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AmberMacs’ expo goes from strength to strength

AmberMacs’ expo goes from strength to strength

Pictured above: Lize Roets, Joy Gulle, Lindria Lategan provided creamy samples of Giraf Macadamia Milk.

AmberMacs hosted their third Macadamia Expo this year with the event growing from strength to strength. Held from 8 to 9 February in White River, Mpumalanga, the occasion attracted hundreds of visitors and had more than 180 exhibitors showcasing everything a macadamia nut farmer needs to succeed. There were also a noticeable number of value-added products for sale, showing advancement in this under-serviced sector of the industry.

Johan Sutherland from Laeveld Trekkers gave farmers a peak at new equipment.

Saws and pruning equipment were on display. Pictured from left to right is Quenton Esterhuizen from STIHL, Bruce Bjerg from MPI, and Quinton van Rooyen and Monique Butler, both from Enviro Forestry.

Macadamia nut milk, ice cream, liqueurs, coffee and flavoured nuts were just some of the products demonstrating the versatility of these nuts.

Visitors were given a breakdown of macro, and macadamia specific related market information, and the latest on benchmarking and pest control research.

AmberMacs’ managing director, Philip Moufarrige, said the expo offered something useful for both seasoned and newer farmers alike, and aimed to benefit and support growers and suppliers through the sharing of the latest ideas and innovations in farming practices, technology, pest control, irrigation, dam building, pruning, harvesting and drying.

The annual expo, held in White River at the AmberMacs processing facility had over 180 exhibitors.

Marelize Kelder, Michelle Schnepel, Chane Ackerman from Michem Cleaning Supplies.

Economist Dawie Roodt and AmberMacs’ managing director, Philip Moufarrige.

Real-time e-commerce platform could revolutionise mac trade

Real-time e-commerce platform could revolutionise mac trade

Mpumalanga macadamia farmer Cobus Kok has launched a Macadamia Services Management (MSM) platform that he says will revolutionise the nut trade by providing real-time and accurate data for improved marketing and sales decisions by registered users.

The platform is designed to expedite kernel trade while steering away from nut-in-shell which is traded directly from farms.

Why do you think the platform is necessary for the sector’s growth?

It is now common the world over for traders in any commodity to have access to real time data to inform decision-making. The MSM platform allows for exactly that. While age-old one-on-one contact or relationship marketing is still critically important, e-commerce is evolving at such a pace it poses a real and viable challenge to existing marketing models. E-commerce allows buyers and sellers to gather all of the information they might need to make a buying or selling decision from any device. On the MSM platform, the information is trustworthy, and the buy or sell process is secure and easy.

As a trading platform, it makes it possible for all stakeholders in the value chain – from the farmer to the consumer and anyone in-between – to access pricing information. Each player can work out the value of their contribution. I believe this leads to fairer compensation at all levels. Exorbitant price mark-ups become easily visible, allowing users to navigate their way around those. Statistics have proved this eventually leads to higher farm gate prices and lower consumer prices. Lower consumer prices stimulate demand, resulting in increased macadamia consumption.

How did you come up with the idea for the MSM platform?

One of the issues affecting me most as a small-scale farmer and processor was the lack of information and transparency around price determination.

The South African Grain Information Services (SAGIS) is a perfect example of how information and transparency has resulted in price stability in an agri-sector. The outcome is that farmers, processors and traders can factor in cost versus revenue in their future planning and investment decisions. We haven’t had that in the macadamia industry to date. Farmers and processors are mostly at the mercy of speculative forces characterised by volatile trade cycles.

With my own experience as an exporter and the challenges I faced when negotiating with international dealers, I realised I had to have access to a level legal playing field, pricing transparency, and accurate and reliable market intelligence. The answer was clearly e-commerce, where the rules of engagement are set out before trading. I have also discovered that e-commerce is an effective way to narrow the gap between farm gate prices and consumer prices.

