GREEN & GOLD MACADAMIAS
2018 Interim Market Report
03 ExecutiveSummary
04 GlobalCropSupplyForecast
07 MarketOverview
08 Kernel (Snack And Ingredients)
09 Nut In-Shell
10 IndustryNews
11 Contacts
CONTENTS
Green & Gold Macadamias - 2018 Interim Market Report 2
This report intends to offer an informed opinion on macadamia market trends using statistics from leading industry bodies together with analysis from Green & Gold Macadamias (G&G). It aims to set the context for our end of season report, which once the 2018 season data is available, will include recommendations around how to best manage purchasing requirements for 2019.
G&G is one of the world’s leading macadamia marketing businesses. Their sales team spans each continent of the globe, and extensive processor partner network is representative of each of the key macadamia growing regions. They are robustly leveraged, to offer customers the best quality, style and supply guarantee possible.
Current strong demand momentum in the macadamia industry continues to be driven by sustained increase in supply.
Following the recent International Macadamia Symposium that took place 16 - 19 October in China’s major macadamia producing region, Lin Cang, it is clear that going forward quality will increasingly become a focus for the Chinese market.
Supply is in line with expectation, however the kernel market remains tight on the back of strong demand for snacking grades. Additionally, a general upturn in new R&D projects for ingredient grades is taking place.
EXECUTIVE SUMMARY
Global crop has grown by 40% over the last five years, and with reasonable weather, is projected to increase by 100% in the coming five years.
Green & Gold Macadamias - 2018 Interim Market Report 3
Macadamia supply has grown over 47% over the last ten years. Current 2018 global crop estimate is 211,000 mt tonnes in-shell (12% increase on 2017) largely driven by South Africa.
WORLD MACADAMIA PRODUCTION
Kernel Basis - Metric Tonnes
GLOBALCROPSUPPLYFORECAST
2007
2007
2008
2009
2010
2011
2012
2013
2014
2015
2017
26,495
27,951
27,639
28,714
29,484
36,907
37,497
41,687
47,247
49,813
51,854
47%OVER PRIOR 10
YEAR AVG
Green & Gold Macadamias - 2018 Interim Market Report 4
South Africa is set to produce 52,400 mt tonnes in-shell this year (significantly up from 44,600 mt tonnes in 2017 due to drought). Australia 47,500 mt tonnes in-shell and Kenya 32,500 mt tonnes in-shell. We wish our friends in Hawaii continued safe passage and minimal disruption during harvest following series of tropical storms and hurricanes.
ESTIMATED WORLD MACADAMIA PRODUCTION
Inshell- Metric Tonnes
GLOBAL CROP SUPPLY FORECAST
2017 2018
Country Beg. Stock Crop Total Supply
Ending Stock Beg.Stock Crop Total
SupplyEnding Stock
Australia 0 43,000 43,000 0 0 47,500 47,500
South Africa 1,880 44,610 46,490 0 0 54,000 54,000
Kenya 0 30,500 30,500 0 0 32,500 32,500
USA 0 17,900 17,900 0 0 15,473 15,473
China 0 10,000 10,000 1,000 1,000 18,000 19,000
Guatemala 0 10,250 10,250 0 0 11,000 11,000
Malawi 0 4,639 4,639 0 0 5,358 5,358
Brazil 0 4,500 4,500 0 0 6,200 6,200
Colombia 0 1,000 1,000 0 0 1,200 1,200
Vietnam 0 840 840 0 0 1,500 1,500
New Zealand 0 229 229 0 0 240 240
Swaziland 0 110 110 0 0 130 130
Others 0 19,046 19,046 0 0 20,000 20,000
World Total 1,880 186,624 188,504 1,000 1,000 213,101 214,101 0
Green & Gold Macadamias - 2018 Interim Market Report 5
It is too early to offer predictions for the 2019 Southern Hemisphere supply. Most areas report reasonable winter rains and good flowering - positive indicators for the coming season. Southern Hemisphere harvest takes place between July and December. This represents the majority of supply (70% of global crop). Buying product and planning for the off season from March - June is imperative in ensuring supply security.
