Macadamia at a Crossroads: Can South Africa Keep Processing Local?

After more than a decade of rapid expansion, South Africa’s macadamia industry is entering an era marked by deep structural shifts and intensified strategic decision-making. Formerly turbo-charged by strong prices and accessible finance, the sector now stands at a crossroads: the growing trend toward exporting high-value in-shell nuts to Asia threatens the long-term viability of domestic processing, risking not only local employment and technical know-how, but also the country’s global market standing and long-term pricing power.

Industry leaders, gathering at the Ambermacs Macadamia Expo, have voiced mounting concern: if value-added kernels are processed increasingly offshore, the profitability and resilience of the domestic sector could erode. Underutilised plants face rising costs and layoffs, while the sector’s reliance on bulk commodity trading could become entrenched. As growth moves toward consolidation rather than expansion, key players stress the urgent need for efficiency, strategic investment, and efforts to retain value addition in South Africa if the industry is to weather the coming storm.

📈 Prices

Product	Origin	Location	Delivery Terms	Latest Price (EUR/kg)	Previous Price (EUR/kg)	Date	Sentiment
Brazil nuts	Netherlands	Dordrecht, NL	FCA	6.50	6.50	2026-02-21	Stable

Note: Brazil nut pricing included for broader nuts sector context. Macadamia kernel prices are under pressure due to increased in-shell exports and weaker global demand.

🌍 Supply & Demand

• Rapid Expansion, Now Slowing: Macadamia orchards in Africa grew from ~17,000 ha (2010) to >80,000 ha (2022). Strong prices and easy finance drove this boom.
• Current Shift: Rising in-shell exports to Asian markets, chiefly China, are reorienting supply chains and undermining domestic kernel processing. The focus on in-shell nuts risks making South Africa a raw commodity supplier rather than a value-adding agri-processor.
• Weaker Demand & Margin Compression: Global demand softened just as production surged. Downward price pressures and squeezed profit margins now define the market environment.

📊 Industry Fundamentals

• Value Chain at Risk: Exporting high-cracking-value nuts means the most profitable processing steps (cracking, grading, value-added kernel production) are increasingly performed offshore. This could become irreversible as global buyers adjust pricing structures around in-shell nuts.
• Processing Plants Under Strain: Lower plant utilisation pushes up fixed costs and raises threat of closures, layoffs, or asset write-downs. Industry experts warn restoring kernel margins in future will be difficult if current export patterns become entrenched.
• Consolidation Likely: Smaller or higher-cost producers face pressure. Asset write-downs and farm sales may accelerate between 2026 and 2028, with supply growth stabilising around 2032.

🌦️ Weather & Crop Outlook

• Established Regions: KwaZulu-Natal, Mpumalanga, and Limpopo are dominant. Those with modern cultivars and efficient orchards will fare best.
• Weather Impact: Recent seasons have seen generally supportive weather, but irrigation scheduling and precision management are seen as key to future resilience given climate volatility.

🌏 Global Position

• South Africa: The world’s largest macadamia producer. Asia (especially China), Europe, and North America remain the main export destinations.
• Value-Added Margin: Asian in-shell demand threatens South Africa’s historical advantage in kernel processing and export.
• Downstream Effects: If skilled labour is lost or plants close, the sector will cede market power to Asian processors, making future recovery in value-added exports difficult.

🔎 Trading Outlook & Recommendations

• 🔹 Monitor policy and industry signals: Watch for efforts to incentivise domestic processing or limit raw in-shell exports.
• 🔹 Producers: Focus investment on efficiency—precision farming, irrigation, and higher recovery rates. Large, established producers should prepare for consolidation via strategic acquisitions.
• 🔹 Buyers: Short-term opportunities exist in in-shell imports, but be wary of longer-term supply chain risks if processing migrates abroad.
• 🔹 Traders: Kernel prices may remain under pressure—consider hedging, but monitor for policy pivots or logistical constraints that could rebalance supply-demand.

📆 3-Day Regional Price Forecast (Selected Nuts)

Product	Exchange/Market	Current Price (EUR/kg)	Forecast Range (3 days)	Sentiment
Brazil nuts	NL FCA	6.50	6.45 – 6.55	Stable/Soft
Macadamia in-shell	Local (ZA)	N/A	Slightly lower to stable	Soft