The MSM platform is designed to provide transparency, and users can view price, volume and trends in real-time. Armed with this information a farmer has the tools to evaluate his or her position before incurring risk. Our platform affords the macadamia industry an opportunity to move into the e-commerce world – similar to other agricultural industries – to reap the benefits of modern consumer behaviour, marketing and trade trends.

It goes without saying that the growth of e-commerce is exponential and pervasive. Our industry cannot afford to lag.

Where do processors fit?

We do not regard marketing divisions at processing facilities as middlemen, but rather as intermediaries between the processor and retailers. Retailers add a lot to the cost of macadamias for the consumer. Platforms like MSM have a moderating effect on this trend, offering an alternative for marketers as they get access to product at a much-reduced cost. It is a statistical fact that marketing success is directly proportionate to how many avenues a marketer explores.

MSM offers highly effective, cost-efficient access to marketing and sales personnel, which I believe will ultimately result in reducing costs.

What about shipping?

Because we only made initial provision for trading in kernel, shipping is handled by processors as agreed to by the contracted parties via the platform. Unless a farmer has his own processing facility or a contract to conduct toll-cracking through a processor, we do not expect them to get involved in trading at this stage We think that will be left to the processors – who have always had to guarantee that their product meets international quality standards. They will have to deal with any quality disputes between parties.

 

How will quality be handled on the MSM platform?

Quality assurance is guaranteed through third-party validation by MSM’s food safety quality management unit, which is staffed with contracted food science experts. We will keep physical samples of all products sold on the platform. These samples are for reference in case of a dispute. They will be available for analysis by independent accredited laboratories that wish to determine to what degree the results correspond with the original certificate of analysis, the factory’s retention sample, and the analysis of the product received by the customer. This is the basis of a process we believe can be managed via mediation, arbitration, or litigation, depending on the stance of the different parties.

In short, all of the usual rules and regulation are in place, with the added safeguard of third-party validation and arms’-length dispute resolution rules. This means all required high standards are met. I believe these safeguards provide peace of mind for buyers and processors.

How will you standardise quality and styles when there are no existing industry standards?

MSM has set up its quality and product specifications in line with the World Macadamia Organisation (WMO) requirements. The seller and buyer will agree to these standards when they accept the platform’s terms and conditions as part of their registration process. That means both parties would have agreed to the product quality and standards, as stated on the platform, prior to trading.

 

How do you feel about the future of South Africa’s macadamia industry as production volumes rise and prices fall?

There is, without doubt, a profitable future in macadamia farming. But our industry must adopt the right marketing strategies. And that means, by sheer necessity, including e-commerce and digital marketing in our toolbox. Currently macadamias are just 2% of the global nut basket. That shows how vast the scope is for a profitable enterprise into the future.

What is the one thing you wish all macadamia farmers knew about?

Forewarned is forearmed! Stay thoroughly informed on every aspect of the value chain – starting at the farm gate and ending with the consumer. Get involved in the collaborative management of the industry by participating in study groups, processor affiliations and SAMAC. Don’t wait for someone else to do something about a problem or issue. In my view, that is the best way to stay ahead of the game and to secure a viable and sustainable future for our farmers.

How does the platform work?

  • Buyers and sellers are required to register on the MSM platform. Once registration is received their credentials are checked – only legitimate buyers and sellers are eligible to trade on the platform.
  • If the credentials are acceptable, a trading license is issued to the buyer or seller.
  • The identity of buyers and sellers remains confidential. Once the transaction is concluded the buyer and seller are introduced to each other.
  • When sellers upload product – with their asking price – the listing is available to all buyers to view. Food safety and quality requirements are met by disclosing the required safety and quality data for the listing on the platform on a positive release basis. This is done two weeks before shipping.
  • The interested buyer can then accept the asking price for the listed product or put in a bid at a lower price. This bidding process is visible to other buyers who may also be interested in the product.
  • Once a seller accepts a bid, the transaction is concluded. A system-generated contract is made available to both parties.
  • When a buyer is looking to fill an order, the system automatically searches for and pairs the closest offer or order with the request. Similarly, a seller can fulfil the listing created by a buyer.
  • Buyers and sellers can filter listings according to their requirements to make sure they only view offers/orders which are of interest to them.
  • Those who register are only billed when they use the platform.
  • The price of any product is reflected on an Ex-Works basis in American dollars, but once a transaction is concluded, payment can be made in any world currency. Payments will not flow through the platform. Payment terms are agreed between the contracted parties within the provisions of a concluded deal.

