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NIS prices firm as buyers increase bids amid low availability

June 21, 2024

South African-origin smaller-sized nut inshell (NIS) prices pushed up to crop year-to-date highs in the global macadamia market during the week ending on Friday as Chinese demand resurfaced amid a scarcity of offers. 

Driving the move: There is a severe lack of NIS 20-22 material still available for sale as most processors are well-committed. Additionally, South Africa’s crop is late by three to four weeks and expected to come in short of the 92,000 mt estimate presented at the International World Nut & Dried Fruit Congress in Vancouver last month. 

Moreover, some South African processors are short of intake product because farmers have increased their direct sales to China. 

Processors have favored cracking NIS 20-22 material rather than the larger NIS 22+ due to the wider margins they can make on selling kernels. 

What they’re saying: “It’s very difficult to find inshell offers on NIS,” said a Europe-based trader on Wednesday. “A lot of people are withdrawn from the market because they want to have more crop in before they make a call. I’m not sure there is any 20-22 available at the moment. A lot has been diverted to the kernel market.” 

“Chinese buyers keep on beating their drum and wanting to pay as little as possible, but they will find out that a lot of the NIS is being cracked and that the crop is late,” said a South Africa-based trader on Wednesday. 

Tell me more: The lack of availability of NIS 20-22 is incentivizing Chinese buyers to raise their buying interest in NIS 22+. Bids for the larger size were reported between $3.05-$3.10/kg CIF China during the June 14-21 assessment period.   

Trades for South African NIS 20-22 were reported at $2.60-$2.65/kg CIF China during the assessment period. The item was assessed at $2.64/kg CIF China, its highest level since Stratamarkets began tracking it in February. 

South African NIS 22+ traded between $3.05-$3.15/kg CIF China and was assessed at $3.13/kg CIF China, up 2 cents on the week. 

Upside momentum in the NIS market could be limited by the input costs of the larger China-based buyers who process nuts into value-added products, sources said. 

Kernel market 

South African kernel prices edged higher as buyers encountered a paucity of offers and a supply-demand imbalance. The only reported offers were for Style 0 and Style 1, which ranged from $14.50-$15.30/kg CIF Europe and $13.70-$15/kg CIF Europe respectively. 

“We are very cautious to offer additional product at this stage,” a South African processor wrote in an email on Thursday. “It seems that the original crop forecast was larger than the actual at the moment and there will mostly likely be a shortage, especially on the kernel side.”

Processors and traders said they were still receiving a notable volume of inquiries for kernel product in Europe. 

“A lot of kernel buyers were trying to get similar pricing to last year, and it just wasn’t realistic,” said a second South African processor on Friday. 

Australia-origin kernel prices increased significantly, with trades reported for premium-grade snacking items. Style 0 and Style 1 traded at $16.50/kg CIF Asia and $15.50/kg CIF Asia and were assessed $2.15/kg and $1.65/kg higher respectively on the week. 

Stratamarkets had previously been assessing Australia-origin kernel prices at 50-cent premiums to those of equivalent South African kernel items based on market feedback.