 2024 saw kernel macadamia imports break US$10m in value for the first time since February 2023. The recovery in demand sees the US return to its position as the largest kernel market. The trade trends section below documents significant upticks in import trends in other key kernel markets as demand and logistics disruptions of the pandemic years fade from influence. These August trade figures reflect the fulfilment of transactions concluded up to 16 weeks prior to arriving at their destinations.
Immediate Outlook
Market shortages have buyers looking further afield into 2025. However, in a market which lacks transparency and is dependent on crop estimation announcements by grower associations, the situation next year is far from visible. Starting the new year on shortages may incentivise suppliers to be slower to make early commitments, waiting out for improved prices as the year progresses. Facing lower growth and consumer price inflation, buyers will be banking on stabilised prices next year. For now, the market needs more information to form an outlook.
MSM’s experience from engagements with buyers at SIAL during October highlighted again the importance of predictable, reliable supply to develop markets.
Industry players engaged welcomed the role that an online trading platform could play in bringing such features to a market. Recognition was also given for the key role the platform could play in preparing the market for supply increases, and to help identify available volumes that could be secured via the platform to boost sales. We were encouraged from our engagements at SIAL to see that the MSM platform offers a real opportunity to overcome trading difficulties that continue to characterise macadamia trade. By browsing stock loaded on the platform and placing orders that meet market requirements going forward, buyers can create more security in extended macadamia trade.
Available NOW on the MSM Platform
Please note that the three style 4L containers that were immediately available, have been scooped up at an CFR price of 11 USD/kg. The availability of the remaining containers was moved onward due to the current harvesting ban imposed by Kenya. Further listings would probably be postponed due to the same reason.
| Single Style Offers from Kenya Available on the MSM Trading Platform | ||
| Style | Containers | Quantity (kg) |
| Style 1L | 2 | 34020 |
| Style 1S | 2 | 34020 |
| Style 4S | 2 | 34020 |
| Mixed Style Offers from Kenya Available on the MSM Trading Platform | ||
| Style | Containers | Quantity (kg) |
| 16% Style 1S, 84% Style 4L | 1 | 17010 |
| 8% Style 0, 48% Style 1L, 44% Style 1S | 1 | 17010 |
| 12% Style 4L, 80% Style 4S, 8% Style 5 | 1 | 17010 |
| 1% Style 0, 31% Style 1L, 20% Style 1S, 12% Style 4L, 35% Style 4S, 1% Style 5 | 1 | 17010 |
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 value increases are lower than volume increases, this suggests downward price pressure. Publication of trade statistics lags by some months, so trends will only become clearer as this year progresses.
Latest trade figures show a strong year-on-year recovery in demand in the United States. Similarly, imports are up for Japan, the Netherlands, South Korea, Spain, and the UK. Value growth for most of these key margins outpaced volume growth suggesting improved prices.