 

Cobus Kok

Second-generation farmer and now the force behind the Macadamia Services Management platform Cobus Kok says his love for the land and farming began when he was a boy at his father’s knee.

“My father, Louis, was initially involved with the steel industry in South Africa, but his longing for the farm life never left him. As a child, born in the Free State, he fell in love with the Lowveld when he first visited the iconic Kruger National Park. In 1970 he realised his dream by buying a farm close to the Numbi Gate as a part-time endeavour while continuing with his business interests in the industrial town of Middleburg.

“At that time little was known about growing macadamia trees. It was through his friendship with Professor Cas Holtzhauzen from the Faculty of Agriculture Sciences at the University of Pretoria that he decided to plant the crop. The two of them, along with macadamia expert Philip Lee, were instrumental in setting up the country’s macadamia member body, SAMAC. He wrote the organisation’s first constitution, in fact.

“As a child, I spent weekends with my father on the farm and in the orchards, and my love for nature and macadamia farming grew from there.

“I joined the South African National Defence Force as a permanent member when I finished school and rose to the rank of captain after completing a degree in Military Science (B.Mil) from the University of Stellenbosch.

“My father retired from the steel industry in 1990 due to ill-health and in 1996 asked me to take up the reins.

“As someone who had worked with steel, my father had his own idea of what drying, de-husking and cracking equipment should look like, and when he couldn’t find equipment that met his standard, he simply designed and developed his own. This meant we developed and built our own processing plant for kernel in 2000. The production of our ‘pilot’ factory grew steadily until, in 2002, we felt we had exhausted all of our local marketing options and started marketing and exporting our own product.

“My father’s death in 2009 has allowed me the privilege to continue the journey he and our family began in 1975.

“My involvement in the macadamia industry for the past 25 years has ranged from farmer and processor to exporter and marketer. The immense potential of this sector has always attracted me, and I believe it is ripe with opportunities for innovation and growth.”

 

 

 

Rolls Royce macadamia plan for KZN small-scale growers

Rolls Royce macadamia plan for KZN small-scale growers

Pictured Above: Siphelele Vumisa on his farm in the deep rural area of Macambini on the northern KwaZulu-Natal coast.

When Covid-19 resulted in the lockdown of the world’s economies, young mechanical engineer Siphelele Vumisa began realising his dream to plant macadamias in the deep rural area of Macambini on the KwaZulu-Natal North Coast.

While small gum plantations and sugarcane plots still dominate the region’s farming landscape, Vumisa believes the diversification opportunity offered by planting macadamia trees is “immeasurable” for local subsistence farmers.

In 2000, Vumisa was the first student ever to score 92% in the final mathematics exam at the nearby Inkosi Somshoko Secondary School. He then applied for, and was awarded, a bursary to study engineering with the South African Air Force. After working for four years at the Waterkloof Air Base he moved to the UK, where he was employed for two years by Rolls-Royce as a systems engineer.

In the rainy season cover crops were planted under the guidance of Simon Hodgson from AGT Africa – the remains of those now provide mulch for the trees.

Diversification imperative

Since the decline in the local sugar industry after an announcement in 2009 by the European Union that it would no longer ban quotas on sugar beet production in the single market, countries like South Africa and neighbouring eSwatini have scrambled to find production diversification options as demand for the domestic crop tailed.

