• Macadamias January 26, 2017

    From the demand side, there has been strong demand from the US in the past 2-3 weeks, but it seems to somewhat slowdown. It needs to be said that there is also not much product to be offered for prompt shipment. Enquiries for new crop are coming in. Prices are firm and especially for first shipments not expected to ease. Europe and Asia are mainly looking for Style 0 and 1 and this is something to watch as there is only limited availability and processors want to keep their books square to also be able to choose for NIS, which is currently more profitable. Demand for NIS is still very strong and prices firm. It is our recommendation to consider booking your first shipments on all grades, because even though supply might be higher compared to last season, inventories are low and some contracts have been rolled over and will get priority on shipments.

    After the joint marketing program in the UK there was always that idea to work closer together getting people more aware of this beautiful product. But it seemed rather hard to really get things going until now! The INC announced that up to Euro 200.000 is available for the Macadamia Health Research to enhance the understanding of the health effects of macadamia nut consumption. Research priorities include comparing the effect of a macadamia enriched diet vs. a control diet on insulin resistance/secretion, lipid profile (total cholesterol, LDL cholesterol, HDL cholesterol and triglycerides), and other emergent cardiovascular risk factors, e.g. inflammation, oxidative stress markers, etc. including the evaluation of the effects of macadamia nut consumption on adiposity. The contributors are South Africa, Australia, Malawi, Kenya and Brazil. It is good to see the industry moving into this direction as it is an industry crucial to work together to keep the macadamia in the premium segment even with growing volumes that are expected in the relatively near future.

    The market on its own is also changing and new products are launched. Macadamia Milk and Macadamia Butters are picking up interest. The macadamia is a great ingredient for all sorts of other products and giving a real premium edge to the product.

  • Macadamias October 06, 2016

    The situation in the macadamia market remains unchanged. There is currently a shortage on style 1 and style 2 and this situation is not expected to improve. There is quite some demand in the European market for spot material, but positions are tight. For ingredient grades there are still offers around and buyers are not really in a hurry it seems. The overall outlook is that also for these grades it is recommended to have a look at your positions, because high quality product will be tight. Some South African factories are already done processing for the season as they received way less product. This might have its consequences for total availability later on.

    For new crop the first signs are very promising from South Africa. The flowering is exceptional in the Southern and Northern growing areas, but the question is whether the water levels will allow this to turn into nuts. In the Southern area this looks more promising as they had decent rains over the past weeks giving them quite some confidence. The growers in the north are keeping their fingers crossed as the rains are very little and the waterholes still at low levels. We will visit South Africa and Kenya in October again and hope to be able to have a better view on the outlooks.

  • Macadamias December 21, 2016

    Demand for macadamias seem to be picking up with people trying to cover their needs till new crop and new crop enquiries start coming in as well. The consensus is that the prices will open higher than in previous years since the starting point is quite different to 2016 crop. Last year the inventories were quite high after the NIS debacle. Especially the US was having large stocks and very slow in demand. The first signs now are that the market is empty and new crop sales are expected to pick up shortly. Perhaps around the PTNPA when more is known about the new crop. During our trip around our customers in China we still see a strong appetite for macadamias over there. The high prices are having an impact, but since the market is short now resulting in higher prices again. There is some concern about the price level, but good quality NIS will remain scarce in the new season as well.

    The AMS announced that the crop in 2016 was slightly higher reaching 48.600 mton and as such the largest supplier of macadamias to the market. South Africa had a disastrous year and was down to 36.500-38.000 mton, but world supply is stable. Together with the high inventories it has not been such a bad year in terms of supply, but still short. For 2017 it is still a bit early, but the first sounds we are hearing is that Australia is slightly down and South Africa up, but uncertain by how much as the drought is still impacting the crop. Malawi is looking quite bad and Kenya stable. China will grow a bit, but there are still a lot of uncertainties on this origin. Research is needed to get this industry going. Overall supply as such is going to be slightly up, but nothing dramatic based on the available information.

    It will be interesting how demand will further develop, but especially for your early shipments it is wise to make up your mind and start covering after the Christmas break.

  • Macadamias January 12, 2017

    The factories have been closed for Christmas for the last 4 weeks. People are now slowly coming back and the market is now waiting for more news about the new crop. In our next market report we expect to give you some more information on this. The small crop has resulted in that there is hardly any product left and everybody is really focussing on new crop.

    Australia announced that the 2016 crop was with 47.600 mton (inshell at 1.5% moisture) even slightly bigger than the estimate of 45.750 mton (inshell at 1.5% moisture). Australia is clearly the largest supplier of macadamias to the world again and this might be the same for 2017 crop. The “new” growing area around Bundaberg was the main contributor to this nice figure and is destined to be the powerhouse of the Australian industry for the years to come.

    The demand has been very good for Australian product especially in Asian countries, which is a result of the following factors:

    1. Great lobbying resulting in Free Trade Agreements (FTA) with Japan, South Korea and China.
    2. Geographic advantage.
    3. Great marketing of Australian product really giving it a Premium image.

    In total 10.500 mton was exported as NIS to China resulting in a quite stable kernel availability compared to 2015. This can also be seen in exports to for instance the US and Europe, which has been stable or slightly down.

    For 2017 it will be interesting to see what the US is doing. Looking at the shipment figures 2016 so far has been quite disappointing, especially after record shipments in 2015. Nonetheless it looks like demand is increasing. We are attending the PTNPA in Arizona this weekend and it will be interesting to hear the different views on the market.

    Europe had quite a good year, but is facing some difficulties with the strong Dollar. This is not only the problem for this item, but for almost all nuts. It looks like Christmas sales were good as there was quite some demand in the first 2 weeks of the year for spot material.

