The macadamia industry has seen its fair share of turbulence in recent months, with production volumes down in both of the world’s largest production regions, namely South African and Australia.
Higher-than-expected tariffs into the United States have further muddied the waters, tempering what initially seemed like a good year for macadamia prices.
If ever there was a year to have a smaller-than-expected global macadamia crop, this was it. Adverse weather in South Africa and Australia has reduced supply, offsetting the dampening effect that tariff uncertainty had on demand. With negotiations failing to bring South Africa’s import tariff into the United States (US) below 30%, the reduced appetite from American buyers has had little impact on the market – for now.
Earlier this year, Australia’s crop was hit hard by cyclones, just as harvesting was set to start. The country’s mid-year forecast was therefore revised down to between 37 300 tons and 41 970 tons from an earlier estimate of 55 960 tons.
South Africa’s output was also revised downward, though to a lesser extent.
Macadamias South Africa’s (SAMAC) latest forecast for the 2025 season is pegged at 85 166 tons, down from 93 433 tons at the start of the year.
Global Macadamias CEO, Shane Harman, says regardless, demand remains robust.
“Globally, demand for macadamia nuts has increased as drivers like health trends and mindful eating continue to drive consumption.”
He adds from a supplier point of view, Global Macadamias had witnessed an increase in demand as buyers who traditionally fill their orders from Australia, had sought an alternative source of supply. “This shift is not only positive for this season but could have a long-term positive effect as buyers recognise our ability to provide high quality nuts thereby shifting priorities from origin- to quality-first,” Harman said.
The supply squeeze has been acute in Europe, with both established and emerging markets – particularly in Eastern Europe – moving quickly to secure stock. Hartman says snack-style macadamias remain in high demand, while the ingredients market is still active but absorbing limited supply at a slower pace.
“Price differentials have also shifted product flows. Higher kernel prices have reduced movement into the nut-in-shell (NIS) segment, where stagnating offers have made trade uneconomical. China’s upcoming Yunnan harvest could however lift volumes in the NIS market, provided quality and tonnage meet expectations,” he said.
Shifting trade patterns
South Africa’s macadamia industry has battled against US tariffs for most of the season, with the 30% import tariff announced in April. After the tariff was temporarily reduced to 10% a week later, South Africa’s export industry, and US importers were optimistic by the August 1 deadline, this tariff would remain in place, rather than revert to 30%. This meant buyers held off on securing stock, hoping to confirm orders once tariffs were clarified.
Hartman said as the available volumes this year were lower, many buyers discovered that much of the stock they had expected to be waiting for them had already been absorbed elsewhere. “The impact of the 30% tariff has softened as a result of the lower global stock levels, which have helped keep prices buoyant.”
The question however is how these tariffs will affect the industry over the long term when production normalises.
Hartman said he believed in the future the higher tariff would drive South Africa to alternative markets and included the development of different products to sustainably market the crop.
Industry players have expressed their concern on what the long-term impact could look like, particularly on ingredient styles, as these were largely absorbed by the US market.
Cobus Kok, managing director of Macadamia Service Management, believes trade is set to take a sharp turn as tariff measures land and global buyers rethink sourcing strategies. “Macadamia prices are adjusting again, with average ingredient-style prices declining and possible knock-on effects for smaller NIS category pricing,” he said.
Alex Whyte, Director of Green Farms Nut Company, says surplus ingredient-style stock in South Africa may become an issue, and unloading it could prove tricky as alternative markets take time to absorb product. He however questioned whether US markets could really forgo South African supply.
“We have confidence in the macadamia industry’s resilience and capacity to adapt,” Whyte said. “The 30% tariff presents a challenge, but it’s not cause for panic. Although this could slow the price recovery the industry has had over the past 12 months, we are in a strong position, with no carryover stock from the previous season and being well forward sold for 2025.”
And as the US had long been a key market for specific grades such as halves and pieces in the short-term new destinations would have to be found for these products. “But the timing is somewhat fortunate, given the lower global crop this year,” Whyte said.
He added that much would depend on how the global market adjusts to the tariffs. “If there is a disparity in how different origins are treated under this policy, it may gradually shift trade patterns, reduce choice and increase costs for US buyers. The tariff may also raise input costs for American food producers who rely on South African macadamias, many of whom export their finished goods. Over time, this could affect the global competitiveness of some well-known US brands,” he said.
In the meantime, Hartmann said, consumer demand in the US appeared steady as customers and retailers were sticking to buying patterns established before the tariffs. “The higher prices are being passed onto consumers, but whether they will continue to pay or shift to cheaper nuts remains to be seen,” he said.
While the US market remains challenging, there is progress in other markets. Hartman said South Africa was working to reduce the 12% tariff into China to zero. In India, Australia’s phased tariff reduction from the current 30% to zero by 2028 could open fresh opportunities by potentially shifting volumes away from other markets, creating gaps South Africa could fill.
“While buyers are navigating tariff and volume changes, macadamias remain an attractive option for product developers,” he said.
“We’re seeing renewed interest from a broad base of buyers as procurement shifts away from Australia. Our demonstrated value in providing high-quality macadamias will no doubt influence the narrative around origin versus quality in our favour.”
By Lindi Botha
