News

The INC XLI World Nut and Dried Fruit Congress took place in Vancouver last week, bringing together more than 1,300 industry leaders from around the world.

The Australian macadamia industry had a strong presence, with representatives from Marquis Macadamias, MWT Foods, Stahmann Webster, Green & Gold Macadamias and the AMS in attendance.

A roundtable seminar was held for each of the nut and dried fruit industries present. The macadamia roundtable featured representatives from six producing origins – Australia, South Africa, China, Brazil, Guatemala and Kenya.

The roundtable provided the forum for an update on global macadamia production, followed by origin-specific updates on the current season. Following is a recap of what was presented.

Global update

2023 was a year of dramatic market volatility that saw buyers respond strongly to lower prices with strong demand in both in-shell and kernel markets. Record levels of inventory were consumed, with 2022’s inventory overhang well and truly cleared.

The 2024 season has commenced with low stock levels at most origins and healthy market momentum. The forecast for 2024 global macadamia production has been revised up to 339,200 tonnes (in-shell at 3.5% moisture), a 7.5% increase on the 2023 crop. South Africa, China and Australia are expected to deliver the lion’s share of the global crop at 27%, 20% and 16.5% respectively.

One of the hallmarks of 2023 was a dramatic rise in in-shell imports to China and Hong Kong from several origins, but particularly South Africa and Australia, which exported 70% and 50% respectively of their crops as in-shell last year. Total in-shell imports to China and Hong Kong from all origins rose from around 52,000 tonnes in 2022 to more than 90,000 tonnes in 2023, with e-commerce said to be a key driver of in-shell demand thanks to the sector’s ability to pass on lower prices to consumers. This has significantly impacted kernel availability globally over the past 12 months.

World macadamia supply is expected to continue to grow at +/-10% per year over the next few years, signalling excellent opportunities for market expansion and product innovation with kernel, with the prospect of more stable pricing on the horizon.

 Farm gate price improves alongside demand growth in Australia

Australia’s roundtable representative, Marquis Macadamias CEO Ben Adams, presented the update on behalf of our industry.

While growing conditions have largely been favourable, rain has been present for much of the start of harvest, creating challenges in some regions, and hampering the ability of many growers to complete their clean-up round. However Australia’s official production forecast remains unchanged at 56,000 tonnes (in-shell at 3.5% moisture).

The high kernel inventories leading into the 2023 season have been cleared due to a higher-than-expected percentage of the crop being sold as nut in-shell, combined with an overall reduction in the final 2023 crop volume.

The 2024 season has begun with an improved farm gate price and increased demand and market pricing. The domestic market is important for Australia and a sustained focus on this market over the past 12 months is delivering consumption growth.

While Australia had a 50/50 split of in-shell versus kernel sales in 2023, it’s expected this will begin to move back towards our more traditional split of 30% in-shell and 70% kernel this year, however a full recalibration of this ratio may take a little longer to play out.

South African crop set to increase

Jill Whyte, Director Green and Gold Macadamias, South Africa, delivered the update on the origin’s season, saying the current 2024 South African crop forecast is for 92,000 tonnes (in-shell at 3.5% moisture), up 15% on 2023. While harvest has only just commenced, making it difficult to assess the final crop at this early stage, Ms Whyte said quality is looking good.

It was noted that significant plantings are occurring in some of South Africa’s neighbouring countries, but with some production challenges.

Ms Whyte expressed the South African industry’s unease around the amount of crop being sold as in-shell, and the ramifications this has for the kernel market, particularly in the long term. While in-shell sales provide a quick cash flow injection, there is concern around the availability of kernel if we see similar volumes of in-shell supplied by origins again this year. With the total global macadamia kernel production significantly lower than that of competing nut industries, it’s important the global industry plans strategically and builds, rather than starves, the critically important long term kernel market.

Production and innovation in China continues to expand

China’s roundtable representative, Cheng Lu, Deputy General Manager, CHK Trading, said China’s total crop forecast for 2024 is currently 69,000 tonnes (in-shell at 3.5% moisture), up slightly on 2023. Looking at specific growing regions, he said Yunnan has experienced good flowering however this was followed by dry weather. This region is expected to deliver most of China’s crop at 57,000 tonnes. The country’s two newer growing regions Guangxi and Guangdong have also experienced recent weather challenges and are expected to deliver 10,000 tonnes and 2,000 tonnes respectively.

Mr Lu reported that the record volume of nut in-shell purchased by China last year has all moved through the supply chain, with the majority consumed by online retailers running aggressive promotional activity.

The China market has seen an abundance of macadamia product innovation recently, driven largely by changing demographics. Younger consumers are eager to try new products that deliver on flavour innovation, including ‘puff coated’ snacks and bakery products containing macadamias. While kernel is growing, it’s expected that in-shell will remain a popular product, particularly if the price remains favourable.

Drought challenges production in Brazil and Guatemala

Brazil’s roundtable representative Jose Eduardo Camargo, Director, QueenNut Macadamia, said while production is increasing in Brazil, it is at a slow pace.

The 2024 crop volume has been hampered by drought, but Brazil’s macadamia industry has seen some gains in its domestic consumption due to ingredient uptake in the bread and ice cream categories.

Guatemala has also struggled with two years of dry weather, according to panellist Thomas Nottebohm, Manager, Industria Guatemalteca de Macadamia. The Guatemalan crop is naturally rainfall fed and flowering was not as strong as previous seasons in the peak period.

It was reported that Guatemala is starting to see the benefits of improved industry cohesion and collaboration. However, its domestic consumption is limited due to price point and availability.

Mr Nottebohm said neighbouring origins Costa Rica and Mexico are both expanding and are expected to return crops of around 500 tonnes and 2,000 tonnes respectively this year.

Large plantings in Kenya

The roundtable was chaired by Kenya’s representative, Graeme Rust, CEO, Kenya Nut Company. He said Kenya’s crop is starting to grow as significant plantings undertaken between 2015 and 2019 come into bearing.

Mr Rust said while initial 2024 crop projections were positive, growers have just experienced 45 days of continuous rain, delivering a total of over 40 inches. He also stressed that 2023 and 2024 season pricing is not sustainable.

High in-shell imports from Kenya to China were attributable to the change in regulation allowing in-shell exports and the low farm gate price. The legislation is due for review by the Kenyan government in November 2024.

He reported neighbouring origins of Tanzania, Uganda and Rwanda are still planning somewhere between 10,000 and 20,000 trees, and they are planning a commercial hub around their macadamia farms, mirroring Kenya’s commercial set-up.