Macadamia prices continue to fall amid oversupply

South Africa is set to deliver another bumper crop of macadamia nuts this year, surpassing last year’s total yield of 68 840t dry-nut-in-shell at 1,5% moisture, to reach nearly 78 000t.

Macadamia prices continue to fall amid oversupply
The macadamia price is likely to drop even further as the market battles an oversupply.
Photo: FW Archive
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However, as global supply and demand works against farmers, prices are set to drop to a 10-year low.

On average, farmers are receiving US$8,25/kg (about R152/kg) of kernel for the season.

This is down from the average of US$11,50 (R188/kg at the 2022 exchange rate) last year, and US$16/kg (R236/kg at the 2021 exchange rate) the year prior.

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And despite the considerable depreciation of the rand against the US dollar, farmers are far worse off.

Allen Duncan, CEO of Green Farms Nut Company in Mpumalanga, said the market had weakened over the past 18 months. “The exponential rise in macadamia supply has come together with the post-COVID-19 global recession, the Chinese market being largely inaccessible, and the war in Ukraine.

“These factors have led to a slowdown in sales, carry-over stock from 2022, and downward price pressure on macadamias. The market has shifted to being a buyer’s market.”

He added that South Africa’s macadamia industry was still relatively young at only around 50 years of commercial production. As a result, there were significant knowledge gaps that, if filled, would allow macadamia farmers to achieve higher yields and improve their income per hectare.

Alun Saayman, general manager of Marquis Macadamias Africa, said that research and data-gathering were more important than ever, as they helped establish a knowledge base in the local industry.

“We’re still a long way from knowing the optimal planting densities and requirements for higher yields. New methods for pest management need to be discovered, as the industry has moved from having around 10 major threats to more than 60.

“Research into more resilient cultivars, although it takes a long time to develop, is also essential,” he said.

Duncan added that it would take precision farming to improve quality and yields, and prudent financial and cost management for farmers to pull through this difficult period.

“Prices may settle at a level that is sustainable for consumers and producers, at around US$12/kg to US$14/kg [R218/kg to R254/kg] over time.

“The fundamentals haven’t changed: the consumption of nuts and plant-based food will continue to rise over the long term, and macadamias are perfectly positioned for this,” he said.