Green & Gold Macadamias (G&G) annual pilgrimage to the International Nut Council Congress (INC) – hosted this year 23 – 25 May in Florida in the U.S. – once more highlighted confidence in the macadamia sector. Over 1300 industry leading delegates from over 60 countries from all aspects of the nut industry attended the event.
2019 supply is anticipated to grow by 9000 mt tons (in-shell), reaching 232 428 mt tons, up 4% on 2018 (223 537 mt tons). However this is 1% down on forecast (234 890 mt tons) from March this year, leaving the market in tight supply. Longer term 7 year crop growth projection remains extremely positive: 500 000 mt ton increase from 200 000 in 2018 to 700 000 in 2025.
However, the nut in-shell forecasts does not however tell the full story – it is important to view this alongside the kernel forecasts – as kernel recovery figures are down in most major growing for a number of reasons. 2019 kernel forecast is anticipated to reach 60 630 mt tons, up 1323 mt tons on 2018 (59 307 mt tons)
“Market demand remains resilient – and macadamias are maintaining their place at the premium end of the nut segment – this means kernel and nut in shell prices remain bullish. The lower forecast in supply is somewhat disappointing as the market is strongly geared to absorb increasing product projections. Customers continue to be open to talking about macadamias as an ingredient – as a diary alternative, in pastes and butters – amongst others, ” comments Brian Loader, CEO, G&G.
The downward revision is largely due to drought in Kenya and Malawi. Kenya’s output is down 20% on 2018 from 38 500 mt tons in shell to 32 000 mt tons. Malawi is 7% under from 6 980 mt tons to 6 516 mt tons. Australia has also decreased expected output due to extreme heat weather conditions.
China demonstrates 40% increase in supply year on year, however this is likely to be absorbed within their domestic market without affecting the import appetite. Chinese consumption is growing not only in nut in shell, but also for kernel and as an ingredient. South Africa’s output remains as per forecast of 58 500 mt tons, up 3% on 2018 (56 550 mt tons).
It was widely reported from Australia, South Africa and Kenya that kernel recoveries were down due to smaller nut size. This means that total kernel availability is likely less than forecast and possibly less than available from the 2018 crop
“Attending the INC offers our business the opportunity to bed and build new and existing relationships through the nut value chain. Insight into trends and latest findings gleaned from the event further buoys our believe in the sector – together with being prepared for the changes and growth to come,” concludes Loader.