The second quarter is a key period in shaping the global macadamia industry for the year as South Africa and Australia’s crop comes to market. Together, these two grower countries represent 44% of expected global production for 2024. Guatemala also begins to ship in this period, but its harvesting halfway point is only around July. The month of May began with increases in average prices for both NIS and kernel macadamia products in reported trades. However, average NIS prices levelled out while average kernel prices continued to climb.

Several dynamics have shaped the month. The rally in Chinese demand for NIS that started late last year has continued into 2024. At the recent INC 2024 international congress, Cheng Lu from China’s CHK Trading explained that the sustained demand was being driven by promotions by online retailers in his country. The price-sensitive Chinese market’s favourable response to discounted offers was good news for cash-strapped macadamia suppliers in Kenya, South Africa, and Australia, whose harvests reach market in the first half of the year. Even though some suppliers still consider current NIS prices unsustainably low for producers and processors there has been improvement. Farmers in Australia, for example, have seen their farm-gate prices double this year over those offered in 2023. Having experienced an extended margin-squeezing period of very low prices with rapidly rising costs, the industry has experienced relief through prices rising together with increased NIS demand. However, the Kenyan government’s temporary setting aside of the prohibition on NIS exports by its industry led to a flood of product from that country early in the year. This meant that major grower countries could not easily push for even higher prices as Chinese buyers bid for bargains, citing high levels of supply.

The month appeared to be defined by supplier preference for quick cash relief from substantial NIS sales above committing volumes to kernel production, which has lower returns, higher costs, and less favourable payment terms. The severe drop in kernel prices in 2023 caused supplier countries to find a harbour in NIS markets. Reduced stock available for kernel markets has then led to steady rises in prices in the face of rising demand from European countries, the United States, the Middle East, and South Korea. While a return to traditional kernel production levels in Australia has reportedly begun this year, the South African industry has been slower to commit to kernel production. This has raised concerns from several quarters that urgent short-term goals in the industry are dominating over the more important longer-term, strategic building of diversified kernel markets.

Harvesting in South Africa started later in May than expected, so much of the crop is still out. Wet weather in Australia has also slowed it’s farmers’ harvests. Shipping volumes in reported trades began to increase at the end of the month. It remains to be seen if June will maintain current trends leaving kernel demand unfulfilled or will we see suppliers take up the opportunities offered.

Source：Internet