Nut inshell prices strengthen as processors eye peak of harvest 

May 10, 2024

Nut inshell (NIS) prices increased in the global macadamia market during the week ending on Friday as market participants anticipated an uptick in trade activity in the weeks ahead as South Africa’s harvest reaches its peak. 

Driving the move: Current trade for South African NIS 22+ appears to have found a floor at $3/kg CIF China, mainly because larger South African processors have restricted their sales in the NIS market this year. Most current inshell trade was being closed by small-to medium-sized processors and traders. 

But as receipts of South Africa’s dominant Beaumont variety are now coming in, processors may come under pressure to start moving product due to capacity constraints, sources said. South Africa’s harvest started in March and will end in July. 

What they’re saying: “Installed capacity in SA is not big enough to crack all the nuts,” a trader said on Thursday. “As inshell comes in, [processors] need to store it, and that will bring pressure on the market. They can’t afford to sit too long on the goods.” 

“The bigger guys have not sold anything, and that is creating price uncertainty,” a South African processor said on Wednesday. 

Tell me more: Trades for South African NIS 22+ were reported between $3-3.10/kg CIF China during the May 3-10 assessment period. Stratamarkets assessed the item at $3.05/kg CIF China, up 3 cents on the week. A trade for South African NIS 25+ was reported at $3.50/kg CIF China. No trades were reported for South African NIS 20-22, although offers were submitted at $2.40-$2.50/kg CIF China, and the item was assessed at $2.35/kg CIF China, unchanged. 

Australian NIS prices firmed. NIS 22+ was bid as high as $3.55/kg CIF China and offered at $3.80/kg CIF China. Stratamarkets assessed the item at $3.68/kg CIF China, up 36 cents. 

High elasticity of demand in China, the largest nut inshell market, may limit price increases. Although there is a boom in the value-added coated, flavored nut business in China as retailers are making good margins, around 80% of imports are still consumed as traditional roasted nut inshell. This market often experiences large swings in demand and is price-sensitive, sources said.  

“If the buyers think the price of macadamias is too high, they will just drop it if they know almonds or pistachios are much cheaper,” said the trader. 

Kernel market 

Kernel prices increased across the board during the period amid limited availability. Several processors said they are well sold on kernel items to Europe due to the small carry-over of 2023 stock, and retailers are showing a greater appetite to restock this year.

South African Style 1L traded between $12.75-$13/kg CIF Europe during the assessment period and was assessed at $12.88/kg CIF Europe, up 89 cents. South African Style 2 traded from $10.90-$11/kg CIF Europe. 

Look ahead 

Market participants said they were still assessing whether floods in Kenya caused by above-normal rainfall during the country’s March-May rainy season would adversely affect macadamia production.