The Southern African Macadamia Growers’ Association (SAMAC) expects the industry’s current growth trend to continue for at least the next five to seven years.

South Africa had an estimated 19 000 ha of macadamias, with an additional 1 000 ha being planted every year, the association stated in the International Nut & Dried Fruit Council (INC) world consumption and production trends global statistical review for July.

The prediction stood in contrast to recent statements by Green Farms Nut Company, a SAMAC member, that the country’s macadamia nut industry faced an uphill struggle in that up to half the country’s harvest for 2015, destined for China, would now have to find other markets.

“No one has the hard figures for this. This is just a guess,” Golden Macadamia sales and marketing manager Nico van Schalkwyk told Engineering News Online this week.

He agreed that there was an element of truth but that the wrong message was being sent out as a result of Green Farms Nut Company’s statement.

“It is definitely not a crisis. We are still shipping to China without any problems. We shipped 70 containers and were paid for 69, and the one we weren’t paid for was sold to another customer and paid for. We have heard of defaults, but they are connected to quality,” Van Schalkwyk said, adding that the Chinese authorities were becoming stricter on quality, which was normal, as the price of macadamia nuts had reached record levels.

Green Farms Nut Company explained in its statement that the Chinese government had cracked down on corruption in the importation of agricultural products, causing South African farmers to once again confront that “opportunism in product marketing” carried immense risk.

Traders and middlemen had been found guilty of avoiding duties and China’s strict country of origin regulations by either disguising the true value of meat, fish, citrus and nuts they were importing or using ports of entry in countries such as Vietnam and Hong Kong, where duties were lower or did not apply.

The fact that the grey market had been closed was an ongoing occurrence and not at all new to the industry, countered Van Schalkwyk. “Once the central government loses interest, macadamia will once again move back to the grey market, which has happened several times in the past decade.”

He stressed that there was nothing wrong with the market in China, it was doing well and people were still eating macadamias.

“[However,] there is a lot of politics in our industry,” Van Schalkwyk advised.

The company said South African producers, processors and marketers had steadily increased their exports to China to 50%, adding that of the four largest local producers, one had been exporting more than 90% of its stock to China, another 70% and a third 50%.

Van Schalkwyk emphasised that record prices were being paid for macadamia nuts and that there was no oversupply, there was actually a shortage.

SAMAC advised that 40% to 50% of South Africa’s macadamia crop was sold as in-shell, particularly to China, with the remainder processed to kernel.

South Africa was currently leading the global production of macadamias, along with Australia, with an estimated crop of 46 950 t inshell (at 1.5% kernel moisture) for the 2015/16 season.

SAMAC highlighted that the crop forecasts, initially announced at the INC World Nut and Dried Fruit Congress in May, were preliminary.