June 2022 market report

Macadamia kernel imports continue to improve

Supply

The 2022 global crop is forecast to be up 6.4% on the 2021 season, despite challenging weather conditions in the two largest producing origins. The initial crop forecast published for the Australian 2022 season predicted a crop of 54,930 tonnes in-shell @ 3.5% moisture (58,900 tonnes in-shell @ 10% moisture). In May this forecast was reduced by 10%, as a direct result of the recent severe weather and flooding in NSW and South East Queensland. The revised forecast is now 49,340 tonnes in-shell @ 3.5% moisture (52,900 tonnes in-shell @ 10% moisture). NSW growers have been worst affected, and the prolonged rainfall which followed the two flooding events has made harvest more difficult. In contrast and despite flooding in some regions, South Africa has recently increased their forecast from 57,723 tonnes to 61,288 tonnes in-shell @ 3.5% moisture.

Demand

Macadamia kernel imports continue to improve, albeit slowly, with the top markets combined up 5% on the previous MAT period. As the Europe market opens up post COVID-19, we are seeing stronger growth (+15%). Imports to China/HK remain positive (+10%), however, the rate of growth is slowing from the highs of the last 12 months and is likely to be impacted by the current extended lockdowns in the China market. The domestic market has been stable over the last MAT period. Demand is expected to improve as Australian consumers transition through the removal of restrictions and border openings, resulting in increased travel.

Demand in the US market remains at levels well below the last five years. As the largest global market for macadamia kernel, the slow return to previous demand is driving increased price competition, particularly in the ingredient styles.

In-shell imports to China continue to increase year on year and were up 27% for 2021 compared to 2020 (MAT April to March). Australian imports increased 9% for the period, resulting in a reduced market share of 28%. South Africa recorded its highest ever imports, capturing market share of 40%.

Australian sales

The Australian industry recorded a strong 12 months for the MAT period (April to March), assisted by a good start to new season sales in March. Sales were up 15% for the 12 months, driven by strong sales in Germany and most Asian markets, particularly China (+122%).

Key challenges for the Australian industry continue to be global price competition in ingredient style kernel and increasing costs and complexity in the supply chain. Indications are these conditions will continue into 2023.

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