China’s demand for macadamias boosts local production

China's demand for macadamias boosts local production

With the demand for macadamias growing, particularly in China, local producers are optimistic.

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According to Barry Christie, operations manager for macadamias at the South African Subtropical Growers’ Association (SUBTROP), which represents the South African Macadamia Growers’ Association (SAMAC), the local macadamia industry was growing exponentially, with more than 5 000ha being established in 2017.

Christie attributes this to supply and demand.

“Macadamias are high in demand, which results in a good price and high profitability. This also stimulates interest and thus grows the industry.”

Valley Macadamias Group chairman, Allan Sutton, said in a press release that the demand and consumption of macadamia nuts in China were growing fast, and opportunities for South African producers were incredible.

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Although Christie believes that growth is not driven exclusively by China, he admitted that China was one of the largest importers and probably the most important single market for South Africa’s macadamia industry.

Sutton, however, cautioned that as the market grew, the dynamics changed.

“In the past, when demand outweighed supply, buyers had less choice of style and price. The balance is starting to shift, with the Chinese now producing their own nuts, leading to a global increase in supply. The market is now a buyer’s negotiated space,” explained Sutton.

In 2017, China produced 14 000t of NIS, according to the International Nut and Dried Fruit Council. A challenge facing South Africa’s trade with China is that Chinese macadamia farmers could pose a threat to export rates in the long term, but there was still opportunity for growth in speciality nuts and ingredients.

“South Africa’s macadamia industry is poised for growth of between 8% and 10% this year. With demand in China set to increase, the boom in South Africa can only continue,” said Sutton.