These efforts were then accelerated in 2015/16 when the east coast of the country suffered one of the worst droughts on record.

Then, in 2018, the government announced the imposition of a Health Promotions Levy (HPL) on the sugar content in fizzy drinks.

This had a massive impact on the sector as major customers, such as SA Bottling, cut back extensively on the sugar content in their beverages. It is estimated that at least 14% of the 65 000 people employed in the sugarcane sector have lost their jobs as a direct result of the government’s decision. In 2021, it then introduced a 16.1% increase to the national minimum wage for farm workers.

Since then, the minimum wage in the agriculture sector has increased exponentially year-on-year, totalling 29.5% over the three years.

At the same time, sugar prices on the world market bottomed out as countries like Thailand and India ramped up their production, resulting in a supply glut. This was further compounded by growing consumer resistance to consuming sugar, based on health concerns.

From Tuesday to Thursday, the Vumisa family oversees the management of the macadamia orchards: from left, Isaac Vumisa, Mncedisi Vumisa and Ntombifuthi Vumisa.

The milling sector continues to reel from the impact of the July 2021 political violence that erupted in KwaZulu-Natal and Gauteng. At least three mills were forced to shut down at the height of the harvesting season after being threatened with looting and arson.

Today, two of those mills – Tongaat Hulett Sugar and the Gledhow Sugar Company – are in business rescue. This has meant extensive job losses in the industry and the onset of a milling crisis that has seen massive tonnages of harvestable cane failing to make it to the factories since the 2021/22 season.

In February 2022 when Russia invaded Ukraine – both countries supply most of the world’s wheat and agri-fertilisers – input costs more than doubled for local crop farmers.

In the orchards is a variety of macadamia trees, including 814s, 816s, Nelmac 2, A4s and Beaumonts.

The climate crisis has also played a role as unseasonal rain, followed by destructive flooding, swept through KwaZulu-Natal and Mpumalanga in 2021 and 2022. As fields and infrastructure were washed away, profit margins for small-scale and commercial growers were pressurised even further as crops rotted in the fields.

With more than 20 000 small-scale sugarcane farmers, mainly in the deep rural areas of KwaZulu-Natal and Mpumalanga, financially dependent on the success of the industry, the fall-out from these events means sustainable production diversification in the region is urgent.

The young macadamia trees hug the hillside as heavy coastal winds whip by.

Small-scale macadamia sector plan

Vumisa, who is a consulting engineer based in Pretoria from Tuesday to Thursday, and a macadamia farmer from Friday to Monday, says he is ready to work with the government and the private sector to develop a small-scale grower macadamia industry at Macambini.

Watering the young trees is done manually by the staff carrying buckets filled from a water cart parked in the orchards.

“So far, I have planted up seven hectares of 814s, 816s, A4s, Beaumonts and Nelmac 2, with an extra two hectares to be planted late March this year. The learning curve has been steep, but I have had the support of both commercial farmers and consultants like Simon Hodgson, from AGT Africa, on cover crops to improve my soils. He recommended the mac mix, which was hugely successful. Brendon Liebenberg from GuanoBoost has assisted me greatly with advice on how to feed the trees. My trees are really doing well – especially the Nelmac 2s –and the potential for expansion here is immeasurable.”

Vumisa, who had invited provincial government officials from the Department of Agriculture to view the progress on his operations, said what he needed now was funding to assist growth and development.

“My plan is to set up a de-husking plant on my land. All of the small-scale farmers will bring their macadamia nuts here to be de-husked and then transport will take them to the Green Farms Nut Company for processing.”

Vumisa warned however, that it was an imperative that the growth and development of small-scale-farmer orchards was aligned with best practice. “If we want to be successful in this endeavour then we must follow the proven scientific approach. Everything is scientific. First, the soils will have to be tested and the land preparation must be up to standard. We can’t cut corners.”

Siphelele Vumisa, centre, with his staff: back, from left, Akhona Mzimela, Khaya Buthelezi and Siyabonga Shange. Front, Kwanele Khanyile and Siphamanda Mpanza.

