The launch of South Africa’s first independent fresh produce trading ecosystem is in itself a landmark event, but to put the country’s macadamia crop up for regular auction online is revolutionary.
Disruptive innovation is the way of the modern world; constant change in technology developments dominates our lives daily, and now, in South Africa’s macadamia industry, the launch of a brave new strategy to market and sell the country’s crop has the potential to change forever how the sector does business.
HelloChoice is the country’s first independent fresh produce online trading system aimed at creating value for nut buyers, farmers and processors while creating broader access to the golden harvest both in the domestic market and abroad.
Rohan Orford, one of the drivers of the online macadamia auction concept, with the founders of the HelloChoice platform Grant Jacobs and Graeme Jarvie, says while it is still foreign and a “bit scary” for the industry, selling the crop on auction could bring massive benefit to the farm gate while diversifying market access for nut processors.
The first auction is scheduled for August 11.
“Farmers will be able to market their crop at the best bid price. They won’t have to accept delayed payments and they will be able to leverage the Rand/Dollar exchange rates to their benefit. From the processors’ perspective, the benefits include spreading the risk; it will give them greater flexibility in the market, and lessens the pressure of having to forecast prices at the beginning of what is a year-long season. Access to the market and to price information is not only immediate, but transparent,” Orford said.
So, how does it work?
“Let’s say the Rand/Dollar exchange rate has swung heavily in our favour, or there is a demand for a particular quality or style of nut. A farmer would like to take advantage of that, he or she has 10 tons of these particular nuts ready for sale. There might be a host of buyers from China bidding that morning, or Turkey or the United States or even someone here in our domestic market. No delays and no third parties,” he said.
While he admits the landmark concept could make the industry jittery and as South Africans we tended to stick to what we knew and what was familiar to us, he added that the model, which was pioneered by Jacobs and Jarvie in the potato sector, was working well.
“There are so many benefits for farmers as it gives them access to a variety of markets and they receive full payment on the conclusion of the sale. The other great benefit is South Africans might actually get to enjoy the top-quality macadamia nuts grown right here in this country. At the moment most of the crop is exported. And the sleeping giant that is South Africa’s macadamia industry will have a further tool to facilitate the potential for exponential growth as the crop becomes more accessible to a host of diverse buyers.”
For niched or boutique farmers, Orford said the benefits were particularly attractive. “At the moment, regardless of how the crop is farmed, the nuts are lumped in with everyone else’s and they are sold accordingly. But imagine a boutique-style orchard where the farmer has managed to achieve Global Gap or Fairtrade Certification, or perhaps the crop is certified organic: that offers a huge differential. These are specific niche market opportunities that so many and particularly the smaller operations can use to their advantage when selling on auction. The digitisation of crop information opens the farmer’s brand to an infinite number of opportunities.”
From the perspective of the country’s processors, Orford said the concept provided a more flexible way of doing business.
“We have recognised the most important aspect of the crop sale is the verification of the nut quality. HelloChoice is going to great lengths to dot all the Is and cross all the ts to make sure the verification process is foolproof, independent and can be trusted by both farmer and buyer. Simply put, the online auction will reduce risk, create closer relationships with international marketers, and give the processor flexible options to meet variable demands. “For example, a buyer who coats the macadamias in chocolate won’t be too worried about ‘discolouration or onion rings’ or slight blemishes, whereas another buyer wants the nuts to be absolutely perfect. This presents a real and delicate balancing act for the processors.”
In a nutshell, the online auction platform efficiently optimises trade opportunities on a regular basis while allowing both processors and farmers to sell their product at top dollar, in real time and with minimal effort.
The online auction process is absolutely transparent, it provides access to rich market data, and gives the farmer and processor an opportunity to respond nimbly to increasing or decreasing volumes of product.
“This year is a perfect example of that. Some farmers say their crop is down on initial estimates by up to 30%. The auction on August 11 is a fantastic opportunity for them to capitalise on the spike in demand and price, or for the processor or marketer to fill their order books. It’s a win for everyone!” Orford said.
To find our more about SA’s first online auction, watch the video below or click here: