Macadamia prices hold firm amid smaller crop

The global 2020 macadamia crop suffered a blow as yields dropped 3% amid unfavourable weather conditions. Although sales have, for the most part, held firm over the past few months, this reduction in supply could serve to benefit farmers in terms of prices paid for the nuts.

Macadamia prices hold firm amid smaller crop
South Africa’s macadamia producers can look forward to a good export season, with the effects of COVID-19-related trade disruptions only likely to be felt in the longer term.
Photo: FW Archive
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The global 2020 macadamia crop suffered a blow as yields dropped 3% amid unfavourable weather conditions.

Although sales have, for the most part, held firm over the past few months, this reduction in supply could serve to benefit farmers in terms of prices paid for the nuts.

In South Africa, which was the world’s largest producer of macadamias, the yield was down 16% from last year’s crop of 59 050t. Instead of the annual increase in yield achieved through rapid orchard expansions, the local crop was only expected to reach 49 503t nut-in-shell (NIS), measured at 1,5% kernel moisture content.

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Lizel Pretorius, CEO of Macadamias South Africa (SAMAC), said that although rainfall during the past season was average, it was assumed that the after-effects of the drought were still lingering.

“Water tables have not yet been replenished to before 2016 levels. Adding to this, many production regions experienced high temperatures during flowering, which might have impacted the sensitive flowers, leading to abortion in heat-stressed trees.”

With the country experiencing a colder winter this year, the Lowveld region saw frost in lower lying orchards, with many trees suffering significant frost damage.

Barry Christie, group agricultural technical manager at Green Farms Nut Company, said smaller trees, especially in the Barberton area, were affected.

“I’ve never seen frost damage on such a big scale before. It could push production back going forward because those trees have lost growth.”

The market has, however, been a saving grace as prices are holding firm despite worldwide economic woes as a result of the COVID-19 global pandemic.

Alex Whyte, sales manager at Green & Gold Macadamias, said that, in general, prices were stable, and forward contracts for macadamias were at similar levels compared with previous years, at around US$19/ kg (R315/ kg) across kernel grades.

“Retail sales of snack products and home-baking packages are reported to be performing buoyantly as consumers look to eat healthy, luxury products at home during this time. However, changes in demand have been observed in the foodservice, travel, and convenience sectors.”

Growth in demand

He noted that macro-trends such as vegan and plant-based diets, together with the fact that the health benefits of macadamias were being better understood, continued to underpin growing demand for the product.

Due to early season commitments, 60% of South Africa’s crop was likely to be shipped to China this year, despite China’s own macadamia crops coming into production.

Whyte explained that although China’s official 22% NIS growth estimate appeared impressive, it was widely accepted that due to the country’s large number of smallholder growers (and the challenge this presented in accurately capturing data), these figures were over-reported.

Unofficial forecasts for China’s production were set at around 20 000t NIS, 33% less than the official crop forecast of 30 000t, he said.