ESTIMATED WORLD MACADAMIA PRODUCTION
Kernel equivalent - Metric Tonnes
GLOBAL CROP SUPPLY FORECAST
2017 2018
Country Beg. Stock Crop Total Supply
Ending Stock Beg.Stock Crop Total
SupplyEnding Stock
Australia 0 13,760 13,760 0 0 14,200 14,200
South Africa 526 13,383 13,909 0 0 16,200 16,200
Kenya 0 5,795 5795 0 0 6,000 6,000
USA 0 4,700 4,700 0 0 3,713 3,713
China 0 2,800 2,800 300 300 5,000 5,300
Guatemala 0 2,200 2,200 0 0 2,500 2,500
Malawi 0 1,286 1,286 0 0 1,485 1,485
Brazil 0 1,150 1,150 0 0 1,550 1,550
Colombia 0 250 250 0 0 300 300
Vietnam 0 210 210 0 0 374 374
New Zealand 0 57 57 0 0 60 60
Swaziland 0 26 26 0 0 30 30
Others 0 4,717 4,717 0 0 5,000 5,000
World Total 526 50,334 50,860 300 300 56,412 56,712 0
Green & Gold Macadamias - 2018 Interim Market Report 6
Macadamia exports around the globe have increased by 112% over the last ten years. This growth in demand is set to be supported by a more than doubling of crop forecast by 2022.
The 2018 season started with low kernel carry over from 2017 and minimal unsold nut in-shell in China. The early 2018 kernel market was driven by a mini pipeline fill as the market scrambled to fill their short positions. The nut in-shell market turned into a “wait and see” approach from the Hong Kong traders and China importers.
MARKET OVERVIEW
Green & Gold Macadamias - 2018 Interim Market Report 7
At halfway through the season the kernel market remains in largely tight supply driven by demand for styles 0, 1, 2 and 4L snack grades. Universal nature of growth for both emerging and mature markets was not anticipated. Ingredient grades (styles 4 through 8) are back on R&D schedules in an increasing variety of categories.
WORLD MACADAMIA EXPORTS
Shelled (Metric Tonnes)
MARKET OVERVIEW - KERNEL MARKET112%
OVER 2016
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
14,684
25,993
27,113
31,260
32,659
34,320
34,451
22,685
33,947
30,614
31,187
Green & Gold Macadamias - 2018 Interim Market Report 8
Demand for nut in-shell imports from Chinese companies is well below previous years. The reasons for this are complex and have varying degrees of importance, including rumours of defaulting on contracts. That said, consumption of nut in-shell is not in decline. Nut in-shell demand is increasingly being supported by China’s domestic product.
This poses a challenge for the industry, and particularly the South African industry. Demand from China is likely to change in that the specification will be for larger nuts, higher sound kernel recovery (nut to shell ratio) with higher quality requirements. This is not a surprise to the industry, but does leave it with the need to add processing capacity and value add investment in being able to crack smaller nuts.
WORLD TREE NUT ESTIMATED CONSUMPTION BY REGION (2016)
27%
23%22%
14%
10%2%
2%ASIA
NORTH AMERICAEUROPE
MIDDLE EAST
AFRICA
LATIN AMERICA
OCEANIA
MARKET OVERVIEW - NUT IN SHELL
Green & Gold Macadamias - 2018 Interim Market Report 9
The International Macadamia Symposium (IMS) took place 16 - 19 October and offered invaluable learning and insights into the global market. The Australian Macadamia Society (AMS) holds its annual conference 13 - 15 November..
Through collective focus and significant investment from key industry players, in 5 macadamia growing countries, September marked the commencement of a world-first scientific health research project for the global macadamia industry.
The Australian Macadamia Society has for the second year running kicked off it’s “Innovation Challenge” which invites entries from food professionals and food technology students to submit truly original and innovative product ideas. Last year’s winning ideas are in progress to market!
INDUSTRY NEWS
Green & Gold Macadamias - 2018 Interim Market Report 10
CONTACTS
White River, South Africa
T +44 208 133 0484
M +27 720 311 838
AlexWhyte
Sales & Marketing Manager
EUROPE, AFRICA & THE MIDDLE EAST
Shanghai, China
T +86 21 5150 1897
M +86 139 1628 5563
Sabrina Li
Key Account Manager
CHINA
Tanglin, Singapore
T +65 6801 0668
M +65 9735 0500
BobbyTan
Market Manager
ASIA
São Paulo, Brazil
T +55 14 3652 6299
M +55 11 99727 4307
Source for graph data - The International Nut Council
Beatriz Egreja Camargo
Sales & Marketing Manager
LATIN AMERICA
Gold Coast, Australia
T +61 7 5575 2497
M +61 433 153 133
Brian Loader
CEO
AMERICA, AUSTRALASIA & CHINA
Green & Gold Macadamias - 2018 Interim Market Report 11