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Kernel prices nudge higher on better demand and supply uncertainty

May 24, 2024

South Africa-origin, premium-grade kernel prices rose in the global macadamia market during the week ending on Friday amid steady snacking demand from Europe and expectations of limited kernel supply as processors continue to assess their remaining inventories. 

Driving the move: Recent kernel tenders by German supermarkets for a blend of Style 1 and Style 4 have been completed and removed supply from the market. The supply base has been further minimized by Kenyan growers diverting large volumes of nut inshell (NIS) to China following the relaxation of an export ban. A delayed harvest in South Africa and a busy shipment schedule for NIS into China have meant processors in the country are still determining how much inshell they can crack out into kernel over the summer. 

Meanwhile, smaller retailers in Europe have whittled down inventories and are inquiring for snacking products with high percentages of whole nuts. U.S. industrial buyers, who have largely been operating on a hand-to-mouth basis, are increasing their demand for processing grades. 

What they’re saying: “Kernel demand has been pretty good,” said a Netherlands-based trader on Thursday. “The main issue is that kernel supply into Europe will be significantly down.” 

“People in the industry have been saying please crack more, we have nice demand for kernel,” said a Guatemalan processor on Monday. “Maybe I will change my ratio between inshell and kernel and sell more kernels.” 

Tell me more: South African Style 1 traded at $12.85/kg CIF Europe during the May 17-24 assessment period. Stratamarkets assessed the item at the same level, up 36 cents on the week. The only other reported South Africa-origin trade during the period was for Style 2 at $11/kg, flat to last week’s assessment. 

Guatemala-origin Style 0 traded into Europe at $12.50/kg CIF, while Style 1L traded at $11.50/kg CIF. 

NIS market 

The South African nut inshell market was active, with prices edging lower following two weeks of firming. Five trades were reported for NIS 22+ with minimum 32% Sound Kernel Recovery (SKR) and less than 1.5% Unsound Kernel Recovery (USKR) from $2.95/kg-$3.15/kg CIF China. The item was assessed at $3.12/kg CIF China, up 2 cents. 

South African NIS 20-22 traded from $2.30-$2.35/kg CIF China. It was assessed 7 cents lower at $2.33/kg CIF China.

No Australia-origin NIS trades were reported during the assessment period. Australia-origin NIS 20-22 was bid at $2.50/kg CIF China and offered at $2.70/kg CIF China. The item was assessed at $2.60/kg CIF China, down 10 cents.

Chinese customs authorities blocked the import of several loads of Guatemala-origin NIS, sources said. The containers will be diverted to an alternative destination market.

Although no official explanation has been given, the move is most likely political, given Guatemala’s support for Taiwan. China has previously blocked imports of Guatemalan coffee, but this is the first time macadamias have been affected, sources said.