• The latest forecast is around 1 000 tonnes smaller than previously thought, but still significantly bigger than that of 2016 and 2017, which were drought affected. 

  • Why data could be the deciding factor in Africa’s agricultural transformation. The world has a palm oil problem.

  • The continual prosperity of the macadamia industry has led to a rapid increase in orchards with the industry adding around 2 000 additional hectares each year.

  • South Africa's diverse climatic conditions are suited to the production of most nuts, including groundnuts (peanuts) and tree nuts. Macadamia and pecan nuts are the predominant tree nut crops grown in the country.
    The global trend towards eating healthier food has seen tree nut production worldwide increase year-on-year for the last decade, a period which showed a 24% increase compared to the previous decade. The greatest nut consumption is in the high-income countries, with the United States (US) and Europe being the biggest consumers.

    "An estimated 4,2 million tonnes of nuts are produced globally," says Dr Mmatlou Kalaba, director at the Bureau for Food and Agricultural Policy’s (BFAP) commodity markets and foresight division.

    "Almonds make up the greatest volume of tree nuts produced, accounting for about a third of global production. The fastest global tree nut growth, however, is macadamia production. Walnuts, cashews and pecans have also experienced strong average increases, showing growth of 44, 32 and 18%, respectively. Brazil nut production declined significantly, mostly due to unfavourable environmental conditions," he explains.

    Pecans on the rise

    Pecans have shown good growth in South Africa and there is a strong demand for young trees. Pecan production had increased from 5 000 tons in 2010 to 10,500 tonnes in 2015. The development of pecan orchards has been mainly around the Vaalharts irrigation scheme in the Northern Cape, but there are also growers in parts of Limpopo, Cradock in the Eastern Cape, and Citrusdal in the Western Cape.

    However, macadamia nuts take the lead as one of South Africa’s fastest-growing industries. “We are now the largest producer of macadamia nuts in the world, after recently pulling ahead of Australia by a small margin,” says Dr Kalaba.

    Increasing growth in macadamias

    Gilberto Biacuana, Land Bank economist and research analyst, confirms that macadamia nut production in South Africa has experienced exponential growth in the last few years, influenced mainly by robust international demand.

    Figure 1 shows macadamia nut (nut in shell) production between 2006 and 2017, indicating the sustained upward growth. Production increased at a compound annual growth rate (CAGR) of 8,1% from 16,007 tonnes in 2006 to 44,610 tonnes in 2017.

    Figure 1: Macadamia production between 2006 and 2017 shows steady upward growth. (Source: Land Bank, SAMAC)

    Local nut production continues to increase

    "This trend has been influenced by the expansion in area under macadamia trees to support the increasing global demand of macadamia nuts,” Biacuana says. Data from the International Nut and Dried Fruit Council (INC) revealed that South Africa was the leading global producer of macadamia nuts in 2018, accounting for 29% of world production. Other major global producers included Australia at 25%, Kenya at 13%, China at 10%, and the US at 7%.

    According to Biacuana, new plantings increased from 1 250ha in 2013 to 5,000ha in 2017. There are nearly 700 farmers involved in macadamia nut production in Levubu and Tzaneen in Limpopo, from Hazyview to Barberton in Mpumalanga, and in the coastal areas of KwaZulu-Natal. He also says Macadamias South Africa (SAMAC) estimates that the industry employs approximately 12,500 people.

    Export of macadamias

    Macadamia nut exports have maintained an upward trend from 2012 to 2018, with a dip in 2016, which was probably a reflection of loss due to drought.

    Exports increased at a CAGR of 17,6% between 2012 and 2018. Biacuana says a closer look at the data shows that South Africa’s exports of macadamia nuts are predominantly nuts in shell (unprocessed). “In 2018, in-shell macadamia nut exports accounted for 70,8% of total macadamia nut exports. This probably reflects the underdeveloped processing sector of the macadamia nut value chain.”

    Primary export destinations

    Figure 2 illustrates the major destinations for South Africa’s macadamia nuts in shell exports from 2014 to 2018, with Hong Kong at 57%, Vietnam at 26%, China at 9,3%, Switzerland at 4,4%, and the US at 1%.

    During the same period, the major export destinations for South Africa’s shelled macadamia exports were the US at 43,1%, the Netherlands at 9,8%, Hong Kong at 8,5%, Germany at 6%, and Spain at 4,8% (Figure 3).