He said he also wanted to set up accommodation and training facilities for agriculture graduates wanting practical experience. “We can give the young people a career path in agriculture that will not only secure food security for the country, but provide a range of employment opportunities for them.”

Another goal is the establishment of a nursery. “I would like a 20 000-tree nursery right here to give our neighbours easy access to good tree-stock.”

Income avenue

The small-scale farm falls under the auspices of the Ingonyama Trust Board, which has 2.8 million ha on its books, and is controlled by South Africa’s traditional leader system under the administration of the KwaZulu-Natal provincial government.

The first hectare of macadamia trees was planted at the Vumisa homestead in 2020 as an experiment.

The land was used to produce sugarcane for well over 20 years, Vumisa said.

Scuffing the bleached sand with his boot he added: “We have sandy soils here with very little life left in them. The soils in old cane fields are usually compacted and severely lacking in nutrients. I am focusing on upping the carbon content, meaning I am putting on a lot of cattle manure. I also planted cover crops last year to improve the organic content of the soils while at the same time providing a protective cover for moisture retention.”

With a strong berg wind blowing across the orchard, the young farmer added that the heat could become almost unbearable.

“As you can see, I have planted lines of Casuarina Equisetifolia as well, and left rows of old cane between the young trees to protect them from the wind. At the moment we water all of the trees by hand in buckets.”

Commercial timber and macadamia farmer William Davidson described Vumisa as a visionary. “Siphelele is a bright young farmer who is an asset to the industry. He has a vision which is not only doable but could change the face of the macadamia industry in South Africa. The plan will give rural communities another income avenue, which is vital for the health of our agriculture sector and socio-economy.”

Brendon Liebenberg – North Coast sales rep for GuanoBoost – who has assisted in assessing the nutrition needs of the trees in the orchards.

 

 

 

 

 

 

MSM ADDRESS BURNING MACADAMIA QUESTIONS

MSM ADDRESS BURNING MACADAMIA QUESTIONS

In the rapidly evolving landscape of macadamia trade, the presence of sudden supply surges looms large, presenting both challenges and opportunities for stakeholders across the value chain. Cobus Kok, MD of Macadamia Sales Market (MSM), underscores the critical importance of proactive and strategic planning in the face of uncertainty.

The sudden surge in macadamia supply will require the industry to stimulate demand for kernel, especially in the case of low demand for NIS or low pricing for NIS. How can we do this on short notice when a given scenario demands it? This is a question that warrants a deeper exploration by addressing these potential scenarios. According to him, the answer is clear-cut.

“The rapid expansion of recent plantings can result in an exponential increase in crop size. Or, dependence on a single market like China can lead to price shocks where price levels fail to exceed local production costs, leaving processors and farmers with the dilemma of finding new markets or facing losses. But simultaneous capacity expansions by various players might also require finding new kernel markets swiftly to accommodate increased volumes.

He also stresses that we must be watchful of the repercussions if such a scenario catch the industry unprepared.

“The nature of product and market development would not allow for sudden surges in demand. Typically, healthy growth occurs gradually under stable conditions. In our case, though, the patterns are disrupted by the dominance of, and relatively effortless adjustments towards NIS trade. He further continued that the industry players may respond with a sudden surge in kernel supply that could likely trigger speculative price drops, exacerbating market volatility and risk. But also, farmers may be tempted to leave the crop on the orchard floor. Or they may figure it best to supply the product at below production cost to recover some of the production input cost, but then determine if the venture is worth continuing with.

Lastly, he also places focus on the question: Would a collaborative approach or a competitive approach within the industry best equip it to deal with these challenges?

Cobus states that in a purely competitive environment, enterprises tend to guard market information closely, hindering broad access to market insights and hindering swift strategy development. “Conversely, a collaborative approach, with greater transparency and real-time information sharing, enables stakeholders to foresee and collectively address crises, promoting sustainability and growth across trade cycles.”

