Opinion

Vietnam’s Ambitious Plan to Develop Macadamia Production could Change Global Supply Dynamics

Published Mar 30, 2022
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Vietnam plans to increase the area under macadamias to 130,000-150,000 ha by 2030, and a vast 250,000 ha by 2050. This means Vietnam will produce 20% of the world’s macadamias by 2030, compared to only 3% currently. Other countries are also expanding macadamia production, the most significant being China, whose production could even reach 350,000 mt in 2030. This means Asia will become the main supply hub for macadamias, at the expense of Southern Hemisphere producers.

Vietnam has ambitious plans to become one of the world’s largest macadamia producers in just 8 years. A plan to rapidly expand macadamia production was signed into action in March by Vietnam’s Deputy Prime Minister, after years of research confirmed the viability of macadamia production in North-eastern Vietnam.

Under the program, Vietnam plans to increase the area under macadamias to 130,000-150,000 ha by 2030, and a vast 250,000 ha by 2050. The current area under macadamias is estimated at only 16,500 ha. In terms of volume, Vietnam plans to produce 130,000 mt by 2030 and 500,000 mt by 2050.

Rapid Expansion is Needed to Reach Milestones

Macadamia trees take up to 7 years to produce a commercial volume of nuts. Due to macadamias only being cultivated for a comparatively short time in Vietnam, historic data is limited. However, yield estimates from South Africa, the world's largest producer, give an indication of yield expectations in Vietnam.

According to historic data provided by Macadamias South Africa (SAMAC), 0-4 year-old trees yield 200kg/ha annually, 5-6 year-old trees yield 600kg/ha, and 7-8 year-old trees yield 1,400kg/ha.

Thus, to reach the ambitious targets set by the project, planting in Vietnam would have to kick off immediately. If any area less than 50,000 ha this year, or at least 100,000 ha within the next two to three years is planted, attaining the production goal of 130,000 mt by 2030 will become very difficult.

Reaching the production target of 500,000 mt in 2050 seems attainable if the project does get off to a flying start. If most of the 250,000 ha planned for 2050 are already under mature trees, yields could be higher than 2,000 kg/ha. Trees that are older than 9 years old often give yields of 2,000-2,500 kg/ ha in South Africa. This still means that production and expansion in Vietnam will have to run smoothly for nearly 30 years in order to reach these milestones.

Changing Dynamics in World Supply

Global macadamia production is estimated at 276,603 mt for 2022 by the International Nuts and Dried Fruit Council (INC). The newly formed World Macadamia Organization (WMO), estimates world production will increase to an estimated 455,000 mt in 2025 and 660,000 in 2030. Given these projections, by 2030, Vietnam would have a market share of 20% of world macadamia production, where currently it produces less than 3% of the world’s macadamias.

Vietnam (along with South Africa, Australia, Kenya, the US (Hawaii), and Guatemala) is a member of the WMO, and its ambitious expansion plans most likely formed part of the calculations for the WMO’s 2030 estimate. However, individual country estimates for macadamia production by 2030 outstrips the WMO estimate.

South Africa’s production could increase from 57,723 mt to 165,000 mt by 2030 according to the Bureau for Food and Agricultural Policy (BFAP). Australia’s macadamia production is expected to increase from 54,930 mt in 2022 to 70,000 mt in 2030, according to a statement made by the Australian Macadamia Society last year.

China, currently the world’s third-largest producer, at an estimated 50,000 mt in 2022 is also developing its production very rapidly. An estimated 275,000 ha has been planted in the last few years, most of which is in Yunnan province, just across the border from the areas earmarked for expansion in Vietnam. Only 20% of China’s macadamia areas are already bearing nuts, but by 2030, nearly all these trees will be mature. Future production estimates for China vary greatly, but production could easily top 350,000 mt if yields in China follow the same pattern as in South Africa, but again this is under the assumption that all goes well for the next 8 years. Production in many other growing regions is also expanding rapidly. All things considered, Asia will be at the helm of macadamia supply in the future, at the expense of the Southern Hemisphere.



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