June 2020 market report

Modest increase forecast for 2020 global macadamia production

Supply

The 2020 global macadamia crop is anticipated to reach 235,000 tonnes following initial forecasts, up 3% on 2019. South Africa has predicted a similar crop to 2019 at 60,000 tonnes, Australia at 36,500 tonnes, Kenya at 33,000 tonnes and China at 29,000 tonnes. 

Global macadamia crop volumes 2016-2020 (tonnes). Source: INC .All volumes are at 3.5% moisture content.

There are some expectations that South Africa and Australia may achieve slightly higher volumes than these initial forecasts, however Australia is yet to quantify the impact of its prolonged dry conditions on nut size and kernel volumes.

The bottom line is that overall supply growth is predicted to be a modest 5% at most.  

Demand

Overall demand for macadamias reflected available supply. In the 12 months to February 2020, total imports/sales to the top 5 kernel markets were up 2%. There were strong increases in kernel imports to USA, up 11% and Japan, up 8%.  Kernel sales to the domestic market fell by 23% however this followed on from record sales that were achieved from the record 2018 crop. Imports to Europe fell by 6%, at least partly as a result of lower availability of large whole kernels that were a feature of the 2018 crop.

Macadamia kernel imports to top 5 markets (tonnes) MAT March-February. Sources: USDA, Eurostat, Japan Customs, China Customs, Hong Kong Census & Statistics Department via HIS Markit Inc, AMHA

In shell imports grew 19% partly reflecting a smaller than expected Chinese crop, as well as strong demand on Singles Day and in the lead up to Chinese New Year.

Data for demand during COVID-19 is not yet available, however all anecdotal reports indicate that sales have increased significantly in March across most markets and where supply is not constrained.  In China, sales during Chinese New Year were impacted but this did not result in significant stock build up and enquiries from China for the Australian 2020 crop are off to a solid start.

Australian sales

Total Australian sales fell in the 12 months to March 2020, directly reflecting the decline in production. Despite this, overall kernel volume sold was the second highest in the last 5 years, reflecting the ongoing reduction in volume of in-shell sales to China, making more kernel available for sale. 

Australian macadamia sales (tonnes) MAT April-March. Source: AMHA. In-shell sales quoted at 3.5% moisture content.

Despite the short term impact on supply and therefore sales, kernel sales to the domestic and Asian markets were well ahead of 10 year averages. The domestic market and Japan remain strong. Sales to Korea, Taiwan and China remain steady.  Sales to Europe continue to be impacted by increased competition from Africa and sales to the USA were impacted by increased supply from Hawaii and Africa. 

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