Cobus says the key lies in transparency, allowing participants to assess risks and avoid panic reactions, fostering sustainable rather than destructive responses to market fluctuations. Participation in a Trade Platform facilitates the proactive management of such situations.” Advanced knowledge of increased kernel trading allows buyers and processors to prepare, mitigating sudden market shocks and promoting sustainable market growth.

Similarly, if you reflect your capacity to deliver NIS in advance and the market signals in advance that it is not prepared to meet your price conditions, you can commit more NIS to processing and notify the kernel market in advance to prepare for product coming their way, and at the same time diminish the downward pressure on NIS market price because less is going towards supplying it.

The MSM platform provides the means and mechanisms for industry collaboration and the discovery of fundamental conditions necessary to implement a common strategy and realise a common goal: prosperous growth for the greater good. For more information visit: macsm.org

Simplifying irrigation design through digital innovation

Simplifying irrigation design through digital innovation

It is not every day that you implement a new irrigation system, but everyday technology and options for optimal irrigation evolve to suit the changing needs of climate, farmers, and consumers alike.

Rivulis knows this, and how to make sure irrigation professionals are at the forefront of developments to always provide the best insight and advice to customers.

“Our ongoing commitment to making irrigation accessible and farmers profitable is paramount. We love what we do, and continually invest in staying ahead of the curve. This is why we have built on the Rivulis Hydraulic Tool. Accessible from a mobile phone, and targeted to technical support, sales teams, dealers, and sophisticated farmer users, the Hydraulic Tool is a simple to-access in-field tool that allows you to input a variety of specific details and variables for trusted irrigation estimations” says Uri Antebi, Software Product Manager, Rivulis.

Rivulis is a global micro-irrigation leader focused on promoting a sustainable agri-food supply chain both to feed our planet and save it from the perils of climate change.

Open to all, register for free, the Hydraulic Tool is a complimentary bow in the string to Rivulis’ other powerful smart farming tools like the well-respected WCADI, used extensively by irrigation engineers around the world to design some of the most sophisticated and advanced irrigation solutions.

“The user interface is second to none, and the dedication to understating the installer’s needs is evident, I am confident that the grower is given the best estimations and recommendations. Hydraulic Tool makes it possible to offer better irrigation design planning and presentation. To show farmers the proposed design in-field considering the effect of the slope in the configuration of their emitter, even when there is no internet connection is impressive”, shares Ruben Garcia, Product Manager in Rivulis EU, Spain.

Growing to a leadership position and through extensive acquisition of the most trusted brands in the market, like most recently NaanDanJain, Rivulis has the broadest range of micro-irrigation solutions, and the Hydraulic Tool has been updated to reflect this extensive portfolio of high-quality products, making sure customers get the very best, every time.

“Offering key information and estimates upfront about a project, means you know what you are in for. Through its professional user interface, the tool has been updated to include the full product range, allowing for fully customizable data inputs directly from the field, reducing margin of error and significant time savings,” continues Antebi.

Benefits include:

  • Lateral calculations: instantly retrieve the hydraulic properties of Rivulis and NaanDan products from the extensive in-built database. Easily create your lateral design, including factoring in the impact of sloping ground and lateral length required. The Hydraulic Tool automatically calculates head loss, the pressure required at the start of the lateral, and other parameters to create a design that delivers optimum performance.
  • Sub-main and mainline calculations: the calculator can determine the optimum diameter and length configurations to meet the required flow rate, while also calculating head loss and velocity. It allows you to account for variables such as sloping ground and whether the sub-main is in the middle or at the end of the field.
  • Evaluate and overall system: quickly get a picture of the overall system by using the Irrigation Design component. By entering the necessary information (water emission product, irrigation area, application rate, flow rate of water source, and maximum available irrigation time) Rivulis Hydraulic Tool determines if your water source is sufficient for irrigation and shows necessary adjustments for desired applications.
  • Determine the best sprinkler design layout: Every Drop Counts (EDC) is an inbuilt tool that evaluates sprinkler profiles and coverage. It calculates CU and DU based on your selected Rivulis or NaanDan sprinkler and layout configuration, providing a visual representation of the water application rate.

