Nut prices anticipated to weather the aftermath of COVID-19

Macadamia nuts

 Macadamia nuts expected to continue its upward trend

THE Corona Virus effect on trade relations, markets and economies have had severe financial implications on most industries so far. However, according to the Green Nut Farms (GNFC) in White River, a leading exporter of macadamia nuts, despite trade wars and uncertainty surrounding the marked in the light of the global pandemic, there is light at the end of the horizon.

There is no denying that global macadamia crop forecasts for this year would be lower, with the current South African (SA) political landscape and the duty free trade tariff arrangement in question.

China, where the COVID-19 started, alone consumes 25% of the global macadamia supply with 35% of SA’s macadamias exported there during 2019. The silver lining against the backdrop of Corona remains the stable and growing kernel market around the globe. The drought-stricken Australian macadamia market had positioned South African farmers (of which many are in Mpumalanga), to expect a relatively stable price offering on last year (in Rand terms).

“We are actively monitoring the situation and a true representation of current and potential impacts of the Corona virus remain unknown at this stage. However, we are pleased to be well positioned to represent our growers this year and hold strong confidence in the kernel market,” said Allen Duncan, CEO of GFNC.

China’s import duties on South African macadamias create further constraint in this market as Australia has a 0% duty arrangement with the Eastern country. Online retailers are responsible for approximately 50% of macadamia sales in China.

GFNC’s suppliers would this year receive an additional 5.1% (on average) payment over and above the highest price offer made by the business last year.

Recent strategic investment into leading technology, an African continent first, had further bolstered this local company’s position to sustain trade relations with its largest macadamia export destination, the USA.

Macadamias (relative to other tree nuts like almonds and cashews) tend to be price resilient, potentially due to their smaller representation in the total tree nut “basket”, but also perhaps to their luxury perception and position in market.

 

 

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