Chairman Alan Sutton says this is due to the fact that farmers delivering to affected processors now need to find alternative buyers with open channels to China.
The Valley Macadamias Group is the biggest South African exporter of nut-in-shell macadamias to Asia and therefore has relationships with reputable Chinese traders, who have not been affected by the crackdown.
Due to illegitimate traders bypassing quality controls and smuggling large numbers of inferior-quality nuts into China, the industry experienced a lot of frustration last year. Thanks to interference by authorities in the country, most of the aforementioned activities have been halted.
Sutton explained that several processors who entered the Chinese market for the first time last year, now face shutdown as a lack of experience in the market led them to unscrupulous traders whose operations have since been abandoned. This has caused a delay in the uptake of nuts as some processors are struggling to find new markets.
He applauded the Chinese authorities for stepping in to address the illegal trade of macadamia nuts as it is a practice that will adversely affect the industry and the good standing that South Africa has with the legitimate importers.
Despite the disruptions some processors faced in exporting to China, Sutton says the market was imperative to the success of the industry. “The Chinese market is vital to the success of our farmers as the Asian demand drives prices higher. Without this market we would be limited to Europe and the United States and prices would not be nearly as high as they are. We therefore need to look after our Asian clients and ensure that the nuts reach the market legitimately.”