Sector should brace itself for tumultuous times

Sector should brace itself for tumultuous times

Pictured Above: Marlene Louw, senior agricultural economist at the Absa Group

As the world teeters on the brink of World War III and foreign policy tensions between South Africa and the United States add impetus to worsening trade relations between the two countries, experts are warning of a tough year ahead, particularly as the country heads to the polls.

Economists and industry experts at the AmberMacs expo earlier this year highlighted world and domestic developments that could have an impact on agricultural operations in 2024:

  • The possibility of world war
  • South Africa’s worsening relations with the United States
  • Elections in 50 countries, including South Africa
  • China economy slows
  • India a promising export destination
  • Volatile input cost prices
  • Low prices drive mac demand
  • Agri-processing is key for success in the mac sector

Delegates at this year’s AmberMacs Expo at White River, Mpumalanga, were handed a stark picture of the year ahead by several economists who headlined the event.

The downward spiral in the economy is expected to intensify, while mounting political tensions across the globe – the Russian war in Ukraine, and the conflict in the Middle East, which is igniting a wider conflict between Iran and the US – have global markets jittery.

Dawie Roodt, chief economist at the Efficient Group, said: “The world has never been this close to a potential world war since the 1960s.”

(In 1962 the former Soviet Union planned to place nuclear missiles in Cuba after a failed invasion of the island by the United States, better known as the Bay of Pigs invasion.) https://history.state.gov/milestones/1961-1968/cuban-missile-crisis

China’s economy was pegged as the star performer in 2023 – despite its property market crisis – growing at a rate of 12%. But, the economist warned, expectations for the Red Dragon were now pegged at a growth average of just 3% a year, especially as the impact of the property market crash deepens across the value chain.

“Last year China’s population contracted for the first time since the 1960s. This is a major headwind for economies, as we are seeing in Europe. As President Xi Jinping enforces more economic reform, we will see a poorer and older Chinese population,” Roodt said.

Growth in the single market is also on the skids as the European Union (EU) finds itself in a recession coupled with an ageing population, adding further downward pressure on economic activity.

On the home front, Roodt detailed how South Africa had faced one crisis after another since former President Jacob Zuma came to power in 2009. “Local authorities and state-owned enterprises have collapsed. This has significant consequences since it means we don’t have access to basic service provision.”

Dawie Roodt, chief economist at the Efficient Group. (Image: LinkedIn)

As a result, he expected a coalition government to take over the reins of power after the national election later this year. This, he added, would deepen investor uncertainty beyond polling day, leading to weak economic growth and volatile exchange conditions.

For the macadamia industry, this forecast suggests volatile and higher input costs, putting major strain on budgets and shrinking profit margins for the year ahead.

Marlene Louw, who is the senior agricultural economist at the Absa Group, said South Africa’s agricultural sector had been under strain since 2022, which had culminated in negative sentiments and a decline in the agri-business confidence index. “Over the past two years, all agricultural industries have faced headwinds, and macadamias were not spared as they were in previous years. Delays and inefficiencies in our ports, increased political uncertainty, high interest rates, loan repayment issues, and climate-related issues are weighing down the sector,” she said

Farming at a loss

While many of South Africa’s star commodities like citrus, avocados and blueberries have recently lost their shine, macadamia farmers’ troubles were compounded by the spectacular fall in profits. As nut prices hit the roof in 2018, many farmers overcapitalised while paying little attention to efficiencies. The fallout from the price crash and input cost hikes meant operating costs and debt levels were suddenly unsustainable.

Compounding the problem was that many calculations were based on average yields of 4.5 tons per hectare, while research has shown a more realistic 2.6 tons per hectare – and only on full bearing trees.

