The EAT-Lancet Commission report released earlier this year advocates that 40 percent of our daily protein should come from nuts.

ALSO READ: Nuts for nuts: market value for macadamias up a whopping 72% 

This, together with the ever growing trend to plant based eating, means the nut industry is set to radically continue its growth trajectory.

Total tree nut supply value has almost doubled since 2008, and is estimated to reach 37.5 billion dollars in 2018 / 2019. Macadamia value has increased by 103 percent in this time.

Continued growth in demand for supply has seen the macadamia industry critically reinvest into the sector. South Africa, the world’s largest producer, has for example planted an average of 15 000 new hectares the last three years.

“Transformation to healthy diets by 2050 will require substantial dietary shifts. Global consumption of fruits, vegetables, nuts and legumes will have to double, and consumption of foods such as red meat and sugar will have to be reduced by more than 50 percent.  A diet rich in plant-based foods and with fewer animal source food confers both improved health and environmental benefits,” said Prof. Walter Willett MD, Harvard, EAT-Lancet Commission Report

“Both demand and supply growth leaves the market relatively tight in the short to medium term. While the longer term view looks to ease as supply begins to meet demand,” said Brian Loader, CEO, Green & Gold Macadamias.

GLOBAL CROP SUPPLY

Total tree nut production has risen sharply over the last decade. Macadamia supply, has increased by an impressive 57% in 2018 / 2019, when compared against the prior 10 year average. Each year the macadamia crop grows by an estimated 3000 mt tons (kernel).

2018 saw the global crop supply reach 59 300 mt tons (kernel) – up 18 percent on 2017. South Africa (29%) and Australia (25%) together produce more than half the world’s macadamias.

FORECAST

2019 supply forecast was 5 percent up on last year, however the latest projection looks to be 1 percent down.

Notwithstanding the downward revision supply is anticipated to increase 9000 mt tons (in-shell) on 2018. This is largely due to East Africa growing regions being down 15 – 20 percent due to drought.

Hawaii, also due to adverse weather conditions, is anticipated to produce less than expected.

South Africa’s production remains on the rise increasing from 56 500 mt tons (in-shell) to a forecasted 58 500 mt tons (in-shell) in 2019.

China’s crop is up 40 percent at 29 962 mt tons (in-shell). This is likely to be absorbed within their domestic market without affecting import appetite. Chinese consumption is growing not only in nut in shell, but also for kernel and as an ingredient.

ESTIMATED WORLD MACADAMIA PRODUCTION

“Our crop growth projection remains extremely positive, from 1,100 tonnes to 2,000 tonnes over next 7 years. G&G has a large network of reputable producers and have an established strategic customer base, in a variety of segments around the globe. We are confident that the market will be geared to absorb the increase of our Maclands product,” says Graham McLean, Managing Director Agriculture, Camellia Group.

“South African product quality looks good, however we anticipate smaller nut kernel recovery. This is largely attributed to orchard recovery process following drought in 2017.” Allen.

FORECAST

The market remains tight, however is expected to ease over the long term as plantings come into production. Given projections of more available supply, the opportunity for organisations to explore how macadamias are used as an ingredient (rather than snack) is more tangible.

Green & Gold Macadamias has launched an ongoing programme to inspire innovation in how macadamias are used at all levels of the supply chain.

MARKET OVERVIEW

The U.S. remains the largest consumer of macadamia kernel and China of nut in-shell.

Whilst it is too early in the season to predict how much supply will be available throughout the year, it is recommended to forward buy for the season based on need.

G&G is committed to supporting their customers. Its recent partnership with leading UK listed business Camellia Plc sees G&G grow their kernel supply base by 20 percent, despite downward pressure on 2019 supply.

“Market demand remains resilient – and macadamias maintain their place at the premium end of the nut seg­ment – this means kernel and nut in shell prices remain bullish. Customers continue to be open to talking about macadamias as an ingredient – as a diary alternative, in pastes and butters – amongst others,” says Jens Borchert, Director, California Direct.

Despite earlier uncertainty around the Chinese market, it has continued to buy and import aggressively. This, together with growth in demand for kernel in their domestic market has resulted in prices remaining buoyant.

Nut in-shell appears to be joining the fray of the typically bullish kernel market. Still predominantly driven from China, albeit with a tighter specification for product, the in-shell market too is experiencing upward price pressure. Chinese market for kernel is also on the rise, which means nut in-shell market is paying competitive kernel prices.

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