South Africa’s Macadamia Production Falling Far Short of Baseline Expectations, Despite a Larger 2022 Crop

Published 2022년 3월 3일

According to a recent survey by Macadamias South Africa, production for 2022 is forecast at 57,723 mt. This is 8% higher than 2021 and could be the second-highest crop on record. While this is a slight rebound after a tough 2020 and 2021, production is still far lower than industry baseline projections made in 2019 and 2021, and it seems that lower yields as a result of the weather are becoming the norm instead of the exception. On the other hand, even if production in 2022 turns out to be higher and closer to initial baseline projections, demand for South African macadamias remains strong and these nuts should easily find an export market.

Large discrepancies between baseline projections and actual production

South Africa’s macadamia production could hit 57,723 mt in 2022, according to a survey by Macadamias South Africa (SAMAC). This would be the second-highest crop on record, following the massive 59,059 mt produced in 2019 and 8% higher than last year’s crop. While 57,723 mt is still a remarkable crop, it is not quite on track with the highly anticipated boom for the industry. Two baseline projections, one made 3-years ago and one made six months ago, both grossly overestimated macadamia production. Both these projections were based on the increased area of macadamias coming into production, and yields that are consistent or slightly better than historic yields. The total area under macadamias can be estimated quite accurately, which would mean that the discrepancy between these baseline projections and the actual production, lies in the yield estimates. The discrepancy in the yield estimates can, in turn, be attributed to “abnormal” weather conditions over the last three years. However, given that weather has now been “abnormal” for three out of five years, it seems more and more as if lower yields due to climate change would need to be factored into any baseline projections made in the future. To illustrate the point, compare the difference between actual macadamia production since 2019 and the baseline projections made in 2019 by Source BI and 2021 by the Bureau for Food and Agricultural Policy (BFAP).

According to a long-term production forecast, developed by Source BI for SAMAC back in 2019, production for 2022 was forecast at 87,971 mt. It seems highly unlikely that production will come anything close to this number this year. This baseline forecast also overestimated production in 2020 and 2021 by 25% and 28% respectively, a clear indication that, while actual production remains in an upward trend, it is not living up to industry expectations as little as three years ago.

A more recent long-term forecast, by South Africa’s Bureau for Food and Agricultural Policy (BFAP), made in September 2021, expects production in 2022 to easily top 60,000 mt. This forecast might still be on target, as the 2022 crop will only be harvested from May to June, but again seems high. For the 2021 crop, the BFAP baseline projection overestimated production by 8%.

Historic data and future projections

Ten years ago, the area planted under macadamia was 18,359 ha. This increased to 50,113 ha in 2021. At least 31,000 ha of the total area under macadamias is less than 10 years old and around half of the total area is less than 7 years old. Macadamias typically yield only half of mature yields at year 7, and only from years 9 to 10 are bearing at full potential. When looking only at the area under macadamias, it would make sense that production should at least double within the next 7 years as in the BFAP estimate. However, for 3 out of 5 years now, yields were lower than “normal”.

The question is now if low yields have become the new “normal”, or if production will bounce back in the future. Perhaps these long-term projections were overly optimistic and did not take into account that, with climate change, high yields are the exception and low yields the norm. While these projections were based mostly on the increased area planted (and estimated future plantings), the weather and the effects of climate change are more difficult to predict. Over the last few years, conditions have been far from ideal. Warm and dry conditions over the last couple of years led to a 17% drop in production from 2019 to 2020. In a complete turnaround, and a shift from El Nino to La Nina weather patterns, overly wet conditions in September 2021 hampered pollination and flowering. It seems more and more as if the high yields in 2018 and 2019 were the exceptions, rather than the norm. However, if yields bounce back in 2022 despite a rainy September, the lower production in 2020, 2021, will be viewed as the exceptions.

South African Macadamias in Strong Demand

Final figures for 2021, released by the South African Revenue Service (SARS) show macadamia exports were a solid 18,432 mt (converted to a shelled basis). This is the third-highest on record (after 18,435 mt in 2018 and 23,255 mt in 2019) and pumped USD 281 million of foreign currency into South Africa’s economy.

This comes in a year with many challenges, the most severe being the worldwide logistical bottlenecks hurting much of South Africa’s agricultural exports. Macadamias seemed to have escaped much of the brunt, as again, nearly the whole crop was exported. According to SAMAC, South Africa exports 98% of its macadamia production on average.

Even with a higher production forecast for 2022, South African macadamias should easily find buyers. With earlier production estimates being much higher, aggressive marketing by SAMAC, has cemented an export market for South African macadamias. The recently established World Macadamia Organization has also done its part in promoting macadamias, especially under Chinese customers.