And, in a presentation at the expo event by the managing director at Source BI, Juan Winter, the crux of the matter was highlighted. In 2019, macadamia farmers earned on average R203 910 per hectare compared with R82 518 per ha in 2023.

Juan Winter, Source BI

“Macadamia nut prices dropped more than anyone thought. There were three consecutive years of price decreases. Then input costs rose rapidly, taking production costs per hectare from R56 000 in 2019 to R69 000 last year. Unsound kernel recovery (USKR) has also increased, going from 1.8% in 2020 to 2.8% last year,” Winter said.

While most of South Africa’s orchards have yet to reach full maturity, supply and demand will stay in buyer favour – at least for a few more years – until consumption increases.

Winter said most of the trees in this country were in the five- to six-year-old category, with 18% seven to eight years old and 13% at three to four years old.

“There is still a lot of volume that needs to come on board. The wave is only starting now,” he said.

Lower prices drive demand

The experts at the event agreed, however, that the lower prices were stimulating demand and that interest from product developers had picked up, which they believed boded well for improved pricing stability in the years ahead.

Both Winter and Louw believed a price increase of between 15% and 20% was possible this year. “Most of South Africa’s stock is sold, meaning the season starts with a clean slate,” Winter said.

Louw predicted nut-in-shell (NIS) prices could come in at US$2,80 per kg this year, reaching US$3,00 next year and US$3,20 in 2025, while Winter predicted income per hectare would increase to about R121 87, while input costs would mirror those of last year, totalling about R67 000 per hectare.

Roodt’s oil price prediction was pegged at US$80 per barrel of Brent crude, with scope for further decreases depending on whether international politics derailed supply.

Both NIS and kernel demand were looking positive for the year and although the EU economy was lagging, the US – which is a key market for kernel – remained on a bull run.

“It’s not the recession we expected,” Roodt said. “The US seems to be growing without an end in sight, adding 400 000 jobs each month. Their unemployment rate is below 4%, which means they have spending power. The US is also expected to start cutting interest rates this year, and South Africa will follow suit.”

Another market with high potential for South Africa’s macadamia nuts is India.

India’s population growth overtook China last year, with little sign of slowing down. “The Indian economy will shoot out the lights in the next decade. The population is young and urbanising and this creates a lot of opportunity. This is a market you need to get your product in to,” Roodt urged the AmberMacs gathering.

Giraf mac milk – Giraf macadamia nut milk is a vegan milk-replacement produced in South Africa by AmberMacs. This is one of the many value-added products that managing director Philip Moufarrige believes will bring sustainability to the industry in the long term.

The right position

This year’s price recovery is due mainly to an enlivened Chinese market, but economists warned the macadamia sector not to rely too heavily on the Asian NIS market as long-term growth prospects were not positive.

Philip Moufarrige, managing director of AmberMacs, said he believed by exporting nut-in-shell the industry was giving potential profit away to the Chinese. “The only way to bring long term sustainability to the industry is to add value in South Africa before exporting. This means developing our own ranges of butters, flours, milks and cheeses,” he said.

Roodt agreed inadequate value-add to the crop by the domestic industry was a problem. “It’s understandable – we don’t have a very competitive macro environment, electricity is expensive and unreliable, it’s dangerous to do business (in this country) and difficult to get the product out of the country via our ports. But by collaborating across the industry, overhead costs can be shared and economies of scale developed that would make value-adding more feasible. Don’t expect government to put systems and infrastructure in place to make it easier; find your own solutions and work around them,” he said.

Moufarrige said he believed some positives had emerged from the turmoil of the previous two years, which included farmers having become leaner and more efficient while examining their expenditure and costs more closely. “Looking ahead, I would urge them not to forget the lessons learned during these past two years. Don’t skimp on spray programmes, learn (about) the benefits of using natural predators, and keep planting. The prospects for the industry still look favourable,” he added.