    The Chinese inshell market so far has been strong looking for high quality merchandise.

    Our recommendation is to closely follow this market and make sure that your early positions are covered, because there is only limited product around and we still have to wait till July before serious volumes will be available in the various markets.

  • Macadamias February 9, 2017

    Last time there was an increase in interest visible from both kernel and NIS buyers. This trend continues and the interest for NIS even intensified in the last week as buyers returned from Chinese New Year. Available good quality inshell product is limited and therefore it is not expected that this will change unless prices stay within reasonable levels. The Chinese market still seems to have a taste for macadamias, which is also fuelled by the fact that there was very little available this season. This strong NIS demand might have an impact on kernel prices. NIS prices are from a farmer perspective far more profitable. The gap was getting smaller in 2015, but in 2016 this gap widened again. It is obvious that not all product can be send as NIS as quality specification are more stringent than before, but the larger product will be in great demand. There already rumours that Chinese buyers are also active in Kenya and Zimbabwe to get more volume. This business is quite dodgy as Kenya still has a ban and the quality from a considerable portion from Zimbabwe still not upto standards.  The appetite from China for large product inshell product is most likely going to have an impact on available style 0 and 1 product. This is already product where demand exceeds supply and this could further develop.

    In the past season demand for style 4 and 5 was slower after record shipments in 2015. Demand is stronger than in 2016 when inventories were high. This is not the case this season. At first most demand was for early shipments, but there is also more interest for later positions now.

    From a supply point of view sellers are hesitant to book to large volumes. It is still early and there is some concern about the crops. South Africa is looking better than 2016, but how much better strongly depends on the performance of the main growing area Mpumalanga. There were rains, but were they in time? Farmers are a bit conservative after the disappointing development in 2016 and as such it will be interesting to see what happens in the next month. We will visit South Africa early next month when things should be more clear. Malawi is having another difficult year. There are also some concerns on the crop in Kenya.

    It is our recommendation to start looking at your needs and do the necessary bookings. We are keen to make you tailormade offers from various origins.

  • Macadamias February 23, 2017

    The situation in the macadamia market is pretty unchanged. Demand for NIS remains extremely strong. This continues to be a threat for the kernel market. There is no parity between NIS and kernel prices at this point. Looking at the demand for NIS this is also not expected to change in the short future. Demand for kernel is picking up, but it is still very early. It will be interesting to see where prices will go. In the past years we have seen that kernel prices have reached their upper limit with demand fading away especially for style 4 if prices move up too high as is visible in the graph.

    On the supply side the market seems healthy, but kernel supply is likely to decline because of more product allocated to NIS. We repeat what we wrote before. It might be wise to have a look at your needs and take some forward cover especially for the first shipments.

    Next week we will be travelling to South Africa and Kenya again to get a better view on the supply side. We will keep you posted about our findings.

  • Macadamias March 8, 2017

    It is good that we can update you from source. We have been travelling through Kenya and South Africa meeting processors and growers to get a better idea about the crop. This together with the latest updates from Australia is giving some answers to the current situation. Let’s first have a look at the crops.

    After quite positive reports from Kenya this needs to be rectified. The drought is causing problems and has a negative impact on the size of the crop. Besides that, also the Chinese demand is a concern in Kenya even though they are having a ban on exporting NIS. Last year 3.000 mton of NIS was exported through Tanzania, whereas they don’t grow macadamias there and likely a big portion (if not all) is coming from Kenya. The hunger of China is definitely not stilled. We understood that they are more active and the industry not having an official opening date for the season is cutting itself in its fingers. Even though it is understandable that you want flexibility the fixed date was at least securing the crop to come in mature. Now we see that small-scale farmers that are keen for money are harvesting their product rather early resulting in high percentages of immatures. All in all, we expect lesser quantity from Kenya to hit the kernel market.

    If we then look at South Africa the signs for the size of the crop are looking slightly better although unfortunately not back to 2015 levels. The northern growing area Levubu had very good rains over the last months, but that will only have a real effect on 2018 crop. For Levubu we expect a slight increase. In Mpumalanga we hear many different takes

     

    on the crop as there was some rain in certain areas, but in others there was hardly any till December. Anyhow with the new plantings coming into production we do expect a healthy growth here compared to 2016, but we don’t

    expect it to be back to 2015 levels. For KwaZulu Natal, which is basically the new growing area, it is looking a lot brighter. They had timely rains and it looks like we will see an increase in production over there, but the impact is relatively small as most trees are still young. Will this automatically mean we will have more kernel for 2017? This is unlikely. The demand for NIS is very strong and looks like is going to take a way a fair portion on the crop.

    Lastly Australia, who reported a crop of around 50.000 mton (1.5% moisture content) and as such healthy growth of about 4%. Not everybody agrees on this figure, but let’s hope it is true as the industry basically needs the volume. Also here more product is expected to be allocated to NIS, but Australia is also having a strong focus on kernel domestically and new markets (Asia), where they have a great advantage because of the Free Trade Agreements. This is a great achievement of Australia and putting them ahead of the pack in this growing destination.

    Let’s go back to the NIS. At present prices are overheating, but there is not much that can be done on that. Fortunately, not all product can be send as NIS so we will have certain volumes available, but the slow approach from in particular the US is in our opinion not the right strategy and could cause supply difficulties later on. Europe is slowly but steadily buying and the same goes for Asia. The continuous demand of the past months caused a price increase for snack Styles (Style 0, 1 and 2) while the prices for the industrial usage (Style 4 and smaller) stabilized as you can see the figure. Therefore the gap between snack and industrial Styles increased again.

    All in all we recommend our buyers to have a good look at their needs and start covering at least 50% of it.