Opinion

Zambia Macadamia Exports and Nursery Tree Purchases Point to Soaring Production

Macadamia Kernel
Raw Macadamia
Zambia
Emerging Market Opportunities
Published Jan 18, 2024
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Zambia's macadamia industry is small but rapidly expanding, with most production coming from large commercial farms. Most macadamias are produced for export – figures of which have soared in recent years, indicating accelerating growth and a crop of close to 2,000 mt in 2023. Based on the increase in exports and Zambia’s import of nursery trees, production is projected to increase at an even higher rate over the next five years. Production could reach 6,000 mt to 7,000 mt by 2028 and close to 10,000 mt by 2030. The underdeveloped export supply chain presents both a barrier and an opportunity for the Zambian macadamia sector. Currently, most macadamia exports are redirected through South Africa, which could be a missed opportunity for direct exports to consumer countries.

Industry Landscape

Zambia’s macadamia production is small but is rapidly expanding. As such, industry statistics are virtually non-existent. However, macadamia exports and nursery tree purchases point to accelerating growth, with Zambia emerging as a significant player in the macadamia industry.

Zambia’s macadamia production is dominated by large commercial farms, which have identified the potential of this luxurious nut. Nuts can be grown and marketed in a free market economy since the industry is still small and free from extensive government policies. Macadamias are produced mostly for the export market, which is evident from the large increase in exports.

The Northwest and Copperbelt regions have the highest areas dedicated to macadamia production and have conditions suited to production. Macadamias are irrigated to compensate for the irregular rainfall experienced in Zambia. Production applies modern orchard management systems, fertigation practices, regular soil and leaf sampling, and orchard sanitation. Production systems are based on those applied in South Africa, the world’s largest macadamia producer. Varieties developed in South Africa are also being propagated in Zambia.

Exports Indicate Growing Production

Zambia’s macadamia exports soared from virtually nothing ten years ago to more than 1,900 metric tons (converted to an in-shell basis). Domestic consumption is comparatively low, as most production is destined for the export market. This could indicate a crop of close to 2,000 mt in 2023. This is still less than 1% of global macadamia production but indicates how the industry is expanding rapidly.

With Zambia being a landlocked country with an underdeveloped supply chain most macadamias are exported by truck to South Africa. From there, it is re-exported. All of Zambia’s exports in 2022 and 2023 were destined for South Africa, while small volumes were exported to neighboring Malawi in previous years.

With most macadamia farms in Zambia being large commercial farms, there has also been significant investment in primary processing facilities, including for dehusking and shelling macadamias. This has led to a significant increase in shelled macadamia exports.

Source: Trade Map, Zambia Central Statistics Office

Zambia’s Nursery Tree Imports Indicate Continued Growth

Zambia sources nursery trees domestically and from South Africa, and to a lesser extent from Malawi. Large commercial farmers have taken to grafting their own trees. This way, the best-performing trees, well-adapted to Zambian conditions, are grafted onto rootstocks, improving productivity. While this practice is becoming more common, large volumes of trees are still being imported from South Africa.

In 2023, Zambia imported a record 916 mt of edible fruit and nut trees, shrubs, and bushes from South Africa. According to the South Africa Macadamia Association (SAMAC), South Africa exported 407,363 macadamia nursery trees to Zambia in 2022. There is a high correlation between the macadamia tree exports reported from South Africa to Zambia, and the import of edible fruit or nut trees, shrubs, and bushes. Consequently, it can be assumed that most imported trees from South Africa that Zambia reported under HS code 060220 are macadamia trees. This indicates that the growth in macadamia production will increase, even at an accelerated pace in the future.

Most trees are planted soon after they arrive in Zambia, however, some might be in storage (on-farm or at nurseries) for a significant amount of time as farmers prepare to plant them. It takes trees three to five years after planting to produce a significant amount of nuts. This equates to a three to six year delay between when nursery trees are imported and when this is reflected in production. However, nursery tree imports indicate that Zambia’s macadamia production could more than triple in the next five years, topping 6,000 mt to 7,000 mt by 2028, and reaching as high as 10,000 mt by 2030 on an in-shell basis.

Source: Trade Map, Zambia Central Statistics Office

Industry Outlook

With large commercial farms dominating in Zambia, the industry is well organized. Large investments in these farms subsequently led to investments in processing facilities, the emergence of nurseries specializing in macadamia trees, and input providers specializing in servicing the macadamia sector. Most commercial farms have adopted modern production practices similar to South Africa’s, which require significant investments.

Smallholder farms face several barriers to entry. The high costs of nursery stocks and the long waiting period before nuts provide a return on investment have discouraged smallholder farms from entering the industry. However, intercropping macadamia trees with cash crops can alleviate cash flow constraints.

One obstacle, which is also an opportunity for potential exporters, is the underdeveloped supply chain. Most macadamias, even kernels, are still exported to South Africa, from where they are then re-exported to consumer markets like the United States (US), China, and Europe. There is a huge potential for Zambian macadamias to be exported directly to these countries if the logistical challenges in Zambia can be overcome.

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