Consumers and export channels were hard hit by global lockdowns in 2020 as a result of the Covid-19 pandemic. And while logistics were quickly smoothed over, nut eaters are expected to remain somewhat cash-strapped this year.
But experts are confident that any reduction in global prices could initiate the development of new markets and products, which could be key to sustaining the macadamia industry over the long term. And while South Africa has a smaller than expected crop to harvest over the next few months, this reduced supply will in fact serve to stabilise supply and demand curves, they say.
Crop forecasts
The 2020/1 national crop is estimated at 60 000t. But many are of the opinion the estimate is optimistic, with between 50 000t and 55 000t dry-nut-in-shell (DNIS) being a more realistic number.
Alex Whyte, sales manager for Green and Gold Macadamias, said early rains were beneficial for most cultivars except for the Beaumont variety.
“They happened to flower during a particularly wet period and suffered flower blight and a poor nut set. But the poor Beaumont crop should be offset by new plantings coming into production and a good crop on most other cultivars,” he said.
However, Whyte said, the national crop yield was still way off the long-term Macadamias South Africa (SAMAC) forecast, which was predicted at around 75 000t.
“With Beaumonts accounting for most plantings over the past five years (77% in 2019), it is a concern how heavily the local industry is invested in a single cultivar, which has now had two very poor seasons in a row,” he said.
And while every year more orchards were maturing, this was being offset somewhat by older orchards becoming less productive or growers heavily pruning them.
“This does explain why the actual crop versus the forecast is so different. We saw a similar thing happen in Australia where the forecast did not take into account the decline in production from older orchards, where pruning was left too late and the trees were more susceptible to unfavourable weather,” he said.
Orchard expansions, he added, were still expected at around 5 000 hectares per year.
“Many farmers continue to look at alternatives to timber and sugar cane, and macadamias have shown resilience, particularly during the pandemic.”
Global Macadamias South Africa Chairman Roelof van Rooyen agreed the slight knock in the markets and the impact of the pandemic would have little influence on orchard growth. “South Africa and the rest of world are still planting a healthy number of trees every year. There is a bit of uncertainty in the marketplace as a result of the pandemic and there is pressure on certain nut styles, but I don’t think farmers will hold back their expansion plans significantly because of this.
“A healthy number of young trees are coming into production in line with the past couple of years. I think this will, however, increase in the near future (weather permitting) when the largest of the seasonal plantings planted over the past three to five years start coming in.”
READ MORE Marquis Marketing Manager in Australia Charles Cormack said he expected the continent’s crop to be on par with 2020, while the world’s third largest producer, Kenya, was looking at an average-sized crop.
“Australia’s 2020 crop was better than originally expected with the latest formal forecast at 46 900t (at 3.5% moisture), which was about 8% up on the 43 500t crop in 2019.
“It is hard to get a read on China, but we would not expect the Chinese crop to increase significantly from the 25 000t to 30 000t mark, which is our best estimate for 2020. Overall, the world crop will likely be on par or slightly up on last year,” he said.
Supply and demand
Coupled with a lower global supply this year is a lower carry-over stock in China, one of the world’s largest macadamia nut markets.
Van Rooyen said stocks were fairly low in China as a result of South Africa’s lower crop yield last season.
“This is especially the case for Beaumonts, which are typically more conducive to the Chinese nut-in-shell (NIS) markets. Demand should be strong at the right price levels, although we are seeing some downward pressure on the NIS pricing for this season,” he said.
According to Whyte the Chinese new-year celebrations on February 12 was a time when quantities of macadamias were consumed and bought as gifts, which boded well for the industry. “Furthermore, the Chinese market, outside another Covid-19 surge, should remain steady in 2021. Generally, the sale of snack nuts at retail level is expected to remain strong as people pass time in lockdowns eating healthily. There has been a strong message from health departments to citizens to eat healthily to keep immune systems strong and demand for snack grades has been solid. We expect this trend to continue,” he said.
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