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GAME INDUSTRY TRENDS ANALYSIS 2024
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Macadamia Growers Urged To Not Rely On China Only
Macadamia growers urged to not rely on China only
By Lindi Botha | 23 October 2024 | 1:00 pm
The macadamia industry is at risk of repeating past mistakes by once again becoming overly reliant on the Chinese market, which could lead to further disruptions.
In 2015, market disruptions in China caused a sudden shutdown, resulting in a backlog of macadamia nut shipments from South Africa at Chinese ports and significant delays in payments, if they came at all.
Speakers at the Macadamias South Africa (SAMAC) conference held in White River, Mpumalanga in September, advocated for a diversified marketing strategy.
Prof Ferdi Meyer, director of the Bureau for Food and Agricultural Policy, pointed to the ‘big unknown’ in Chinese production, which was the area planted to macadamias in that country. According to him, the Chinese government pegged it at 300 000ha (compared with South Africa’s 72 000ha), but this could not be verified.
“If this is the case, then China could become self-sufficient in macadamias,” he explained.
Asked what a sustainable percentage of nuts sent to China would be, Jillian Laing, CEO of the World Macadamia Organisation, related her experience as previous director of New Zealand dairy co-operative Fonterra.
“We eventually settled on 33% of our supply. We learnt some hard lessons being overly dependent on the Chinese market previously, when there were sudden reductions in Chinese imports, or increases in both tariff and non-tariff barriers. Chinese demand can seem very rosy one minute, but can turn bad very quickly.”
She said that while higher demand for macadamia nuts was good, it was important that the industry attracted attention from the right consumers (those willing and able to pay higher prices).
Alex Whyte, director of Green Farms Nut Company in White River, said it was important to maintain the premium status of macadamias.
“There are big opportunities in the ingredient space, but it takes a long time to develop. Our industry operates on short cycles, but we need to think long term to bring stability to prices at higher levels. Right now, the industry is in danger of chasing short-term gain in sending the bulk of nuts to China and getting quicker payments, but it will result in long-term pain if we neglect the kernel market.”
PJ Venter, director of Mayo Macs in Mbombela, said: “The Chinese have started cracking their own nuts and selling to kernel markets, competing with South Africa and Australia. In the short term it s more demand for nuts, which is good news, but in the long term it means they have greater control over the nut market.”
Reporting on the Middle Eastern market, Mike Benjamin, CEO of Golden Macadamias in Mbombela, said that kernel sales had grown 43% since 2019.
“The Middle East presents the sweet spot: closer in proximity, high spending power, favourable import tariffs and nut consumption patterns.”
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