    Figure 2: South Africa’s major export destinations for macadamia nuts in shell exports between 2014 and 2018. (Source: Land Bank, SAMAC)
    Local nut production continues to increase

    Figure 3: Export destinations for South Africa’s shelled macadamia exports. (Source: Land Bank, TradeMap)
    Local nut production continues to increase

    Watching the competition

    Biacuana notes that competition looms for macadamia producers, despite the export success of macadamias in recent years. “The major competitive risk to the South African macadamia industry in the future is the increased planting of macadamia orchards in China.”

    Table 1 contains the major global producers of macadamias (nuts in shell) and their respective areas under production in 2015. “The biggest producers in terms of the total area under production in 2015 included, among others, China at 42,6%, South Africa at 12,8%, Australia at 11,5%, and Kenya at 11,5%.”

    Local nut production continues to increase

    As illustrated in Figure 4, China will potentially increase its production from 12 000 tons in 2017 to 50,000 tonnes in 2020, an increase of 317%. Therefore, most of the projected growth in global production will come from China. "The increase in China’s production and the subsequent decrease in its imports will likely put global prices under pressure in the medium to long term," says Biacuana.

    Figure 4: Projected global growth in macadamias. (Source: Land Bank, SAMAC)
    Local nut production continues to increase

    Figure 4 shows that production from other major producers is projected to remain relatively stable between 2018 and 2020.

    Increased global demand

    The macadamia industry has grown significantly in the last few years, driven by the increased global demand for nuts. With the rise of the middle class in developing countries, this trend is likely to remain in place for the foreseeable future.

    Biacuana warns that increased production in China could lead to import substitution, which may affect the demand for South African macadamias and apply downward pressure to global macadamia nut prices. “It is unclear when such an increase in supply is likely to happen. Nonetheless, such a likelihood remains a risk to the global macadamia nut market in the near future. Hopefully, the South African macadamia nut industry will adapt and seek new markets,” he says.
  • Macadamia nuts are hard to beat when it comes to the most lucrative crop per land area used in South Africa.

  • In the last decade there has been a 112% increase in the volumes of macadamias exported around the world. Nuts and its health benefits are widely understood. The 60% rise in global tree nut consumption is testament to consumers increasingly opting for healthier food choices.

  • The 2018 South African macadamia crop ended on a positive note with a record crop of 56 550 tonnes of inshell macadamias (measured at 1.5% kernel moisture content). This is approximately 4 000 tonnes higher than the previous estimate that was issued in September. The demand for macadamias remained strong and the kernel market in particular showed great appetite for these high-valued nuts. Approximately 67% of the South African crop was processed to kernel and the remaining 33% exported as inshell.

  • The 2018 South African macadamia crop ended on a positive note with a record crop of 56 550 tonnes of in-shell macadamias.This is approximately 4 000 tonnes higher than the previous estimate.

  • Exclusive to and Agri News Net- 
  • The International Nut Council Congress (INC), recently hosted in Florida in the United States, once more highlighted confidence in the macadamia sector.

  • South African macadamia production is increasing rapidly and the country is now the leading world exporter.

  • THE demand for macadamia nuts is expected to grow significantly in the near future, driven by changes in consumption patterns, hence a lucrative opportunity for local producers to grow their exports, ZimTrade has said.

  • Markets for agricultural produce may not be commonly associated with organised crime, corruption and violence.

  • Brazil is expected to produce more than 6.000 tons of macadamia nuts this year, and these volumes have been experiencing growth due to high demand throughout the world.

  • Capital investment by processors into cutting edge technology and the ever increasing range of macadamia products on shelves are clear indicators that South Africa’s industry remains on an upward trend in line with growing export demand.

  • Despite initial forecasts of a bumper crop this year with yields pegged at the 66 000 ton mark, updated figures are beginning to show a very different picture, with initial optimism dwindling as depressed crop figures start to come in.

  • The global macadamia market is projected to grow at a CAGR of 6.8% during the forecast period (2020-2025).

  • When Ian McConachie was growing up in postwar Queensland, his aunt had macadamia nut trees in her back yard. She told him that one day the trees would be famous.

  • The global macadamia market is projected to grow at a CAGR of 6.8% during the forecast period (2020-2025).

  • The global pandemic is not too tough a nut for the macadamia industry to crack!